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Sector Trend Analysis – Vegetable oils in India

January 2020

Executive summary

India was the second largest vegetable oil market globally in 2018, with US$9.7 billion worth of retail value sales.

Between the years 2014 and 2018, India imported 96.3% of their vegetable oil supplies representing a compound annual growth rate (CAGR) of 8.5% in retail sales for this period.

Vegetable oil had the largest retail value during both the historic and forecasted period; however, olive oil obtained the highest CAGR's of 16.7% and 7.7%, respectively for each period.

India only imported US$55,974 of Canada's vegetable oil products in 2018. Canola products accounted for 99.9% of vegetable oil imports by India from Canada at a value of US$52,735 in 2018.

According to GlobalData Intelligence, India, in comparison to other Asia-Pacific countries (China, South Korea, Philippines and Japan) has the highest fragmentation of both brand and private labels in relation to the oils and fats sectors for brand values as of 2017.

In 2017, the five largest vegetable oil products trademark (owner) brands in India controlled 69.2% of the market. Wilmar International Ltd. maintained its prominent position with retail value sales of US$1.9 billion in 2017 and with a CAGR of 9.1% from 2014 to 2017. Cargill Inc. recorded the largest growth rate of 10.4% within the same period.

Vegetable oils in India

The edible oil industry is one of the most important industries of the agriculture sector in India. India is one of the largest oilseed producers in the world and oilseeds are among the major crops grown in the country apart from cereals, in terms of acreage, production and economic value generated. Among the nine oilseed crops grown in the country, seven can be used to produce edible oils including, groundnut, rapeseed, mustard seed, soybean, sunflower, sesame, safflower and niger, and two produce non-edible oils, such as castor and linseed.Footnote 1

Each region is known for their cultivation and production of differing types of vegetable oil seeds according to their climatic zones. The northern and eastern regions are known for their cultivation of mustard seeds, while the south cultivates both sesame and coconut and the southern and western regions cultivate groundnut. Desi ghee, made from milk, is another form of edible oil utilized primarily in sweets and food for special occasions.Footnote 2

The production process of vegetable oils involves the removal of oil from plant components, typically extraction from seeds. This can be done via mechanical extraction using an oil mill; generally termed 'crushing' or 'pressing', (India's traditional method of extraction was the 'Ghani' method or the use of two bulls to power a wooden machine, which is similar to a mortar and pestle) or via chemical extraction using a solvent extract. The most common solvent extract used within commercial applications is petroleum- derived from hexane, which produces higher yields and is quicker and less expensive and is used for more of the newer industrial oils such as soybean and corn oils.Footnote 3

Vegetable oil consumption in India is an integral aspect of Indian cooking and aids in promoting a balanced and healthy diet as vegetable oils are a rich source of unsaturated fatty acids, essential fatty acids (linoleic and alpha-linoleic), vitamin E, and contain no dietary cholesterolFootnote 4. Vegetable oil consumption is expected to expand in India from growth in household incomes, coupled with strong consumer demand. This segment presents a growing opportunity as domestic production volume is hindered by marginal lands lacking irrigation.Footnote 5

Positioning vegetable oil products in the world

India was the 2nd largest cooking oil market worldwide (after China) in 2018, with US$9.7 billion worth of retail value sales and a CAGR of 8.5% between 2014 to 2018. During this same period, India imported 96.3% of their vegetable oils. In terms of top world importers of vegetable oil products, India was the largest import market registering US$10.1 billion in 2018.

The top five vegetable oil companies had no influence in the India vegetable oil market indicating that its market is not dominated or affected by the top global vegetable oil companies.

Top five cooking oil companies worldwide in 2018, US$ millions, using fixed 2018 exchange rates
Company International retail sales (million) Sales in India (million)
1. Behshahr Industrial Co 200.6 N/A
2. La Fabril 193.6 N/A
3. Dalda Foods Limited 111.0 N/A
4. Mercasid SA 105.4 N/A
5. Pars Vegetable Oil Company 86.1 N/A
6. Others 1,445.3 N/A

Source: GlobalData, Intelligence, 2019

N/A: Not Available

Note: Please see definition page for GlobalData Intelligence's definition of 'oils'.

Top ten cooking oil markets retail sales value, US$ millions
Country 2018 retail sales
1. China 32,049.9
2. India 9,696.7
3. United States 6,156.7
4. Germany 3,990.0
5. Brazil 3,793.8
6. Japan 3,244.1
7. Turkey 2,297.0
8. South Korea 2,161.1
9. Russia 2,140.1
10. Italy 2,123.0

Source: GlobalData, Global Market Data: Segment Insights: 2019

The vegetable/cooking oil products[1] market in India in 2018, US$ millions
Indicator Value
Cooking oil retail sales, 2018 9,696.7
Compound annual growth rate of oil retail sales (2014-2018) 8.5%
Imports of vegetable oil products from the world, in 2018 10,072.0
Exports of vegetable oil products to the world, in 2018 964.0
Dependence on imports 96.3%

Source: GlobalData Intelligence and Global Trade Tracker, 2019

1: For the purpose of this report, Global Trade Tracker's use of "vegetable oil products" was defined using the following HS codes: 1507-1515, inclusively.

Production

Over 90% of oilseed production in India is centered in nine states; Madhya Pradesh, Rajasthan, Maharashtra, Gujarat, Andhra Pradesh, Karnataka, Tamil Nadu, Uttar Pradesh and Haryana. Rajasthan with an area share of roughly 20% contributes to over 40% of oilseed production in the country. More than half of the area dedicated to oilseeds is under irrigation in Haryana, Rajasthan and Uttar Pradesh. Footnote 6

Rapeseed oil (inclusive of India's imports of vegetable oils) is India's largest processed oil with production representing 2.5 million tonnes in 2014. The production volume of rapeseed oil is the only oil production that increased by a CAGR of 4.8% registered from 2010 to 2014. Safflower oil and soybean oil attained the largest declines in CAGR's attaining −13% and −11.6%, respectively.

Soybeans (used in the production of vegetable oils) are India's largest vegetable/edible oil crop produced with production representing 10.9 million tonnes in 2017. However, the production volume of soybeans has decreased by a CAGR of −1.9% between 2013 to 2017.

Rapeseed is the second largest oilseed crop with production representing 7.9 million tonnes recorded in 2017. Rapeseed and mustard seed are the main winter-sown oilseeds in India. According to the Solvent Extractors' Association (SEA) of India, farmers planted rapeseed and mustard seed on 6.64 million hectares during the 2018/19 season, up from 6.39 million hectares a year ago.Footnote 7 However, since more than two-thirds of total oilseed production is dependent on monsoon rainfall, inadequate and erratic rainfall in the past have typically resulted in lower than anticipated oilseed production.Footnote 8 The regions of Rajasthan, Uttar Pradesh, Haryana, Madhya Pradesh and Gujarat constitute 90% of production in India.Footnote 6 Sunflower and Safflower seeds experienced the largest decline in CAGR with −19.6% and −19.0% respectively from 2013 to 2017.

Crops processed in India 2010-2014, measured in '000 tonnes
Crops (tonnes) 2010 2011 2012 2013 2014 CAGR* % 2010-2014
Oil, rapeseed[1] 2,048.0 2,535.0 2,047.0 2,305.0 2,473.0 4.8
Oil, groundnut 1,901.0 1,595.0 1,602.0 1,250.0 1,250.0 −10.0
Oil, soybean[1] 2,038.0 1,954.0 2,262.0 1,690.0 1,247.0 −11.6
Oil, sunflower[1] 215.0 165.0 183.0 195.4 180.0 −4.3
Oil, linseed[1] 46.0 44.0 46.0 37.9 34.7 −6.8
Oil, safflower 54.0 45.0 44.0 31.0 31.0 −13.0

Source: FAOSTAT Agricultural Production, 2019

*CAGR: Compound Annual Growth Rate

1: Crops also produced in Canada

Crop production in India from 2013-2017, measured in '000 tonnes
Crops (tonnes) 2013 2014 2015 2016 2017 CAGR* % 2013-2017
Soybeans[1] 11,861.0 10,374.0 8,570.0 13,159.0 10,981.0 −1.9
Rapeseed[1] 7,820.0 7,877.0 6,282.0 6,797.0 7,917.0 0.3
Sunflower[1] 504.0 434.0 296.0 251.0 211.0 −19.6
Safflower[1] 109.0 113.0 90.0 53.0 47.0 −19.0

Source: FAOSTAT Agricultural Production, 2019

*CAGR: Compound Annual Growth Rate

1: Crops also produced in Canada

Trade overview

India had the largest market for vegetable oil with imports valued at US$10.1 billion. Canada was the twenty-third largest market in the world accounting for 0.9% of the total global market share.

Top ten importers of vegetable oil[1] worldwide in 2018, US$ billions
Country Imports in US$ billions Top suppliers and market share (%) Canada's share (%)
1 2 3
India 10.1 Indonesia: 37.3 Ukraine: 18.4 Argentina: 16.0 0.0
China 7.3 Indonesia: 41.2 Malaysia: 18.0 Canada: 13.0 13.0
United States 6.3 Canada: 28.0 Indonesia: 18.0 Spain: 9.3 28.0
Netherlands 4.2 Germany: 15.0 Malaysia: 12.1 Indonesia: 12.0 0.0
Italy 3.9 Spain: 30.0 Indonesia: 17.0 Greece: 12.0 0.0
Spain 2.8 Indonesia: 29.0 Ukraine: 9.2 Portugal: 9.0 0.0
Germany 2.6 Netherlands: 21.0 Indonesia: 16.0 Italy: 12.0 0.0
Pakistan 2.1 Indonesia: 71.1 Malaysia: 24.0 Brazil: 2.0 0.0
France 1.8 Spain: 30.4 Netherlands: 12.4 Belgium: 10.0 0.0
Belgium 1.6 Netherlands: 53.3 France: 14.0 Germany: 9.0 0.0

Source: Global Trade Tracker, 2019

1: For the purpose of this report, Global Trade Tracker's use of "vegetable oil products" was defined using the following HS codes: 1507-1515, inclusively.

India has a diverse supply network of vegetable oil products. In 2018, India's top three suppliers of vegetable oil products were Indonesia with a 37.3% market share, Ukraine 18.4% and Argentina 16% and volumes of 6,042.3 and 2,346.9 kg million from Indonesia and Ukraine respectively; while Malaysia supplied US$1,377.5 million of sales value and 2,149.2 kg million to India in 2018. Singapore obtained the highest CAGR of 266.3% achieved between 2014 and 2018 as import values increased from US$1.1 to US$200.3 million, while Malaysia had the largest declining CAGR of −14.3% as sales values decreased from US$2,559.3 million in 2014 to US$1,377.5 million in 2018. Canada was not an extensively measurable (41st) supplier to India in 2018 with India importing only a value of US$55,974 of vegetable oil products.

Top five suppliers of vegetable oil products to India, values in US$ millions, historical
Country 2014 2015 2016 2017 2018 CAGR* (%) 2014-2018 Market share (%) in 2018
World 10,601.9 10,450.6 10,455.2 11,831.1 10,071.9 −1.3 100.0
1. Indonesia 4,094.4 3,701.2 3,686.7 5,208.6 3,760.4 −2.1 37.3
2. Ukraine 1,534.3 1,306.5 1,245.7 1,765.8 1,851.0 4.8 18.4
3. Argentina 1,563.7 1,978.2 2,433.3 2,276.3 1,594.5 0.5 16.0
4. Malaysia 2,559.3 2,395.5 1,997.5 1,530.3 1,377.5 −14.3 14.0
5. Brazil 372.7 527.6 485.1 386.9 537.3 9.6 5.3

Source: Global Trade Tracker, 2019

*CAGR: Compound Annual Growth Rate

Note: For the purpose of this report, "vegetable oil" was defined using HS codes 1507-1515

Top five suppliers of vegetable oil products to India, volume in millions of kilograms, historical
Country 2014 2015 2016 2017 2018 CAGR* (%) 2014-2018 Market share (%) in 2018
World 12,151.9 15,146.9 14,193.9 15,201.4 14,564.5 4.6 100.0
1. Indonesia 4,890.8 5,893.8 5,325.1 7,034.4 6,042.3 5.4 42.0
2. Ukraine 1,645.5 1,511.8 1,467.1 2,144.3 2,346.9 9.3 16.1
3. Malaysia 3,090.9 3,852.2 2,938.9 2,031.8 2,149.2 −8.7 14.8
4. Argentina 1,664.2 2,598.4 3,134.7 2,764.8 2,078.8 5.7 14.3
5. Brazil 386.6 684.7 622.9 471.1 700.8 16.0 5.0

Source: Global Trade Tracker, 2019

*CAGR: compound annual growth rate

Note: For the purpose of this report, "vegetable oil" was defined using HS codes 1507-1515

The top imported vegetable oils to India in 2018 were palm oil and its fractions worth US$5.5 billion or 54.6% market share, soybean oil and its fractions worth US$2.3 billion representing a 22.6% market share followed by sunflower, safflower seed oil worth US$1.9 billion and 19% market share of imported oils. Other oils and their fractions category saw the largest CAGR valued at 12.6%, while palm kernel oil experienced the largest decline in CAGR at −13.5% in 2018.

India imports of vegetable oil by Harmonized System (HS) code, in US$ millions, historical
HS code Description 2014 2015 2016 2017 2018 *CAGR % 2014-2018
Total 10,601.9 10,450.6 10,455.2 11,831.1 10,071.9 −1.3
1511 Palm oil and its fractions 6,554.3 5,925.6 5,642.5 6,766.7 5,496.2 −4.3
1507 Soybean oil and its fractions 1,989.6 2,684.6 3,015.4 2,751.8 2,276.9 3.4
1512 Sunflower, safflower seed oil 1,536.7 1,316.8 1,315.6 1,864.9 1,917.7 5.7
1514 Rape, colza or mustard oil and its fractions 235.8 280.5 337.3 260.6 170.9 −7.7
1513 Palm kernel oil 229.6 193.0 82.0 120.7 128.7 −13.5
1509 Olive oil and its fractions 37.3 35.2 42.6 47.0 55.8 10.6
1515 Fixed vegetable fats and oils, incl. jojoba oil 12.4 8.3 14.9 12.7 15.9 6.4
1510 Other oils and their fractions 5.9 6.4 4.8 6.6 9.6 12.6
1508 Groundnut oil and its fractions 0.330 0.230 0.116 0.090 0.216 −10.0

Source: Global Trade Tracker, 2019

*CAGR: Compound Annual Growth Rate

In terms of import price, the top three vegetable oil imports to India, (palm oil and its fractions-HS 1511, soybean oil and its fractions-HS 1507 and sunflower, safflower seed oil-HS 1512) decreased in year-over-year value by 16.2%, 6.1% and 3.7% respectively. Palm oil decreased in global import prices from US$0.74/kg in 2017 to US$0.62/kg in 2018 while palm kernel oil-HS 1513, yielded the largest decline in year-over-year value growth as import price decreased by −20.3%. Groundnut oil and its fractions- HS 1508, in contrast, had the largest increase in import price (56.4%) in year-over-year growth.

Of note, global import prices of canola oil (1514) to India decreased by −5.8% in year-over-year value from US$0.86/kg to US$0.81/kg while India's import price of canola oil from Canada increased by 9.1% in year-over-year value from US$1.1/kg in 2017 to US$1.2/kg in 2018.

Vegetable oil imports to India by Harmonized System (HS) code, by import price US$/kg, 2017 and 2018
HS code Import value (US$ million) Import quantity (million kg) Import price (US$/kg) Year-over year[1] value growth %
2017 2018 2017 2018 2017 2018
1511 6,766.7 5,496.2 9,178.9 8,805.3 0.74 0.62 −16.2
1507 2,751.8 2,276.9 3,338.7 2,971.3 0.82 0.77 −6.1
1512 1,864.9 1,917.7 2,264.5 2,425.5 0.82 0.79 −3.7
1514 260.6 170.9 302.4 210.8 0.86 0.81 −5.8
1513 120.7 128.7 94.1 126.3 1.28 1.02 −20.3
1509 47.0 55.8 9.7 9.3 4.85 6.00 23.7
1515 12.7 15.9 10.2 12.7 1.25 1.25 0.0
1510 6.6 9.6 2.8 3.3 2.36 2.91 23.3
1508 0.090 0.216 0.028 0.043 3.21 5.02 56.4
Total 11,831.1 10,071.9 15,201.3 14,564.5 16.2 19.2 18.5

Source: Global Trade Tracker, 2019

1: Year over year Data available until 2017

Indonesia was a top product supplier of vegetable oil to India in 2018 providing US$3.7 billion of palm oil and its fractions or 98% of its total export market share. Ukraine supplied sunflower and safflower seed oil valued at US$1.8 billion or 99% of its total export market share to India and Argentina supplied US$1.5 billion of soybean oil and its fractions or 95% of its export market share to India, also in 2018.

Top five vegetable oil suppliers to India by top product type, in 2018 (US$ millions)

1. Indonesia
Harmonized System Code Product 2018
1511 Palm oil and its fractions 3,687.9
1513 Palm kernel oil 72.5
Source: Global Trade Tracker, 2019
2. Ukraine
Harmonized System Code Product 2018
1512 Sunflower, safflower seed oil 1,837.7
1507 Soybean oil and its fractions 10.9
1513 Palm kernel oil 1.2
1515 Fixed vegetable fats and oils, incl. jojoba oil 1.2
Source: Global Trade Tracker, 2019
3. Argentina
Harmonized System Code Product 2018
1507 Soybean oil and its fractions 1,521.7
1512 Sunflower, safflower seed oil 72.8
Source: Global Trade Tracker, 2019
4. Malaysia
Harmonized System Code Product 2018
1511 Palm oil and its fractions 1,333.7
1513 Palm kernel oil 43.6
1512 Sunflower, safflower seed oil 0.121
1515 Fixed vegetable fats and oils, incl. jojoba oil 0.053
Source: Global Trade Tracker, 2019
5. Brazil
Harmonized System Code Product 2018
1507 Soybean oil and its fractions 537.2
1515 Fixed vegetable fats and oils, incl. jojoba oil 0.023
Source: Global Trade Tracker, 2019

Canada's performance

Vegetable oil products

In 2018, Canada exported over US$2.9 billion worth of vegetable oil products to the world, with 60% going to the United States.

In 2018, India imported US$10.1 billion of the world's vegetable oil products, with Canada only accounting for US$55,974 of those import values.

Canada was the thirty-fifth largest exporter of vegetable oil products to India as Canada's supply to India of canola oil products decreased by a CAGR of −59.3% from 2014-2018, from a record high of US$28.9 million registered in 2016.

Vegetable oil products[1] export gap, historical (US$ millions)
Imports of vegetable oil products 2014 2015 2016 2017 2018 CAGR* % 2014-2018
India imports from the world 10,602.0 10,450.6 10,455.2 11,831.1 10,072.0 −1.3
India imports from Canada 1.9 7.0 28.9 0.045 0.056 −58.6
Gross export gap 10,599.9 10,443.6 10,426.3 11,831.1 10,071.9 −1.3

Source: Global Trade Tracker, 2019

*CAGR: Compound Annual Growth Rate

1: For the purpose of this report, "vegetable oil" was defined using HS codes 1507-1515

Canola oil products

Canola oil is Canada's largest edible oil product produced and exported to the world, with the United States and China representing our largest markets. Of note, canola oil (HS 1514) is the fourth largest imported vegetable oil by India from the world in 2018 accounting for US$170.9 million, representing almost 100% of the US$171.0 million of all canola related products imported from India. In 2018, India imported US$52,735 of canola oil from Canada accounting for 99.9% of all vegetable oils imported from Canada last year, 2018.

Selected canola products[1] export gap, historical (US$ millions)
Imports of canola products 2014 2015 2016 2017 2018 CAGR* % 2014-2018
India imports from the world 235.8 281.0 337.8 260.7 171.0 −7.7
India imports from Canada 1.9 7.0 28.9 0.045 0.053 −59.3
Gross export gap 233.9 274.0 308.9 260.7 170.9 −7.5

Source: Global Trade Tracker, 2019

*CAGR: Compound Annual Growth Rate

1: For the purpose of this report, "selected canola products" was defined using HS codes 1205, 1514, 230641, 230649

In 2018, India imported US$171 million worth of canola oil from the world. The top three canola oil supplying countries to India were the United Arab Emirates (UAE), Germany, and the Netherlands. The UAE held a 97.6% market share and supplied 207.6 kg million of canola oil in 2018 through their crushing facilities in Dubai, while Germany represented 1% of the market share and supplied 1.3 kg million of canola oil. The Netherlands also represented a 1% market share and supplied 1.3 kg million of the canola oil supply to India. Of the top five countries supplying canola oil to India, Germany registered the largest CAGR in total value sales from 2014 to 2018, with 181.9%.

Top five suppliers of canola oil (HS 1514) to India, in US$ millions, historical
Country 2014 2015 2016 2017 2018 CAGR* (%) 2014-2018 Market share (%) in 2018
World 235.8 280.5 337.3 260.6 171.0 −7.7 100.0
1. United Arab Emirates 185.0 220.7 293.1 253.5 166.8 −2.6 97.6
2. Germany 0.027 0.028 3.5 1.4 1.7 181.9 1.0
3. Netherlands 0.002 0.120 0.600 0.006 1.6 N/C 1.0
4. Spain 0.385 0.191 0.560 0.505 N/C 0.3
5. Australia 0.241 0.124 0.608 0.212 N/C 0.1
Canada (6) 1.9 7.0 28.9 0.045 0.053 −59.3 0.0

Source: Global Trade Tracker, 2019

*CAGR: Compound Annual Growth Rate

N/C: Not calculable

Top five suppliers of canola oil (HS 1514) to India, in kg million, historical
Country 2014 2015 2016 2017 2018 CAGR* (%) 2014-2018 Market share (%) in 2018
World 252.3 331.1 414.3 302.4 210.8 −4.4 100.0
1. United Arab Emirates 197.4 260.1 364.8 295.0 207.6 1.3 98.5
2. Netherlands 0.1 0.5 1.3 N/C 0.6
3. Germany 0.015 0.024 3.0 1.0 1.3 202.0 0.6
4. Spain 0.2 0.1 0.4 0.4 N/C 0.2
5. Australia 0.2 0.1 0.6 0.2 N/C 0.1
Canada (6) 1.4 7.5 0.035 0.042 0.044 −58.0 0.0

Source: Global Trade Tracker, 2019

*CAGR: Compound Annual Growth Rate

N/C: Not calculable

Consumption trends

According to GlobalData, India is one of the youngest and largest countries in the world with rising disposable incomes. Increasing public and foreign investments and a rapidly growing construction sector are expected to fuel India's economy and create new employment opportunities for the consumer. These factors, in addition to an increasing awareness in healthier eating and a move from 'loose 'edible oil to refined, packaged options, will contribute to the growing consumption of vegetable oils by the Indian consumer.

Presently, the consumption of oils and fats in India is higher among men (51.7%) than in women (48.3%) and by age group; kids and babies aged (0-15 yrs) are the largest consumers at 28.1%, followed by older consumers (age 55+) at 16.4%, the early and older young adults (16-24 and 25-34 yrs) respectively at 14.8%, almost equally followed by pre-mid-lifers (35-44 yrs at 13% and mid-lifers 45-54 yrs) at 12.9%.

Consumption by education level is highest amongst those at the tertiary level at 58.9%, followed by lower secondary and upper secondary accounting for a combined 81% market share of those attaining a higher and/or secondary level education. In terms of regionalization, 93.1% of those living in urban areas consume oils and fats in comparison to only 6.9% of those living in rural areas.

The per capita consumption of oils was 6.2 kg in India in 2017, compared to the Asia-Pacific and global per capita consumption rates of 5.6 and 6.5 kg, respectively. The per capita expenditure of oils and fats is lower in India at US$8 compared to the Asia-Pacific regions (US$15.4) and globally at US$18.7, in 2017.

Consumption of edible oils varies according to region. In southern India, coconut, peanut and sunflower oils are readily consumed while peanut and cottonseed oils are more prevalent in Gujarat and Maharashtra. Rapeseed oil is consumed mostly in the northeastern, eastern and northwestern parts of India, whereby soybean oil is prevalent in central India and rice bran oil is most commonly consumed across eastern India.Footnote 8

Mustard-rapeseed oil has been one of the most consumed edible oils (after palm and soybean) in India and its consumption is generally confined to the northern regions. The consumption pattern across classes and income levels suggests that mustard oil is an integral aspect of many Indian households, though at higher income levels, more expensive oils were consumed. In addition, mustard oil consumption is typically more prevalent in rural areas, yet total consumption is usually higher in urban areas. Urban households are more likely to use branded oils (more premium and expensive products) while rural households are more likely to consume unbranded or loose oil (lower quality and less expensive).Footnote 9

Over 90% of mustard oil is used for cooking and the rest is used for pickling and consumption as raw oil used directly on foods. Furthermore, in rural areas the pungency of the oil obtained when cooking food at lower temperatures is preferred in comparison to urban areas, where pungency of the oil is less desirable and food is cooked at higher temperatures.Footnote 9

Retail sales

Retail value sales of cooking oil products in India have been steadily increasing at a CAGR of 8.5% from 2014 to 2018 and growth is expected to continue at a rate of 5.4% between 2019 to 2023. Total volume sales of cooking oil products obtained a CAGR of 7.6% between 2014 and 2018 while the expected volume sales are set to decline by 4.7% from 2019 to 2023.

The retail market for cooking oils has been increasing over the 2014-2018 from US$9.7 billion in retail value sales in 2018 and is forecasted to attain US$12.8 billion by 2023. Vegetable oil had the largest retail value for both the historic and forecasted period; however, olive oil obtained the highest CAGR's of 16.7% and 7.7%, respectively for each period. The total volume sales of cooking oil products will increase from 8,438.7 million kg in 2018 to 10,712.8 million kg in 2023. Similarly, retail value sales of vegetable oil had the largest total volume sales for both the historic and forecasted period and olive oils obtained the highest CAGR's of 15.8 and 7.0, respectively for each period.

Historical and forecast off-trade retail value sales of cooking oil products in India, in US$ millions, fixed 2018 exchange rates
Category 2014 2018 CAGR* % 2014-2018 2019 2023 CAGR* % 2019-2023
Total cooking oils 7,006.8 9,696.7 8.5 10,334.2 12,777.4 5.4
Vegetable oil 5,405.1 7,439.5 8.3 7,912.5 9,701.1 5.2
Sunflower oil 1,319.0 1,813.4 8.3 1,940.0 2,447.2 6.0
Olive oil 112.4 208.5 16.7 229.8 309.0 7.7
Corn oil 7.1 9.6 7.8 10.2 12.7 5.6
Other edible oils 163.3 225.6 8.4 241.6 307.5 6.2

Source: GlobalData-Global Market Data; Segment Insights, 2019

*CAGR: Compound Annual Growth Rate

Note: Please see definition page for GlobalData Intelligence's definition of 'vegetable oil' and 'other edible oils'

Historical and forecast off-trade retail volume sales of cooking oil products in India, in kg million
Category 2014 2018 CAGR* % 2014-2018 2019 2023 CAGR* % 2019-2023
Total cooking oils 6,301.6 8,438.7 7.6 8,924.1 10,712.8 4.7
Vegetable oil 5,525.2 7,434.2 7.7 7,866.1 9,455.3 4.7
Sunflower oil 688.8 889.1 6.6 936.4 1,112.9 4.4
Other edible oils 74.0 92.5 5.7 96.7 112.6 3.9
Olive oil 10.3 18.5 15.8 20.2 26.5 7.0
Corn oil 3.4 4.4 6.7 4.7 5.6 4.5

Source: GlobalData-Global Market Data; Segment Insights, 2019

*CAGR: Compound Annual Growth Rate

Note: Please see definition page for GlobalData Intelligence's definition of 'vegetable oil' and 'other edible oils'

In 2017, the five largest cooking oil products trademark (owner) brands in India controlled 69.2% of the market in terms of value sales. Wilmar International Ltd. maintained its prominent position with retail value sales of US$1.9 billion and a market share of 20.6% in 2017 at a CAGR of 9.1% from 2014 to 2017. Cargill Inc. recorded the largest CAGR of 10.4% within the same period. In terms of volume sales, the brand (trademark owner) Ruchi (Ruchi Soya Industries Ltd.) held 12.6% of the market share, followed by Fortune (Wilmar International Ltd.) with 12.0% of the market share garnered in 2017.

In comparison to other Asia-PacificFootnote 10 countries, India has the highest fragmentation of both brand and private labels in relation to the oils and fats sectors for brand values (oils had a 98.5% brand label penetration versus 1.5% private label penetration).

Top five vegetable cooking oil products trademark (owner) brands in India – retail value sales, in US$ millions, fixed 2018 exchange rates, historical
Companies 2014 2015 2016 2017 CAGR* % 2014-2017
Fortune (Wilmar International Ltd.) 1,438.5 1,574.0 1,723.2 1,865.9 9.1
Ruchi (Ruchi Soya Industries Ltd.) 1,126.4 1,233.2 1,349.1 1,459.4 9.0
Sundrop (Agro Tech Foods Ltd.) 987.4 1,083.5 1,179.5 1,269.8 8.7
Dhara (Mother Dairy Fruit & vegetable Pvt. Ltd.) 771.5 844.7 926.2 1,004.4 9.2
Cargill Inc. 497.2 560.0 615.7 668.4 10.4

Source: GlobalData Intelligence, 2019

*CAGR: Compound Annual Growth Rate

In India, convenience stores (73.2%), also known as kirana stores, are the primary distribution channel for oils and fats, followed by hypermarkets and supermarkets (15.3%), food & drink specialists (10.1%), other stores and dollar stores at 0.8% and 0.7% respectively as of 2017.Footnote 10 In 2017, convenience stores attained total retail value sales of US$6.6 billion in its position as a primary distributor of oils and fats to the Indian consumer.

Share of key off-trade retail distribution channels for sales of oils in India, 2017
Channel Year over year[1] value growth % US$ million Share %
Convenience stores 8.1 6,623.1 73.2
Hypermarkets and supermarkets 7.6 1,383.5 15.3
Food and drink specialists 7.6 909.0 10.1
Others −4.1 70.1 0.8
Dollar stores, variety stores and general merchandise retailers 9.3 59.0 0.7
Total 9,044.7 100.0

Source: GlobalData 2019

1: Year over year Data available until 2017

Consumer foodservice in India

The foodservice profit sector in India is expected to experience a slight increase in sales value growth of 9.6% by 2022. The foodservice market in India is highly fragmented, with independent foodservice providers accounting for the vast majority of sales. Chain outlets will grow faster than independent outlets, partially through adopting elements of localism and authenticity that are traditionally the cornerstone of independents' offerings.

Within the foodservice sector, 80.5% of the sales value of cooking oils in India in 2018 were distributed through restaurants, followed by 6.4% of sales value distributed via pubs, clubs and bars. Similarly in the forecasted period, restaurants are expected to account for 80.8% of the market share by 2022 with sales valued at US$1.2 billion, followed by a 9% market share of sales distributed via pubs, clubs and bars recording US$90.7 million in 2022.

In the restaurant outlet type category, quick service restaurants (QSR)'s grew at a CAGR of 11.2% between 2015 and 2017 and is expected to increase to a CAGR of 11.5% between 2017 and 2022. Rapid urbanization, increasing levels of disposable income and the growing influence of Westernization, particularly the emergence and adoption of food delivery companies such as Swiggy, Zomato and Uber Eats, are expected to attribute to the healthy performance within this channel. Full service restaurants (FSR)'s experienced the second-strongest sales value growth in the foodservice profit sector with a CAGR of 11.7% between 2015 and 2017 that is expected to increase to 6.3% by 2022. Although independent operators dominate, over half of surveyed Indian consumes indicated a preference for chain outlets, primarily due to the higher standards of quality and hygiene they are perceived to offer.Footnote 11

Share of key 'for profit' foodservice distribution channels for sales of cooking oils, historic and forecast, in US$ million and % share
Outlet type 2015 2018 Market share % 2018 CAGR* % 2015-2018 2019 2022 Market share % 2022 CAGR* % 2019-2022
Total cooking oils 759.4 1,005.4 100.0 9.8 1,101.7 1,448.9 100.0 9.6
Restaurant 609.9 809.6 80.5 9.9 887.9 1,170.3 80.8 9.6
Pub, club and bar 49.4 64.2 6.4 9.1 70.0 90.7 6.3 9.0
Mobile operator 28.4 37.3 3.7 9.5 40.7 53.2 3.7 9.3
Accommodation 28.3 36.9 3.7 9.2 40.3 52.4 3.6 9.1
Workplace 20.9 27.5 2.7 9.6 30.0 39.2 2.7 9.3
Travel 11.6 15.2 1.5 9.4 16.6 21.6 1.5 9.2
Leisure 10.2 13.7 1.4 10.3 15.1 20.1 1.4 10.0
Retail 0.78 1.01 0.1 9.0 1.1 1.4 0.1 8.4

Source: GlobalData 2019

*CAGR: Compound Annual Growth Rate

Health and wellness products

The ever 'health conscious consumer' has started opting for healthier monounsaturated and polyunsaturated fatty acids. Studies have shown that monounsaturated fats lower the mortality rate from coronary heart disease and lower levels of total cholesterol and LDL cholesterol. Polyunsaturated fats show strong cholesterol lowering effects and improved insulin sensitivity. They also boost the immune system, improve skin quality and the functioning of the nervous system.Footnote 2

The trend towards healthier alternatives has been increasing lately and olive oil is recognized as an oil providing the most perceived benefits. Subsequently oil types such as soybean oil, sunflower oil and safflower oil have also garnered attention in light of their low fat and low absorb qualities making their selection and use in preserving and enhancing the flavour of a particular cuisine appealing.Footnote 12

In addition, the Food Safety and Standards Authority of India (FSSAI) has recently tabled mandatory fortification of staple foods, including the edible oil sector, which claims that the fortification of edible oils may be too difficult to implement in their specific industry. According to the FSSAI, 47% of edible oil produced in India is fortified. The fortification of edible oils involves the addition of vitamins A and D and essential micronutrients to assist in preventing nutrient deficiency and malnutrition.Footnote 13

The reservations to implement fortification of the edible oil industry seem to be due to high costs, in addition to the practicality of such an initiative. From a scientific perspective, the usefulness of such an implementation of vitamins to oils would be questionable as over 90% of edible oils used in India are for cooking purposes and the elevated temperatures resulting from the cooking process can cause the bioavailability of the added vitamins and minerals to be lower or non-existent after cooking.Footnote 14

Companies like Cargill Inc., and Colavita USA Llc, in addition to private labels provide cooking oil products to India marketed as health and wellness products and contain consumer benefits defined or recognized only as cardiovascular health management and cholesterol free in the product attribute segment. In 2017, there were US$33.1 million in retail value sales of cooking oil products found with health & wellness claims versus US$9.3 billion in retail value sales of those products without these claims in India.Footnote 15 Cooking oil products sold between 2015 to 2018 registered an increasing CAGR of 20.8% and are expected to increase into the forecasted period, albeit at a lower rate of 12.8%.

Historical and forecast retail value sales of health and wellness vegetable oil products in India, by consumer benefits segment, in US$ millions, fixed 2018 exchange rates
Consumer benefits segment 2015 2018 CAGR* % 2015-2018 2019 2022 CAGR* % 2019-2022
Cardiovascular health 21.9 38.7 20.8 45.9 65.9 12.8

Source: GlobalData: Health & wellness, 2019

*CAGR: Compound Annual Growth rate

Product launch analysis

There has been a varied amount of product launches for vegetable oil products in India in the last five years. New product launches decreased from 2014 to 2015 and more recently from 2017 to 2018 but showed increases from 2015 to 2017. Vegetarian product launches accounts for 94% to 98% of vegetable oil products available in bottle format, either formulated as new packaging or new products, in unflavoured/plain blended flavours in India between 2014 to 2018.

Food use of oilseeds is expected to rise driven by a steady growth in demand for value added food products made from oilseeds. The category of food products includes savoury products, candy bars, snack foods, curries, and sauces made from peanuts, rapeseed, mustard and soybean.Footnote 8

Product launches of vegetable oil products in India, 2014-2018, by 2018 product attributes
Product attributes Yearly launch counts
2014 2015 2016 2017 2018
Yearly product launches 281 246 308 334 266
Top five claims
Vegetarian 271 233 303 322 257
Vitamin/mineral fortified 26 29 41 68 98
Functional-cardiovascular 61 46 54 68 57
Antioxidant 46 30 55 68 57
Social media 28 18 37 54 55
Imported status
Imported 32 25 25 16 9
Not imported 222 19 53 42 40
Top packaged types
Bottle 177 167 199 205 181
Flexible 70 45 61 64 43
Can 9 6 17 35 18
Flexible sachet 13 18 11 6 9
Aerosol 3 1 4 3 5
Top launch types
New packaging 118 123 142 141 141
New product 104 81 100 141 79
New variety/range extension 46 36 49 38 33
Relaunch 11 6 16 13 13
New formulation 2 1 1
Top flavours (including blend)
Unflavoured/plain 265 241 300 332 265
Roasted 1 1 2 1
Mustard 3 1
Chili/chili pepper 2 1 1 1
Basil 1
Top five ingredients[1]
Antioxidants 69 68 82 85 95
Tertiary butyl hydroquinone 62 61 71 81 90
Vitamin A 22 31 33 40 66
Sunflower seed oil 37 42 64 57 61
Vitamin D 20 27 34 39 54
Top five companies
Adani Wilmar 7 6 13 15 15
Cargill 4 4 4 8 7
Emami Agrotech 7 7 3 6
Marico 3 4 3 12 6
Patanjali Ayurved 2 3 6

Source: Mintel, 2019.

1: Products may have more than one claim associated to product

The number of product launches for canola oil products in India within the last five years have been relatively small in comparison to the larger category of vegetable oil products launched within India from 2014 to 2018. New product launches of canola products reached a high of 17 products recorded in 2017 to as low as 11 products launched in 2018. Similarly, canola oil product launches with vegetarian claims were the predominant product attribute found on the bottle packaging with functional cardiovascular, functional other and vitamin/mineral fortified claims. The launch types were predominantly new packaging.

Product launches of canola oil products in India, 2014-2018, by 2018 product attributes
Product attributes Yearly launch counts
2014 2015 2016 2017 2018
Yearly product launches 7 7 11 17 11
Top five claims
Vegetarian 7 7 11 16 11
Vitamin/mineral fortified 0 0 0 2 6
Functional-other 0 0 2 6 4
Low/no/reduced saturated fat 6 3 6 2 4
Functional-cardiovascular 0 3 3 8 4
Imported status
Imported 5 7 8 7 3
Not imported 1
Top packaged types
Bottle 7 7 11 15 10
Can 0 0 0 1
Flexible 0 0 0 2 0
Top launch types
New packaging 4 4 7 9 7
Relaunch 1 0 0 0 2
New variety/range extension 1 2 2 0 2
New product 1 1 2 8
Top flavours (including blend)
Unflavoured/plain 7 7 10 17 11
Canola 0 0 1 0 0
Top five ingredients[1]
Low erucic acid rapeseed oil 6 2 8 13 9
Food acids 0 3 4 12 7
Vitamin A 0 0 0 0 4
Vitamin D 0 0 0 0 4
Antioxidants 2 0 0 5 4
Top five companies
Jivo wellness 2 3 2 3 3
Cargill 0 0 0 0 2
Riverina oils and bioenergy 0 0 0 1 1
Lalit hans protein 0 0 0 1 1
Universal corporation 0 0 0 0 1

Source: Mintel, 2019.

1: Products may have more than one claim associated to product

New cooking oil product examples

Groundnut Oil
Company Lalit Hans Protein
Brand Oreal
Category Sauces and seasonings
Country India
Import status Not imported
Store type Supermarket
Date published December 2018
Launch type New variety/Range extension
Price in US$ 12.54 (5 litres)

Oreal Groundnut Oil is now available. This vegetarian product is said to be good for all cuisines, can be used for general cooking and for added flavour, and features a high smoke point compared to other oils. It is enriched with vitamins A, D, and E which increases its shelf life and acts as antioxidant, is said to provide healthy heart, energize the body, and boost the immune system, and retails in a 5L pack, bearing the Facebook, Instagram, Linkedin, Pinterest and YouTube logos.

Refined Sunflower Oil
Company Avenue Supermarts
Brand D-Mart Swaad
Category Sauces and seasonings
Country India
Store type Supermarket
Date published November 2018
Launch type New product
Price in US$ 1.16 (1 litre)

D-Mart Swaad Refined Sunflower Oil is now available. This product is suitable for vegetarians, is fortified with vitamin A and vitamin D, and is free from argemone oil.

Edible Vegetable Oil
Company Cargill
Brand Nature Fresh Acti Heart
Category Sauces and seasonings
Country India
Store type Supermarket
Date published October 2018
Launch type New packaging
Price in US$ 2.32 (1 litre)

Nature Fresh Acti Heart Blended Edible Vegetable Oil has been repackaged and is available in a 1L bottle featuring a QR code. This product is described as a unique blend which provides the combined goodness of rice bran oil and rapeseed low erucic acid oil for an active life, and has a low oil absorption. It contains omega 3 which is claimed to fight inflammation and helps in the maintenance of normal lipid profile, and gamma oryzanol increases good cholesterol and reduces bad cholesterol levels. It is high in monounsaturated fats, is said to have an ideal omega 6 to omega 3 ratio, and is enriched with vitamin A, vitamin D and vitamin E. The oil is suitable for vegetarians and is free from argemone oil.

New canola oil product examples

Pure & Natural Canola Oil
Company Gobbledygook Marketing
Brand Sattvic Health
Category Sauces and seasonings
Country India
Store type Mass merchandise/Hypermarket
Date published September 2014
Launch type New packaging
Price in US$ 13.76 (5 litres)

Sattvic Health Pure & Natural Canola Oil is now available in a redesigned 5L pack. This vegetarian product is rich in omega 3 and 6, and has a high MUFA content and a high smoke point. This tasteless and odourless product is suitable for all kinds of cooking. It is low in saturated fats, and is free from cholesterol and trans fat.

Canola Oil
Company Lalit Hans Proteins
Brand Oreal
Category Sauces and seasonings
Country India
Store type Traditional retail outlet
Date published November 2017
Launch type New product
Price in US$ 8.21 (2 litres)

Oreal Canola Oil is said to be 100% pure and rich in omega-3, with 0% cholesterol. The product is claimed to be good for a smart brain and a healthy heart. This vegetarian cooking oil for all ages is said to be one of the most versatile cooking oils, and can be used for a number of dishes and cooking methods. The product has been United States Food and Drug Administration (USFDA) approved for healthy and nutritional cooking, and retails in a 2L bottle, featuring the Twitter and Facebook logos.

Omega-3 Rich Cooking Canola Oil
Company Jivo Wellness
Brand Jivo
Category Sauces and seasonings
Country India
Store type Supermarket
Date published October 2018
Product source Shopper
Launch type Relaunch
Price in US$ 5.86 (two 1 litre bottles)

Jivo Omega-3 Rich Cooking Canola Oil has been relaunched with a new brand name, which was previously known as Jivo Canola, and with a newly designed pack. The ISO 9001 and ISO 22000 certified vegetarian product is sourced from the farms of Canada, is free from argemone oil and can be used for cooking, frying, roasting, baking and grilling. It is fortified with vitamins A and D, contains vitamins E and K and retails in a pack, containing two 1 litre bottles which comes with a free 1kg jivo basmati rice. The profits from this product are said to be dedicated to empower rural poor through value-based education, healthcare and social welfare.

Opportunities and challenges for Canada

The Indian market is segregated into various regions encompassing both urban and rural markets and is a major attraction for global corporations. Over 863.1 million Indians live in rural areas, compared to 454.0 million in urban areas (GlobalData, Macroeconomic Indicators 2019). While the urban population is growing, it will likely be several decades before India's urban population supersedes the rural population.

Given the expected continued growth in the vegetable oil market in India, Canadian vegetable oil producers have an opportunity to expand their exports into the market. Canola oil, Canada's largest oil product and export commodity, as well as other canola products remain an important trade opportunity. That said, it is important for Canadian exporters to work closely with their importing partners to ensure that India's import requirements are met and that the necessary documentation is provided, and recognize that significant commitment and market development efforts are required to penetrate the India market.

Basic Market Entry Strategies

Canadian companies looking to enter the Indian market should act on the following points before making major investments and other commitments:

Marketing:

Business:

The CanExport SME Program

The CanExport SME program (small and medium-sized enterprises that were formerly eligible under the AgriMarketing Program) provide(s) direct financial assistance to small and medium-sized businesses (SME's) registered in Canada to help them develop new export opportunities and markets, especially high-growth emerging markets. CanExport provides financial support for a wide range of export marketing activities.

India Import Duty Calculator

To assist Canadian exporters interested in suppling their products to the Indian market, the India Import Duty Calculator is a website maintained by India's Central Board of Indirect Taxes & customs and is updated regularly with all recent notifications and applicable import duties, social welfare charges and GST, according to commodity. Due to recent fluctuations in tariffs, it is suggested that exporters consult the India Import Duty Calculator website to verify potential tariff applications in accordance with some tariff lines.

Conclusion

The Indian vegetable oil market is expected to continue to increase over the forecasted period. Vegetable oil in particular, attained the largest retail value for both the historic and forecasted period, while olive oil had the highest growth rates of 16.7% and 7.7% respectively for the historic (2014-18) and forecasted (2019-22) periods. Canola oil is expected to remain a measurable portion of the vegetable oil market share, despite recent decreases in import growth rates.

Despite the measured growth for vegetable and canola oils supplied by Canada, the opportunity remains for Canada to increase its presence and positive brand image within the Indian market.

Definitions

Oils
All types of cooking oils, and includes vegetable, olive oil, sunflower oil, palm oil, and corn oil, etc. as per GlobalData Intelligence definitions.
Other edible oils
All edible oils not considered elsewhere for the relevant country, as per GlobalData Intelligence definitions
Vegetable oil
Any group of edible oils that are esters of fatty acids and glycerol obtained from plants as per GlobalData Intelligence definitions

For more information

International Trade Commissioners can provide Canadian industry with on-the-ground expertise regarding market potential, current conditions and local business contacts, and are an excellent point of contact for export advice.

For additional intelligence on this and other markets, the complete library of Global Analysis reports can be found on the International agri-food market intelligence page, arranged by region.

Resources

Sector Trend Analysis – Vegetable oils in India
Global Analysis Report

Prepared by: Laurie Bernardi, International Market Research Analyst

© Her Majesty the Queen in Right of Canada, represented by the Minister of Agriculture and Agri-Food (2020).

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