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 Mahamad Rodzi Abdul Ghani
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 Indian edible oils market due for efficiency refor

Chemical Business NewsBase 11/30/2002 - The Indian edible oil industry,which produces oil from groundnut, rapeseed, sesame seed, castor seed,sunflower, etc will witness major reforms in the near future. Indiautilizes nearly 28.4 M hectares of land for the production of a number ofcommercial varieties of oil seeds. The Technology Mission on Oil Seeds setup by the Government of India in 1996 adopted certain strategies toincrease oil seeds and oil production, which increased oil seed productionto about 23.7 M tonnes in 1997-1998 to cater to Rup 400 bn oil seedsmarket. Although India accounts only for 9.3% of world's oil production,today it is the largest producer of castor seed and the third largestproducer of rapeseed and cottonseed.The industry expects the high import duty of 40% on oil seeds to bereduced to 5%. With 15,000 crushing units and 400 crude edible oilrefining units, of which 60-70% are small, the installed capacity of oilmills is about 36 M tonnes/y, thereby making India as the fourth largestedible oil economy. In spite of considerable installed capacity, thecapacity utilisation is only 40% (solvent extraction units operating at33% and vegetable oil refineries operating at 40% capacity).Production of edible oil in India has increased to 7 M tonnes in1997-1998. Refined oil accounts for nearly 2 M tonnes out of the total oilconsumption of 9 M tonnes. Edible oil consumption is increasing at about5-6%. India imports 43% of edible oil and during 1997-1998 imports haveincreased to 2.1 M tonnes. With the introduction of differential dutystructure in Dec 1999, duty on refined oil was fixed at 27.5% (25% plus10% surcharge) and that on crude oil was 16.5% (15% plus 10% surcharge).The Rup 11.65 bn refined edible oil trader and manufacturer Adani Wilmarbased in Ahmedabad is the largest edible oil refinery in India with arefining capacity of 800 tonnes/day. The refinery produces 100 tonnes/dayof vanaspati at Mundra Port involving an expenditure of Rup 1 bn. Therefinery, which refines all kinds edible oils imports crude oil forrefining from local (Gujarat, Rajasthan and Madhya Pradesh) andinternational (Indonesia, Malaysia, Brazil, Argentina, Canada, and the US)markets.