Edible Oil Market Synopsis

Edible Oil Market Size Was Valued at USD 25473.02 Million in 2023, and is Projected to Reach USD 39213.21 Million by 2032, Growing at a CAGR of 4.91% From 2024-2032.

In India, current edible oil consumption is about 23.5-24.0 MnT, growing @ 2% to 3% per annum. By 2029-30, India may need 28-29 MnT while local production is expected to be 15-16 MnT. India imported around 4.37 Million MT of edible oils during Oil Year 2002-03 (Nov.-Oct.), which increased to 8.86 Million MT in Oil year 2013-14 and to 16.52 Million MT in Oil Year 2022-23.

• The domestic consumption/demand for edible oilseeds is increasing at around 10 LMT per annum due to growth in population and rising household incomes. The increase in domestic production of edible oilseeds and consequently edible oils is significantly lower than the steadily rising consumption of edible oils in the country, leading to the rise in imports over last 20 years. The domestic production presently is able to meet 45% of the demand within the country.
• India is fortunate in having a wide range of oilseeds crops grown in its different agro climatic zones. Groundnut, mustard/rapeseed, sesame, safflower, linseed, niger seed, castor are the major traditionally cultivated oilseeds. Soybean and sunflower have also assumed importance in recent years. Coconut is most important amongst the plantation crops. Efforts are being made to grow oil palm in Andhra Pradesh, Karnataka, Tamil Nadu and North-Eastern parts of the country in addition to Kerala and Andaman & Nicobar Islands. Among the non- conventional oils, rice bran oil and cottonseed oil are the most important. In addition, oilseeds of tree and forest origin, which grow mostly in tribal inhabited areas, are also a significant source of oils.
• India is a vast country and inhabitants of several of its regions have developed specific preference for certain oils largely depending upon the oils available in the region. For example, people in the South and West prefer groundnut oil while those in the East and North use mustard / rapeseed oil. Likewise, several pockets in the South prefer coconut and sesame oil. Inhabitants of northern plain are basically consumers of fats and therefore prefer Vanaspati, a term used to denote a partially hydrogenated edible oil mixture of oils like Soybean, Sunflower, Rice bran and Cottonseed oils. Many new oils from oilseeds of tree and forest origin have found their way to the edible pool largely through the Vanaspati route.
• Of late, things have changed. Through modern technological means such as physical refining, bleaching and de-odorization, all oils have been rendered practically colorless, odourless and tasteless and therefore, have become easily interchangeable in the kitchen. Oils such as soybean oil, cottonseed oil, sunflower oil, rice bran oil, palm oil and its liquid fraction- Palmolein which were earlier not known have now entered the kitchen. About 57% of domestic demand of edible oils is met through imports out of which Palm oil constitutes about 59%. The consumption of refined palmolein (RBD palmolein) as well as its blending with other oils has increased substantially over the years and is used extensively in hotels, restaurants and in preparation of wide varieties of food products.

Top Key Players Involved Are:

"Adani Wilmar Limited,Agro Tech Foods Ltd. (ConAgra Brands Inc.),BCL Industries Ltd.,Bunge India Private Limited,Cargill India Private Limited,Emami Agrotech Limited,Gulab Oil And Foods Pvt. Ltd.,Mahesh Edible Oil Industries (Saloni Mustard oil),Marico Limited,Patanjali Ayurved Limited ,Dhara Oil,Puri Oil Mills Limited,Gulab Oil And Foods Pvt. Ltd.,Dalda Oil,Sanwaria Consumer Limited,Hathi Brand,N.K Proteins Pvt Ltd,Jvl Agro Industries Limited,Gujarat Ambuja Exports Limited,KN Agri Resources,Kriti Nutrients Ltd,M K Proteins Ltd,Blueline Foods India Pvt Ltd,Anand Milk Union Limited and Other Active Players"

Edible Oil Market Trends Analysis

Shift Towards Fortified Cooking Oil

• Increasing awareness of health in India has led to a growing trend of fortifying cooking oil with vitamins and nutrients. Consumers now recognize the significance of a well-rounded diet and vital nutrients. Including vitamins such as A, D, E, K, and omega-3 fatty acids aids in fighting deficiencies. The Indian government encourages adding essential nutrients to cooking oils in order to improve public health. Initiatives such as FSSAI create regulations and criteria, encouraging the industry to adhere for improved nutritional quality.
• There is a growing demand from consumers for healthier food choices, resulting in a rise in fortified oils with extra health benefits. Major cooking oil companies are meeting this demand by launching fortified versions of their products.
• Advances in food technology have made it possible to fortify cooking oils economically without compromising taste and quality. By offering vital nutrients in a commonly eaten staple, this aids in combatting India's nutritional issues related to malnutrition and micronutrient deficiencies.
• Consumer education and awareness efforts have contributed to the promotion of fortified oils in the market. Increasing consumer awareness about the advantages of a well-rounded diet has resulted in higher levels of acceptance. Adding nutrients to cooking oils is becoming increasingly popular in India due to a combination of health worries, regulations, technological advancements, and the desire for healthier choices. As the emphasis on nutrition and wellness increases, this pattern is anticipated to persist.

Growth of Food processing Industry

• The expansion of the food processing industry in India is creating opportunities for the edible oil sector, as there is a growing demand for it as a key ingredient in processed foods such as snacks, ready-to-eat meals, baked goods, and confectionery. This demand is driven by the industry's growth to meet the increasing need for convenience foods and packaged goods.
• Different edible oils are utilized for various tasks in food preparation, such as frying, baking, sautéing, and as base oils for sauces and dressings. Food processors require oils that have stability, good frying attributes, and neutral taste profiles in order to maintain product quality. Manufacturers of edible oil have the ability to meet these requirements by providing personalized oils.
• Food processors are choosing to use healthier oils, such as those with low saturated fats or high unsaturated fats, as well as added vitamins and antioxidants, because of the growing awareness among consumers about health. Edible oil producers can benefit from collaborating with food processors to sell in large quantities, guaranteeing a consistent supply and customized oil products designed to meet individual requirements.
• The food processing industry in India can be a profitable market for edible oil producers, serving both local and global customers with unique oils. Government aid in the form of subsidies and incentives boosts industry expansion, and regulations promoting food fortification foster chances for innovation. Advances in technology in extraction, refining, and packaging enhance the quality, shelf life, and nutritional value of edible oils, making them appealing to food processors looking to improve their products.
• The shift in consumer tastes towards easy-to-eat meals has increased the need for healthy and practical processed food options. Edible oils play a vital role in preserving the nutritional value and flavor of these items. The expansion of the food processing sector in India opens up possibilities for edible oil producers to explore new ideas, work together, and expand into different markets, leading to increased growth and competitiveness in the industry.

Edible Oil Market Segment Analysis:

Edible Oil Market is segmented on the basis of Type, Packaging, Extraction Method, Degree of Refinement, Packaging Material, End-Use and Distribution Channel.

By Type, Palm Oil Segment Is Expected to Dominate the Market During the Forecast Period

• The total domestic edible oil consumption was about 22.5 million metric ton for oil year (Nov-Oct) 2021. The consumption grew at a CAGR of ~3% over 2013- 2021.Key edible oils - palm, soyabean, rapeseed and sunflower - constitute 80% of the total consumption in India in terms of volumes. Share of palm oil in total consumption declined in 2021 due to the pandemic and the subsequent demand slowdown in the HoReCa (hotels, restaurants and catering) segment. The lower demand in the HoReCa segment was partially substituted by a household segment which preferred soybean, sunflower and other edible oils. Going forward, the overall consumption is expected to grow at a CAGR of ~3-3.5% due to rising urbanisation and preference for processed food.
• About ~60% of total edible oil consumption is imported; palm oil constitutes ~40% of consumption which is nearly fully imported from Indonesia/Malaysia. Sunflower oil constitutes about 8% of total consumption which is primarily imported from Ukraine (70%) and Russia (20%). India imported around 2.5 and 2.2 million MT of sunflower oil in FY2020 and FY2021. With the ongoing war between Russia and Ukraine, the import of sunflower oil to India has taken a hit. While industry players are sourcing alternative oil such as soybean, palm and rapeseed to maintain adequate supply, prices have surged sharply across the board
• India is the largest importer of palm oil and accounts for about 18-20% of the India palm oil imports, as per industry sources. The total domestic palm oil consumption remains around ~8-9 million metric tonnes (MMT) with most of the demand being met through imports. The import restrictions on RPO (refined palm oil) from January 2020 coupled with Covid-19 in India and the consequent demand slowdown in the HoReCa segment reduced palm oil demand in FY2020 and FY2021.
• Because of its low price, palm oil is popular for household cooking among India's poorer citizens. As of 2019, about 10.2% of India's population lived in extreme poverty on less than US$1.90 per person each day. At 30 to 100 Indian rupees (US$0.40-$1.30), branded palm oil in India is cheaper per litre than other edible oils. India is the world's second-largest consumer of palm oil, with consumption having soared during the 2000s to reach around 9 million tonnes each year. Palm oil now accounts for about 40% of India's edible oil consumption. The nation is almost entirely dependent on imports to meet this demand, becoming the world's largest importer. Incomings greve from below 500,000 tonnes in 1994 to a peak of 10 million
• Palm oil was not much used in Indian cooking until its import was liberalised near the turn of the century. "As India opened up in the 1990s, it was attractive to import cheap palm oil to meet our needs, especially as a lack of investment in the local oilseed sector had led to its decline," explains Bhavani Shankar, a professorial research fellow in food and health at the University of Sheffield. "The major exporters, Indonesia and Malaysia, were also strongly promoting their palm oil to new markets like India."

By End-Use, Household Segment Held the Largest Share In 2023

• India's large and increasing population boosts demand for cooking oil, making the household sector the main player in the edible oil market. Households in urban areas choose packaged and branded oils due to convenience and having more money to spend. Every home, no matter how big or small, needs a constant amount of cooking oil for everyday cooking, which is why this industry is crucial in the market. Household consumption plays a major role in India's edible oil market due to the country's population, culinary traditions, urban growth, increasing incomes, focus on health, easy retail availability, government support, and essential nature of cooking oil.
• Indian cooking is famous for its utilization of a variety of edible oils in preparing dishes such as curries and desserts. During festivals, families use a greater amount of oil for preparing customary dishes. Increasing salaries result in greater oil usage, as it becomes more accessible and essential in homes due to financial reasons.
• Increased knowledge about health and nutrition has led to a preference for healthier oils such as olive oil, rice bran oil, and sunflower oil. Families are ready to increase their expenses on oils seen as more beneficial for their health because of dietary concerns. Edible oils can be easily found in different retail outlets like supermarkets, hypermarkets, convenience stores, and online platforms. Oil companies use effective marketing and branding strategies to reach household consumers, highlighting quality, health advantages, and cooking flexibility.
• Government assistance for oilseed farmers is advantageous for consumers as it ensures a steady oil supply and reasonable prices. Food security initiatives provide edible oils to guarantee lower-income households have access. Packaged oils provide convenience and a range of options for various cooking tastes. In Indian homes, which are frequently spacious, larger quantities of oil are used in cooking meals. Even with economic changes, the need for edible oils stays consistent as an essential part of daily life. Households frequently hoard oils when there are discounts or an increase in prices, to keep their consumption levels steady

Edible Oil Market Regional Insights:

West and Central India is Expected to Dominate the Market Over the Forecast Period

• The largest oilseed-producing states in India include Andhra Pradesh, Gujarat, Haryana, Karnataka, Madhya Pradesh, Maharashtra, Rajasthan, Tamil Nadu, Uttar Pradesh, West Bengal. Out of these states, Rajasthan, Gujarat, Madhya Pradesh and Maharashtra are the top producers with a share of about 20%, 20%, 19% and 16% of the total production, respectively.
• The Indian edible oil market is mainly controlled by West and Central India because of their ideal climates and soil for growing oilseeds, expansive cultivation areas in states such as Gujarat, Madhya Pradesh, and Maharashtra, and a significant number of processing facilities and refineries. The close distance to key ports such as Kandla, Mundra, and Nhava Sheva enables effective import and distribution of raw edible oil. These areas also gain from a solid manufacturing foundation, substantial investment in technology and creativity, cost effectiveness, and a proficient transportation and distribution system.
• The government encourages oilseed production and processing in these areas through subsidies, incentives, and support for research and development. Furthermore, the consumption of packaged and refined edible oils is propelled by high local demand, urbanization, and changing lifestyles. In general, the West and Central regions of India's domination in the edible oil market can be attributed to their natural benefits, industrial capabilities, economic efficiencies, and supportive government regulations, all of which play a crucial role in India's edible oil distribution network.
• Madhya Pradesh is top in soybean production, whereas Maharashtra specializes in groundnut and sunflower cultivation. There are numerous oil mills, refineries, and extraction plants in the states to efficiently process oilseeds. Modern technology has enhanced the process of extraction and refining, leading to higher production levels and improved quality. Production costs are decreased by economies of scale and efficient supply chains, while being close to ports helps in importing crude oil and exporting refined products. Costs of production are lowered by economies of scale and efficiency in the supply chain, while being close to large ports makes it easier to import crude oil and export refined products. Government funding supports the growth and processing of oilseeds, while research efforts enhance crop diversity and output. The strong market in West and Central India for edible oil is sustained by urbanization and increasing incomes. Investments from the private sector in farming, processing, branding, and marketing play a role in the growth of the industry. Industrial clusters boost efficiency and creativity in the edible oil industry.

Edible Oil Market Active Players

• Adani Wilmar Limited
• Agro Tech Foods Ltd. (ConAgra Brands Inc.)
• BCL Industries Ltd.
• Bunge India Private Limited
• Cargill India Private Limited
• Emami Agrotech Limited
• Gulab Oil And Foods Pvt. Ltd.
• Mahesh Edible Oil Industries (Saloni Mustard oil)
• Marico Limited
• Patanjali Ayurved Limited
• Dhara Oil
• Puri Oil Mills Limited
• Gulab Oil And Foods Pvt. Ltd.
• Dalda Oil
• Sanwaria Consumer Limited
• Hathi Brand
• K Proteins Pvt Ltd
• Jvl Agro Industries Limited
• Gujarat Ambuja Exports Limited
• KN Agri Resources
• Kriti Nutrients Ltd
• M K Proteins Ltd
• Blueline Foods India Pvt Ltd
• Anand Milk Union Limited and Other Active Players

Key Industry Developments in the Edible Oil Market:

• In Apr 2024, Adani Wilmar sees double-digit growth in edible oil sales on festive demand.India's Adani Wilmar forecast double-digit percentage growth in fourth-quarter edible oil sales on Friday, driven by strong demand during the festive season in the world's biggest importer.The consumer goods maker said it bagged strong growth in both its edible oils and foods businesses, aided by strong demand during the festival of Holi and ongoing wedding season.

• In Mar 2024, Govt launches mission to boost oilseeds' production, cut imports of cooking oils. The government is working with the resolve to make the country a developed nation by 2047, in which the role of agriculture is very important. It highlighted that a mission of Rs 11,000 crore is being run to reduce the burden of edible oil imports and become self-reliant in oilseeds.
• In Feb 2023, Cargill launches edible oil brand in South India supported by the plant in Nellore. The company announced the launch of its first product in four South Indian States — Gemini Pureit, a sunflower oil. Cargill India, a subsidiary of global food corporation Cargill, has entered the South Indian market by acquiring and making an investment of $35 million at an existing facility in Nellore of Andhra Pradesh.
• In Mar 2023, Amul to Launch New Fixed-Price Edible Oil Pack Amidst Rising Inflation. GCMMF launches fixed-price retail pack of refined cottonseed oil for Rs 100 under the brand 'Janmay', making edible oil prices more realistic for consumers. This initiative aims to eliminate confusion caused by fluctuating prices and differences between trade prices and MRP, ensuring consumers get fair pricing and quantity. However, some experts believe this approach may confuse consumers, requiring heavy advertising budgets for successful implementation.