Transcript 74th IASC World Congress 2005

Overview of Indian Oilseed Sector &
Short Term & Long Term Demand-Supply
& Import of Edible Oils
By:
Dr.B.V.Mehta
Executive Director
The Solvent Extractors’ Association of India
8th – 9th Nov 2012
Guangzhou, China
1
Presentation Sequence
• SEA Profile
• Incredible India
• Indian General Economy
• Agricultural Economy
• Indian Oilseed Sector
• Edible Oil Demand & Supply – Short term &
Long term projection
2
SEA Profile
• Formed in 1963 to foster the development & growth of the
Solvent Extraction Industry in India
• Largest and Premier Association in the Vegetable Oil
Sector in India
• First Association in Vegetable Oil & Oilseed sector to
receive ISO 9001 Certification in India (2004)
• Recognised as NGO and TPO by Government of India
3
SEA Members
Over 850
Members
India
• S. E. Units
• Oil Millers
• Refiners
. Vanaspati Mnfrs.
. Importers
. Exporters
. Surveyors
. Shipping Agents
. Fin. institutes
. Foreign Buyers &
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43
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291
8
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2
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many more….
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4
Indian General Economy
5
What People Talk About India
• Second most populous nation
• 1.21 Bn people
• Largest Democracy
• Multi ethnic country
• Country with maximum young people
• Median age is 24 years
• Amongst the fastest growing economies
• Fourth largest economy
• Literacy level – 65% (2012)
6
Indian Macro-economic Overview
• India – a fast growing significant economy
in spite of global slowdown
• Strong Macro-economic fundamentals
• GDP Value: Over US$ 2.0 Trillion (Tn)
• Purchasing Power Parity (PPP): US$ 5 Tn
• Forex Reserve: US$ 293 Bn
• FDI Flow US$ 36.5 Bn (2011-12)
• Household Savings
(world’s highest)
Rate
31.6%
(2011-12)
7
India's Overall GDP Growth
9.5 9.6 9.3
GDP Growth Rate (%)
8.5
8.4 8.4
7.5
6.7
6.5 6.1
4.8
5.8
4.4
6.5 6.5
3.8
 The overall GDP growth in last five years is registered at 7.8%
 For FY12-13, growth is forecasted at 6.5%
Source : CMIE
8
Indian Agriculture Scenario
9
Agriculture GDP Growth Rate (%)
Agriculture Sector GDP Growth
 Agriculture Sector Growth depends heavily on monsoon performance. Indian
Govt. is aiming at 4% Agriculture GDP growth to achieve 10% overall GDP growth
 FY12-13, the growth is forecasted at 1.6% due to poor monsoon
Source : CMIE
10
India’s Ranking in the World
• Area (3.3 Mn Km2)
No. 7
• Arable Land (161.7 Mn Ha)
No. 2
• Irrigated land (56.0 Mn Ha)
No. 1
• Milk Production
No. 1
• Rice Production
No. 2
• Wheat Production
No. 2
• Rapeseed Production
No. 2
• Fruit Production
No. 2
• Tea Production
No. 2
• Sugar Production
No. 2
• Cotton Production
No. 2
• Coffee Production
No. 5
11
India’s Agriculture Production
India is well connected with cellular phone having 850 Million users and with the talk
time rate cheapest in the world
12
Indian Oilseed Sector
Demand - Supply
and
Import of Vegetable Oils
13
Oilseed Sector 2011-12
•
•
•
Area Under Oilseed Cultivation
Average yield
Output of 9 cultivated Oilseeds
•
Output of Cottonseed & Copra
26-27 Mn. Ha.
1100 Kgs.
30.1
Mn. T.
Total
•
•
Production of Vegetable Oils
Demand of Veg. Oils (Edible)
•
Import of Veg. Oil 2011-12 (Nov-Oct) (Edible)
•
Per capita consumption (2011)
•
Per capita consumption is rising by 3 to 4% per annum.
11.0
41.1
Mn. T.
Mn. T.
8.12
16 .7
Mn. T.
Mn.T.
9.4
Mn.T.(E)
13.5 Kg.
14
Oilseed Sector - Share of India
• Vegetable Oil Sector Turnover
US$ 23.0 bn.
(Rs.125,000Cr)
• Import & Export from Oilseed Sector
US$ 12.0 bn.
(Rs.65,000 Cr.)
2011-12
• In World's Oilseed Production
8.0 %
• In World's Oilmeal Production
6.8 %
• In World's Oilmeal Export
6.5 %
• In World's Production of Veg. Oils
5.2 %
• In World’s Vegetable Oil Import
13.6 %
• In World's Edible Oil Consumption
10.2 %
15
India’s Oilseeds & Veg. Oil Production
Qty in Mnt
Year
(Nov-Oct)
Oilseeds
Production
Availability of Veg. Oils
Edible
2011-12
2010-11
2009-10
2008-09
2007-08
2006-07
2005-06
2004-05
2003-04
2002-03
2001-02
Source : SEA
30.01(E)
31.10
24.88
27.72
29.76
24.29
27.98
24.35
25.18
14.84
20.66
7.34
7.92
7.26
7.71
7.75
7.33
7.56
7.16
7.21
4.84
6.37
NonEdible
0.78
0.60
0.51
0.50
0.49
0.43
0.47
0.43
0.38
0.28
0.35
Total
8.12
8.52
7.77
8.21
8.24
7.76
8.03
7.59
7.59
5.12
6.72
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World & India Production of
Oils & Fats 2011-12
Qty : Mn T
Other Oil & Fats
Palm Oil
Groundnut
Cottonseed
Sunflower Oil
Rapeseed
Oil
Soya Oil
WORLD
Oil & Fats
Palm Oil
Soya Oil
Rape Oil
Sun Oil
Cottonseed Oil
Groundnut Oil
Other Oils & Fats
World
51.49
41.72
23.64
14.63
5.13
4.03
42.26
India
0.07
1.61
1.92
0.22
1.17
0.46
2.67
TOTAL
182.90 8.12
Major Veg.Oils produced in India are Rapeseed Oil, Soybean oil, Cottonseed Oil, Rice
Bran Oil & Groundnut Oil
Source: World data from Oilworld 2012 & SEA Data Bank for India
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Per Capita (kg) Disappearance of Oils
and Fats in Selected Countries and World
Country
2011-12
2010-11
2009-10
2008-09
2007-08
2006-07
EU-27
59.4
60.3
61.6
60.0
57.4
56.4
U.S.A.
54.7
52.5
50.4
51.3
54.9
54.0
Argentina
92.1
77.7
63.0
46.4
35.7
24.8
China
25.1
24.5
23.8
22.9
21.8
21.3
India
14.8
14.5
14.3
13.9
12.5
12.1
Indonesia
33.4
29.7
25.6
23.5
21.9
19.8
Japan
21.5
21.4
21.5
20.8
22.2
22.3
Pakistan
21.5
21.5
21.7
21.6
21.5
21.3
Turkey
29.6
29.0
28.7
27.2
31.3
31.5
World
25.91
25.31
24.68
23.92
23.43
22.78
Number shown includes consumption of oils and fats for Bioenergy
Source : Oil World 2012
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India – WTO Bound Rates & Import Duty
Sept-2012
WTO
Bound
Rate
Duty on
Crude
Edible
Oils
Duty on
Refined
Edible
Oils
(23rd Oct 2012)
Soybean Oil
45%
Nil
7.5%
580
RBD Palmolein
300%
Nil
7.5%
893
RBD Palm Oil
300%
Nil
7.5%
476
Crude Palm Oil
300%
Nil
7.5%
447
Sunflower Oil
300%
Nil
7.5%
-
Rape/Mustard Oil
75%
Nil
7.5%
-
Item Description
Tariff
Value
US$/MT
 Import duty reduced to Nil on crude vegetable oils & 7.5% on refined oils
w.e.f. 1.4.2008. Import duty on refined oils is calculated on tariff Value
announced by the Govt. fortnightly
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Import Duty on Crude & Refined Palm Oil
Period
Crude Palm
Oil
Refined
Palm Oil
1994 (April)
-
65.0
2001 (Apr.)
75.0
92.2
2006 (28, Feb)
88.8
99.4
2008 (20, Mar.)
20.60
28.33
2012 (10, Oct.)
Nil
7.73%
20
Import & Export from Oilseed Sector
• Import of Edible Oils freely allowed
9.8Mnt(11-12)
(PalmOil:7.5mnt,SFO:1.0mnt, SBO:1.0mnt)
• Oilmeal Export freely allowed
5.5 mnt (11-12)
(Soybean Meal 4.0 Mnt, Rapeseed Meal 1.1 mnt)
• Oilseeds Export freely allowed
0.85Mnt (10-11)
(Seaseme Seed 0.4 Mnt, HPS Groundnut 0.42 Mnt)
21
Possibility of India adopting
the Chinese approach
• China is one of the large producers of oilseeds in the
world. However, the country has been substantially
importing the oilseeds rather than the edible oil to feed
its population.
• Heavy import of oilseeds rather than the edible oil by
China in comparison to India, logically favours the
vegetable oil crushing industries of China and provides
meal to meet the booming animal feed demand.
• Recently Indian Government reduced the duty on
Oilcake from 15% to nil to increase the supply of Feed
Ingredients and thereby to check the rising prices due to
Short Supply
22
Government of India’s Fiscal Incentive
for Oilseed Cultivation
MSP level for food grains were raised more than for
oilseeds since the mid-l990s. As a result, increasingly
favourable returns from rice and wheat have drawn
area away from oilseeds, lowering oilseed production.
Since 1998-99, however, the MSP of the major edible
oilseeds have been moving upward more decisively,
intending to lure the growers towards the oilseed
crops.
23
MinimumSupport Price (MSP)
of Agricultural Commodities
% Change
Commodity
2001-02
2005-06
2008-09
2012-13
In last
Twelve Years
Grain
Wheat
620
650
1080
1285
665 (107%)
Paddy
530
570
850
1250
720 (136%)
Maize
485
540
840
1175
690 (142%)
Oilseeds
Soybean Yellow
885
1010
1390
2240
1355 (153%)
Groundnut in shell
1340
1520
2100
3700
2360 (176%)
Rapeseed/Mustard
1300
1715
1830
2500
1200 (92%)
Sunflower seed
1185
1500
2215
3700
2515 (212%)
Sesamum
1400
1550
2750
4200
2800 (200%)
Safflower
1300
1565
1650
2500
1200 (92%)
24
Consumption
25
Consumption of various oils in India in
2011-12
Qty: in MnT
Oils
Domestic
Import
Total
%
Palm Oil
0.07
7.50
7.57
46.0
Soybean Oil
1.65
1.01
2.66
16.2
Rapeseed Oil
1.74
0.09
1.83
11.1
Sunflower Oil
0.22
1.08
1.30
7.9
Cottonseed Oil
1.19
-
1.19
7.2
Rice Bran Oil
0.85
-
0.85
5.2
Groundnut Oil
0.39
-
0.39
2.4
Other
0.65
-
0.65
4.0
TOTAL
6.75
9.67
16.42
100
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Consumption & Characteristics of Indian Consumer
• Major Oil consumed in India - Palm, Soya & Rape
• Lower & Middle Class Price Sensitive
• Palm Oil preferred Oil being cheapest
• Vegetable Oil Demand quite Elastic and switchable
27
Consumption Of Edible Oils In India
Consumption in Mnt
15.7
16.8
17.44
18.08
19
19.65
20.48
21.28
22.27
23.1
Demand Scenario upto 2020
Due to high growth in income levels, increasing trend in spending & better
living standards; India promises to continue high growth in consumption of
edible oils and consumption may reach 23 ml T by 2020 @ 3% growth rate.
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Import of Vegetable Oils
by India
29
Import of Vegetable Oils
Edible, Vanaspati & Non-edible
2006-07 To 2010-11 (Nov – Oct)
(Qty in Mn T)
2010-11
2009-10
2008-09
2007-08
2006-07
Edible Oils
8.37
8.82
8.18
5.61
4.71
Vanaspati
--
--
0.02
0.05
0.25
Non-edible
0.29
0.42
0.46
0.65
0.63
Total
8.66
9.24
8.66
6.31
5.59
Vegetable Oils
(Hydrogenated Fat)
Import of Veg Oils is rising from year to year to bridge
the demand and supply gap
Source : SEA
30
Import of Palm Oil by India
Qty in ‘000 Tonnes
Countries
Indonesia
Malaysia
Singapore
Thailand
Others
Total
Jan/Dec
2011
5010
1677
49
6744
Jan/Dec
2010
5435
1189
2
21
1
6648
Jan/Dec
2009
5255
1541
2
28
1
6827
Source: Oil World
31
Import of Sunflower Oil by India
Qty in ‘000 Tonnes
Countries
Russia
Ukraine
USA
Argentina
Others
Total
Jan/Dec
2011
10
817
43
1
871
Jan/Dec
2010
26
588
11
37
1
663
Jan/Dec
2009
56
503
83
1
643
Source: Oil World
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Import of Soybean Oil by India
Qty in ‘000 Tonnes
Countries
USA
Argentina
Brazil
Paraguay
Thailand
Others
Total
Jan/Dec
2011
746
144
36
8
6.8
941
Jan/Dec
2010
161
1284
78
45
1568
Jan/Dec
2009
146
693
202
65
1
1107
Source: Oil World
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India’s Vegetable Oil Production & Imports
Figures in Mln.Tn
8.64
9.24
8.21
7.77
8.66
9.6
8.52
8.12
6.26
5.45
5.09
5.34
4.63
4.76
5.39
7.59
6.72
5.75
5.13
5.12
8.03
7.59
7.76
8.24
Import
Domestic
Production
Stagnant Domestic oil production is leading to higher imports
YOY to feed the growing Indian demand.
34
India's Growing Dependence on Imports
62%
59%
53%
49%
58% 61% 59% 57%
57%
49%
50%
46%
In last 4 years, Import dependence has increased much more due to rising
consumption and stagnant domestic production.
35
Major Constrains in Domestic
Production of Oilseeds
• Low Productivity
• Small farm sizes
• Lack of varietal replacement
• Shifting of acreage from Oilseed to other crops
• Losses due to pests and diseases
• Vagaries of nature
36
What are the Prospects for
Indigenous Supplies of Oils in India ?
• Oilseed output targeted by 4% per year
• Vegetable Oil Production increase – 350/400Thousand per year
• Demand to rise Faster
• Oil Palm yet to pick up
37
India has a Promising Demand Growth
Demand drivers in India
•
Consistent GDP growth rate at or above 8 % in last 5 years (But
current year it may be below 7%).
•
The big emerging Indian middle class.
•
Urbanisation
•
Nucleus Family
•
Change in Food Habits
•
The double digit growth of out of home consumption of edible oils.
•
Per capita consumption of Edible oils in India at 14.0 kg (2012) which
is still a lot below threshold level of consumption.
•
Even with a moderate population growth the absolute increase in
number of people is quiet High.
38
India has a Promising Demand Growth
Governments Support
• Scheme like NREGA (National Rural Employment Guarantee
Act) and rising labor income is increasing the income level of
people who are consuming much below the all India level.
• Supply of edible oils , mainly palm oil, by the Government at
subsidized rates under PDS .
• Duty Free-Regime: Zero percent duty on crude imports has
facilitated lower oil price to consumers and in turn push
demand.
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India’s
Short Term & Long Term
Demand Projection
40
Import of Edible Oils by India
Current year and next year
Oils
2011-12
Nov.’11 to
Nov.’11 to
Sep’12
Oct.’12
(Actual)
(Estimate)
Qty: ‘000 Tonnes
2012-13
Projection
RBD Palmoein
1515
1600
1200
Crude Palm Oil
5225
5700
6300
987
1100
1100
1049
1100
1100
Rape (Canola) Oil
91
100
100
Others
96
100
100
8963
9700
9900
Crude Soybean Oil
Crude Sunflower Oil
Total
India also Imports about 200,000 tonnes of Non-Edible Oil for Industrial Purpose
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India’s Population & Consumption of Edible Oils
2012-2020
Year
Population
@1.76%
Growth
Consumption
@ 3% Growth
In Bn
Per
Capita
Kgs
2012
1.20
2013
Consumption
@ 4% Growth
Mn. T
Per
Capita
Kgs
13.9
16.68
1.22
14.3
2014
1.23
2015
Consumption
@ 5% Growth
Mn. T
Per
Capita
Kgs
Mn. T
13.9
16.68
13.9
16.68
17.44
14.4
17.56
14.5
17.69
14.7
18.08
15.0
18.45
15.2
18.69
1.25
15.2
19.00
15.6
19.5
15.9
19.87
2016
1.26
15.6
19.65
16.2
20.41
16.6
20.91
2017
1.28
16.0
20.48
16.8
21.50
17.4
22.27
2018
1.29
16.5
21.28
17.4
22.44
18.2
23.47
2019
1.31
17.0
22.27
18.0
23.58
19.1
25.02
2020
1.32
17.5
23.10
18.72
24.71
20.0
26.4
Source : SEA
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Edible Oil Demand and Import Projection
Short & Long Term
Parameter
2012
2015
2020*
Population (in Bn)
1.20
1.25
1.32
Total Demand (MnT)
16.68
19.0
23.10
Domestic Supply (MnT)
7.3
8.0
9.2
Import (Mn T)
9.4
11.0
13.9+
Import as % Share of
Demand
56%
57%
61%
* Based on 3% Growth
(Excluding Non-edible Oils)
43
Conclusion
India will continue to be large importer of Veg. oil because domestic
output growth is unlikely to catch up with demand growth.
Strong GDP growth contributed mainly by Manufacturing and Service
sectorsand also rising population automatically translates to higher
demand for a host of food products including edible oil.
How much of this incremental import demand of veg. oil particularly
Palm Oil will be able to garner, would of course, depend on relative
prices of various oils, tariff structure, landed cost & Domestic Supply.
It would be in vegetable oil producers' interest to look at India as a
large market that is going to be available for a very long-term – for
long years - and do all that is required to sustain and service it.
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Dr. B. V. Mehta
Executive Director
The Solvent Extractors’ Association of India
A Premier Association of Vegetable Oil Industry & Trade in India
ISO 9001:2008 Organisation
142, Jolly Maker Chambers No. II, 14th Floor, 225, Nariman Point, Mumbai 400 021
Tel: (+91-22) 2202 1475. 2282 2979, Fax.: (+91-22) 2202 1692
Email: [email protected] , Website:www.seaofindia.com
File :CIOC 2012// Word// Presentations
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