Palm Oil Internet Seminar

Section 1 : CPO Price Trend:
India's Palm Oil Import Trend for 2018/19 and 2019/20
By: Mr. Govindbhai G. Patel

a) He is Managing Partner of GG Patel & Nikhil Research Company. A first of its kind research company in India which is working on primary research about agricultural industry and its dynamics. The company has undertaken several projects & provides detailed statistics and information with its core competence in oils & oilseeds market.

b) He is Managing Partner of GGN International, an intermediary which helps Indian importers procure imported oils like CPO, Palmolein, Soybean Oil, Sunflower oil, Rapeseed oil etc.

c) He has spent more than 50 years in the oilseeds Industry, with experience on all aspects of the veg oil Industry. He has experience of running crush plant, solvent plant, and refinery to Vanaspati Industry. He has actively participated in Import of Vegoils & export of oil meals and oilseeds to Europe & South east Asia.

d) Ex - President of The Solvent Extractors’ Association of India, Mumbai (SEA) which is a Premier Association of Oils, Oilseeds and De-oiled Meals industry in India having more than 850 membership.

e) Ex - President of The Central Organization for Oil Industry & Trade, New Delhi (COOIT) – COOIT is an apex body for all the Associations situated in India relating to Edible Oils, Oilseeds and Deoiled Meals.

f) Ex - Vice-Chairman of the Vanaspati Manufacturers’ Association of India, New Delhi.

g) Have presented various Papers at International and National Forums.

h) Leader of various delegations sent broad sponsored by Central Government and various Associations for promotion of Oilseeds, Oils and Deoiled Meals export/import and trade in general from India.

i) Presently Executive Committee Member of SEA and COOIT and also Convener of Crop Estimate Committee of COOIT and SEA.

1. India is the 2nd largest most populous Nation, Largest democracy country
with maximum young people, One of the fastest growing economy,

2. India is the largest importer of edible oils in the world. India imported 4.43 ml T of edible oils during 2001-02 and it had increased to 14.51 ml T during 2017-18. Over and above this, India imported 0.51 ml T Non-Edible Oils during 2017-18. The growth of import of edible grade Palm Oil during this period was 195% while growth in import of Soft Oils was 210%.

3. Import of Non-edible Palm Oil was 263k during 2001-02 which increased
to 510k during 2017-18.

4. Consumption of Palm Oil during 2001-02 was 29.08% of all the edible oils consumed in India and it increased to 39.2% during 2017-18.

5. Demand Drivers of edible oils in India are:
a. Consistent GDP growth.
b. A big expansion in the Indian Middle class of people.
c. Double digit growth of Out of Home consumption of edible oils.
d. Per Capita consumption of edible oils in 2001-02 was 9.4 kg and it increased to 16.5 kg in 2017-18. Still Per Capita consumption is below the threshold level of consumption. Low consuming States of Central and East India will catch up with their peers of West and North India.
e. Even with a Moderate Population growth, absolute increase in number of people is quite high.
f. Schemes like NREGA and rising the income level of people who are consuming much below all India level.
g. Rising urban population and many more.

6. Different Zones have different preference of edible oils:
a. Mustard Oil is Kachchi Ghani Oil with a strong pungent smell. The biggest markets for this oil are East India followed by North India.
b. Cottonseed Oil have a largest consumption in Gujarat and Surrounding States.
c. Sunflower Oil is preferred by affluent class of people of South and West India.
d. Refined Soybean Oil is preferred by consumers in Madhya Pradesh, Maharashtra and North India.
e. Palm Oil is highest selling oil in the country. This is gaining big popularity in the Out of Home Consumption (HORECA) segment. This is the preferred oil in South India and Coastal East India. It is gaining popularity in West and North India also.
f. Groundnut oil, once upon a time, the most preferred oil but now slowly dying out due to high price and low availability. The demand of Groundnut Kernel is phenomenally growing. Hence creating a scanty of availability of Seed for crushing.

7. There is seasonal pattern of Palm Oil consumption. During Summer period, consumption is the highest i.e. from March to June. At higher temperature, during these months Palm Oil does not become hazy. During Monsoon, demand is reasonably high i.e. during July to October. During Winter, consumption is low i.e. during Nov to Feb. As the temperature are low, Palm Oil becomes hazy while the people prefer Oil in liquid form.

8. Production of Domestic Oils increased from 5.64 ml T in 2001-02 to 7.76 ml T during 2017-18 while the consumption increased from 10.12 ml T in 2001-02 to 22.25 ml T in 2017-18. The domestic production is not catching up with the consumption and hence there is every year increase in import of edible oils. Dependency on import during 2001-02 was 44% which has increased to 65% in 2017-18.

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Questions & Answers (4) :
Edmund Yong
5 years ago
If higher production on Castor Oil will it affect Palm Oils import to India? Can you provide Castor Oil figures in India: a) Production; b) Export, c)stock levels. i) Which are the Castor Oil major export Country from India. ii) When is the planting session for Castor? iii) Session for harvesting? iv) Current prices of Castor Oil? v) Usage of Castor Oil? vi) Usage for Hydrogenated castor oil? And major export country?
Govindbhai Patel:
Castor oil is not my subject. I will not be able to answer your question regarding Castor complex. However, I would like to state that Castor oil do not affect the Palm oil import in India as Castor oil is Non-edible oil.
5 years ago
5 years ago
Dear Mr Patel, My questions: 1. Possible to provide information on the use of palm oil by users in India? and which segment will have the biggest growth potential? 2. On Biodiesel in India, is there room for Malaysia biodiesel to penetrate into India and what are the key factor to consider? Thank you.
Govindbhai Patel:
(1) It is not possible to provide information on segment wise use of palm oil. (2) There is no room for Malaysian Biodiesel to penetrate in to Indian market as usage of Biodiesel in India is negligible.
5 years ago
Nur Sophia
5 years ago
1) On port of discharge, your figures shows that the port of discharge for palm oil is mostly in West and North India. Why not Eastern India which is nearer to Malaysia and Indonesia. 2) Palm oil is commonly view as poor man’s oil in the country. Does it mean that palm based cooking oil is dominated by small brands with stronger brands having insignificant share in the market. TQ
Govindbhai Patel:
(1) 48% of the quantity of palm oil is discharged in western port & 52% of the quantity discharge at east cost, so there is more quantity of palm oil in east cost which is near to Malaysia & Indonesia & where consumption of palm oil is more in comparison with west cost. (2) Most of the quantity of palm oil is sold in bulk. It is also fact that the sales of palm oil dominated by small brand as there is no national brand for All India. Most of the brands cater needs of the local area.
5 years ago
Nur Fairuz
5 years ago
My question : 1) what do India do with the large volume of stearin produced? I understand that India cannot use stearin for food manufacturing and India do not have a big oleochemical industry. 2) How is India’s local stearin price compared to international price. If I will to source stearin from India to sell I get very competitive price and make profit. 3) India’s import of lauric oil (CPKO) is rather low. Can you explain the market situation. Is it because your household toiletries manufacturing sector e.g. detergent, liquid soap etc. etc. is small or is it because it is skewed to petrol chemical products or other reasons
Govindbhai Patel:
(1) Stearin produced in India is used by the Soap Manufacturers, Bio-Diesel manufacturers, Food industry & Oleo chemical industry. Lot of stearin is used for manufacture of Vanaspati (Hydrogenated Oils). (2) Stearin price in India are much higher than international prices as India imports lot of stearin from Malaysia & Indonesia. India imports about 180k stearin per year. (3) As you said India’s import of CPKO is negligible. (4) Lot of quantity of stearin is used for the manufacturing of toilet soap, I don’t have the quantity of stearin used by Soap manufacturers.
5 years ago
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