Expensive V/S Extensive: What is that the Indian Edible Oil market is looking for?
Oct, 17

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Expensive V/S Extensive: What is that the Indian Edible Oil market is looking for?



With olive oil making its way into the middle class kitchen, with smaller packaging & lesser price, the palm oil is still occupying a huge share from the lower middle class population and the voluminous use in the commercial sector due to its low price.

It was in early 2008 when the central launched a scheme to sell palm oil through ration shops at subsidized rates, further the state governments adding up certain subsidiaries. Even though the scheme is still providing about two crore families in every state, relief against the soaring prices of essential commodities, it caused irreversible damage to the perception towards the oil. This was the reason why the population of the middle class and above, started considering the oil to be the poor man’s oil, added with its dark colour. On the other hand, the olive oil had made its significant influence on overly health-conscious people and the elite population. Because of the high pricing and complex variant names, the oil was seen as luxury even by the higher middle class population then. Forwarding a decade, due to many factors, the olive oil is seen as an affordable luxury by many now, the palm oil has hardly coped up, still been the poor man’s companion.

With reference to the recently published article of Actual Market Research under the title, ‘India Edible Palm Oil & Olive Oil Market Outlook, 2025’, the consumption of palm oil is expected to grow at a rate of over 3%. Even though considered as expensive oil, with the increasing awareness and disposable income, the consumption of olive oil is expected to grow incredibly from below 2% in the period 2014-19 to more than 5% through the forecasted period. India relies heavily on the imports for both these oil, due to the lack of favourable conditions for cultivation. This extensive import has also influenced the consumption pattern of the oil, making olive oil users shift from the unorganized market towards an online purchase in order to get a higher quality product. The unorganized market for olive oil has made a huge profit with the increasing demand of the consumers for olive oil, who were fooled by the adulterated olive oil. With the increasing awareness among the consumers, due to the increasing use of the internet and leading brands promoting the harms of such oils, the share of the organized market is expected to grow over 58% by the end of the forecasted period, by volume. As the palm oil market gets the major contribution of the sales derived from the fair price stores, the market is going to be dominated by the offline sales channel over the long period. The purchase of olive oil from the online market is comparatively higher than most of the oils, owing to the discounts and easy comparison of the brands. The online market is expected to cross INR 160 Cr, which is much higher than the market value of INR 39.41 Cr, in the year 2015.

The commercial use of palm oil is higher in comparison to any other oil that results in the frequent purchase of higher quantity. Palm oil can be stored for up to 12 months with little spoilage. This is the primary reason why the oil is used in adulteration of the expensive oils to increase the profit margin. Due to the high price of olive oil, companies started blending of olive oil with other edible oil such as rice bran oil. Pure and pomace olive oil are the most popular variants, although extra virgin olive oil is gaining momentum due to its health benefits.

Production of olive oil in India as of now is only in Rajasthan as it is the only region which fits the production criteria. Being is the largest consumer and importer of palm oil in the world, India is now in the need to focus on becoming self sufficient for the palm oil as the increasing demand cannot be sustained just by increasing the import quantity, as it would be exporting its biodiversity issues to the supplying countries. To overcome this, the steps are being taken to promote the cultivation of palm in a big way in the North-East States, in the near future.