India Olive Oil market - 17 million ton cooking-oil market — but demand is growing

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Since the mid-2000s, India has imported vast quantities of olive oil to satisfy the aspirations of a minuscule segment of India’s urban population.

India is already an edible oil deficit nation requiring importing 48 per cent of its domestic needs. The recent downslide in the value of the rupee hurt India’s food security in manifold ways because we failed to take advantage of the fall in the global prices of most varieties of edible oils. But the olive oil import lobby of India manipulated the situation in such a way that larger quantities of this luxury product flowed into India.

That’s because this little-known, unorganised sector, enjoying absolutely nil production in India, is experiencing annual demand growth between 25 per cent—2300 tonnes in 2007 to 4500 tonnes in 2008—and somewhere close to 66 per cent when the total touched 42,000 tonnes in 2012. Looking at the entire import basket of India, it’s difficult to find another item that has seen growth on a scale anything remotely spectacular.

“India imported more then 12 000 tones in the year ending March 2013 as compared to 7,163.08 tones in 2012, producing a never-before-seen increase of 66.36 per cent,” Indian Olive Association said in a statement.

“The 66 per cent import growth rate comes despite a price increase of more than 40 per cent in the last year in producer countries. Prices remain on historical highs even today despite the expectation of a reasonable crop this year,” the association said.

An additional adverse factor is the steep depreciation of the rupee in recent weeks. “January 2013 saw an average rate of euro at Rs 71.60 whereas June 2013 saw an average rate of Rs 76, an increase of 6.15 per cent,” it said.

The variety of olive oil that is available in India is priced anywhere from Rs 400 to Rs 800 a litre. It is paradoxical that the International Olive Council, a UNDP body, along with the Indian Olive Association could make claims on the benefits of consuming olive oil to fight major health issues related to heart diseases and diabetes in contradiction to the IOC’s own data on India which shows that almost all the oils imported into India are of the refined variety—dominated by Pomace olive oil.

The association said that most Indian companies have been compelled to raise olive oil prices between 20-40 per cent in 2013 either by increasing MRP or by reducing market offers and schemes.

Spain and Italy continued to dominate Indian imports in fiscal year 2013 with Spain accounting for 59.18 per cent and Italy 31.26 per cent in total imports. Imports from Spain rose to 7,052.17 tonnes against 3,407.16 tonnes last year, while imports from Italy increased to 3,724.88 tonnes from 2,564.90 tonnes last year.

Getting Indians to switch to olive oil will be no easy feat. It currently makes up a nanoscopic 12,000 tons of India’s 17 million ton cooking-oil market — but demand is growing.

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