With growing quality consciousness and plummeting price differences between packaged and non-packaged edible oils, the packaged edible oil sector will capture 50% of the market share within three years. The packaged edible oil consumption is only about 20% of the total 12.5 million tonne domestic consumption.
“Due to advancement of packaging technology, the price difference between packaged and loosely sold oils has significantly come down,” Siraj A Chaudhry, chief executive officer, Refined Oils, Cargil India told FE.
Cargil controls more than 12% of the packaged edible oil market. According to Siraj, as a result of the increase in health consciousness, consumers even in the smaller towns are gradually shifting to packaged edible oils from loosely sold oils. The packaged edible oil industry is growing at 10% annually and half of the market will be controlled by packaged oil manufactures within three years.
“With the competition increasing after the arrival of retail companies, maintaining quality while keeping the prices down would be a challenged for all the packaged oil makers,” Siraj said. He urged the government to ensure better warehousing facilities at the rural areas so that oil seed growers got better prices.
Cargil sells edible oil through Nature Fresh and Gemini brands. The company has been selling soyabean, mustard, groundnut & palm oils through these two brands. Apart from Cargil, Adani Wilmar Limited, owner of Fortune brand, National Diary Development Board’s Dhara brand and other small players own rest of the packaged edible oil market.
India is also a leading producer of oilseeds, contributing more than 8% of world oilseed production. More than 10 million hectares of land are under oil seed cultivation in the country. India is estimated to account for 6% of world’s production of edible oils. Though it has the largest cultivated area under oilseeds in the world, the crop yields is only about 50-60% of the world’s average.