POINTERS: Dynamics of Vegoils in India

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Questions & Answers (9) :

sundeepvyas

7 years ago

Any latest updates on site ? All are way back a year

Kothari Y

8 years ago

Dear Miss Bhavna, In response to Ms Rachel Tan's query, you have said "Stearin was the obvious choice and has replaced hydrogenated fats to a large extent in the formulation of Vanaspati." Sine I have bn away fm the industry for quite some time, I would like to pose Three simple, ( but imp to me ), questions: 1. Is Palm stearin Food Grade ?? 2. Any figures as to how much Pam Stearin , if at all , is used in Vanaspati manufacture in India ? 3. Is Palm Stearin at all used in Europe in Chocolates, Hydogenated fats or other Confectionary foods ? Many thanks. Yogen Kothari

Bhavna Shah:
Dear Kothari Y, 1. Yes, Palm Stearine is food grade. You recall it was approved some time ago for use in vanaspati. 2. Palm Stearine usage in Vanaspati is permitted and there is no ambiguity. In view of the regulations re. TFA, more and more quantum of Palm oil and Stearine is being used in Vanaspati formulations. As there is a large production of Vanaspati in both the organized and unorganized sectors, no official data is available for total production and the components of Vanaspati. It is estimated that the unorganized sector uses a greater percentage of stearine. Industry estimates that total production could be about 1.5 MMT and a significant part of the input is stearine. 3. Re.Europe : My presentation is specifically on India as I cover India region for MPOC. So, I would not venture to comment in detail on European conditions. However, I am given to understand that there are no regulatory restrictions on usage of Stearine in Europe and that it is widely used.
8 years ago

Mohammad Jaaffar Ahmad

8 years ago

Dear Ms.Bhavna, It was reported in the news this week that India plans to spend US$1.5 billion in the next 3 years to help farmers grow oil palm. PM Modi is pushing to make India self-sufficient in edible oils requirements. We have heard few false starts in the past. Do you think it will works this time? What would be the obstacles that India have to overcome to realize this objective? Should there be any worries for palm oil exporters to India in the medium and long terms? TQ

Bhavna Shah:
Dear Mr.Jaffar, Yes, the GOI has made several efforts in the past but I would not call them false starts. Rather, all efforts have faced certain challenges. The current announcement seems to be based on experiences gained from the past errors and the alarming rise in the import component of vegoils S-D scenario in the current year. This government seems to be more determined to find a longer term solution with support of the industry. In my paper I have referred to some of the obstacles that have to be overcome, such as land issues. I won’t call it worries but the PO suppliers to India have to factor in these new efforts in the long term equation. Based on experiences in Malaysia, we know that development of oil palm plantations takes time and peak commercial production has a long gestation period. So, for these plans to materialize will take longer than what seems to be envisaged in this announcement. It is a gradual process. I personally do not think these plans will have a significant impact in the short to medium term. But, in the long term, definitely. The extent of the effect will depend upon how fast the GOI can push through with the scheme and necessary reforms.
8 years ago

Surya

8 years ago

Thanks for the over view of the oils and fats scenario in India. Its a pity that the agri revolution by- passed the oilseeds sector completely. If the same effort had been put in for oilseeds as was done for wheat, the picture could have been quite different today. We could have been exporting oils just as we export wheat!

Bhavna Shah:
You maybe absolutely correct but one can only conjecture at the moment. If the same attention had been given to oilseeds production, India would at least not have been so heavily reliant on imports,even if they may not have been in a position to export vegoils. Anyways, better late than never. The recent announcement re.oil palm development may act as a a catalyst for the growth of this sector.
8 years ago

Malay Desai

8 years ago

Your sensitivity analysis chart is really alarming and opens one's eyes to the magnitude of the problem. Going by the past record, it does not seem that India can meet such a demand. Oil palm seems the only solution in the long term. Will Malaysia assist by providing technical assistance for its development?

Bhavna Shah:
Dear Mr.Desai, Unfortunately, that is the reality. India’s requirement of vegoils will go up as population and the economy grow. If domestic production cannot keep pace, then India will need all the help it can receive. Malaysia has made big strides in development of both planting materials and plantation management practices. Malaysia views India as an important trading partner. Both countries have also shares cultures. I am confident that Malaysia will offer whatever assistance is required but local conditions such as land regulations have to be rationalized first. Malaysians have set up several plantation JVs which have contributed to Indonesia’s progress in this field. The best way to move forward would be for India to seek similar JVs with Malaysia. Infact, when oil palm development program was launched in India in the 1990s, it was a Malaysian company that actually came forward to take up the challenge in India. Malaysia has in the past and will continue in the future too to offer all assistance as may be required.
8 years ago

Siva

8 years ago

What is the prospect of specialty fats for chocolate in India? I wonder if Indian consumers growing preference towards low sugar intake will affect the specialty fats business in India?

Bhavna Shah:
Dear Mr Siva The answer to your question lies more in the prospects of demand for chocolates, rather than in actual usage of speciality fats in the manufacture of Chocolates in India. Needless to say, so long as demand for chocolates increases, the usage of speciality fats in its manufacture will also increase. The variety of chocolates and chocolate based snack-foods, in all price ranges, is increasing as the purchasing power increases and marginal consumers climb up the economic ladder. The crux of your question is, will the demand for chocolates increase in view of the preference of the Indian consumer for low sugar intake. This, I presume, is an international phenomenon and is not typical to the Indian consumer alone. I am not aware of any studies having been made in this regard. However, the increase in consumption due to the sheer size of the Indian population, in my opinion, should far outweigh the decrease in demand due to low sugar intake preference. Prospects for speciality fats should be good.
8 years ago

Mal

8 years ago

I have problems in exporting palm olein to importers in India who sell to resort and 5 star hotel. Any proposal from you on how best to handle this issue?

Bhavna Shah:
Dear Mr Gupta Thanks for your query. The information provided by you is insufficient to provide an adequate response. Could you please inform what are the issues faced by you and why you were not able to sell to them. Are you supplying in bulk or in packs. Did the resorts/5-star hotels say why they were not able to buy from you? Could it have been an issue of origin of the oil. Are they specifically saying no to buying only imported refined olein or they do not buy any imported refined oils at all. In the absence of above information, the only reason I can think of is quality. Hotels , specially the 5-stars, would generally be looking for freshly refined oils which can be available only from local refiners. Further, if they have any quality issues, the local refiners would be better placed to address the issues. If they had quality issues with imported refined olein, it would be difficult for them to get redressal.
8 years ago

B Patel

8 years ago

There are non edible INDUSTRIAL grades/ mixes of palm based veg oils. What are their major uses in Malaysia? What are the advantages and disadvantages of imports into india of these industrial non edible grades?

Bhavna Shah:
Dear Mr Patel, Thanks for your question. Amongst palm oil products, the only grade that can be strictly called non-edible grade, is Palm Fatty Acid Distillate (PFAD). All other grades/mixes are basically edible in nature but can be used for industrial purposes as well. PFAD is mainly used in manufacture of soaps, animal feeds, oleo-chemicals etc… Mixes for industrial uses are generally tailor-made as per the needs a specific industry. A prospective user will need to discuss it with his prospective supplier.
8 years ago

R.C. Tan

8 years ago

India imports a large amount of CPO. It is understandable that most of the palm olein is used locally. However, what does India do with the large amount of palm stearin that it produced, because what I gather is that India does not export much of the palm stearin.

Bhavna Shah:
ear Ms Rachel Tan Thanks very much for taking the time to go through my presentation. Your question is very perceptive and logical. India is a major market for liquid cooking oils. However, there is an import duty differential between CPO and RBD Olein. The base duties are 7.5% on CPO and 15% on RBD Olein; hence, a greater import of CPO. The imported CPO is generally refined and fractionated. RBD Olein is sold as cooking oil after packing. Besides liquid cooking oils, there is also a large market for solid fats in the form of Vanaspati, which is a substitute for the much more expensive Ghee made from milk. The main component for Vanaspati is hardened fat. Previously, soft oils were hydrogenated and used in the manufacture of Vanaspati. However, resulting from various medical researches and consumer awareness programs undertaken by MPOC, there was a rising awareness about the adverse health effects of using hydrogenated fats. As you must be aware, hydrogenation results in creation of TFA in the oils. Most health authorities around the world, including in India, have imposed severe restrictions on TFA content of packaged oils, fats and packaged food. This resulted in looking for alternative fats which did not need to be hydrogenated. Stearin was the obvious choice and has replaced hydrogenated fats to a large extent in the formulation of Vanaspati. With the growth of the Oleo-chemicals industry in India, Stearin is being used increasingly in this sector as well. Hope this clarifies your query.
8 years ago