India is a leading player in edible oils, being the world’s largest importer (ahead of the EU and China) and the world’s third-largest consumer (after China and the EU).A growing population, increasing rate of consumption and increasing per capita income are accelerating the demand for edible oil in India.

India is one of the largest producers of oilseeds in the world and this sector occupies an important position in the agricultural economy. Oilseeds and edible oils are two of the most sensitive essential commodities.  India grows oilseeds on an area of over 26 million hectares, with productivity of around 1000 kg a hectare. But self –reliance in edible oils is not in sight and the country imports almost half of its edible oil requirements.

India has a wide range of oilseeds crops grown in its different agro climatic zones. Groundnut, mustard/rapeseed, sesame, safflower, linseed, castor are the major traditionally cultivated oilseeds.  Soyabean and sunflower have also assumed importance in recent years. Coconut is most important amongst the plantation crops. Among the non-conventional oils, rice bran oil and cottonseed oil are the most important. The Indian edible oil industry is composed of some 15,000 oil mills, 600 solvent extraction units, 250 vanaspati units and about 400 refining units.

The National council of Applied Economic Research has projected the demand for edible oils under three scenarios on the basis of per capita income growing annually by 4%, 5% and 6%.Under the low growth scenario, the demand was to rise to 22.8 million tones, under medium growth scenario to 25.9 million tones and under high growth scenario to 29.4 million tones in the near future. The edible oil industry is largely dominated by the bulk segment. Unbranded segment accounts for anywhere between 80 and 90% of the total consumption. Imports are taking place in two forms-refined and crude oil. A large part of the crude oil gets sold as unbranded oil. The share of raw oil, refined oil and vanaspati in the total edible oil market is estimated at 35%, 55% and 10% respectively.

Coming to the non edible oil sector, there has been a great potential for production of bio-fuels like bio-ethanol and biodiesel. The country has been hit hard by the increased cost and uncertainty and so is exploring other energy sources occurring, bio-diesel, extracted from trees is one such alternative under consideration. Bio-diesel would be cheap to produce as it can be extracted from certain species of tree that are common in many parts of India. Due to the concern on the availability of recoverable fossil fuel reserves and the environmental problems caused by the use those fossil fuels, considerable attention has been given to biodiesel production as an alternative to petrodiesel. The focus is on biodiesel production which is produced from vegetable oils, animal fats or non-edible oils. Talking of non edible oils, the castor oil presently bears a great importance in this sector. Castor oil is one of the most useful plant oils. Castor Oil, in various grades, is used in pharmaceuticals, food and other industries. In addition, castor oil and its derivatives & castor-based oleochemicals are the source of a number of useful oleochemicals.

India’s edible oil imports increased to 6.12 lakh tonnes in the fiscal ended March 2010 while the non-edible oil imports fell to 20,575 tonnes, according to the Solvent Extractors Association.
The fall in the imports of non-edible oil was due to the higher imports due to the larger stocks at ports for lift and in pipelines. The country had imported 6.41 lakh tonnes of vegetable oils comprising edible and non-edible oil in March 2009. However, the overall import of vegetable oils rose 4.3% to 37.47 lakh tonnes during November 2009 to March 2010 compared with 35.92 lakh tonnes in the corresponding period of the previous year. Non-edible oil imports rose by 2.5% to 1.62 lakh tonnes during November 2009 to March 2010 compared with 1.58 lakh tonnes in the year-ago period, while edible oils imports increased to 35.85 lakh tonnes from 34.34 lakh tonnes.

Going by the market Statistics, the edible and non edible oil sector is all set for a boom in the market.The edible and non edible oil Industry needs to be strengthened by raising productivity, ensuring a reasonable price to the farmers and levying import duties at a reasonable level. Controls and regulations by government have left the oil industry in a highly competitive market dominated by both domestic and multinational players. It is the right time for an entrepreneur to venture into this sector which is highly profitable.

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