India palm oil market size is anticipated to reach USD 13.1 billion by 2025, according to a new report by Grand View Research, Inc. Refined derivatives are widely being utilized in food owing to their lower price in comparison to other conventional edible oils derived from groundnut, soybean and sunflower.
Influenced Consumer Trends
Rapid urbanization, and changing lifestyles backed by increasing disposable income in India have influenced consumption trends of consumers. Increasing consumption in food & beverages and cosmetics industry is a key factor likely to boost overall growth. A positive factor in the Indian production scenario is a significant growth in the acreage, which registered a CAGR of approximately 20% over the past five years.
Improving yield coupled with reducing wastage during production by has created improved business environment in India. In order to encourage domestic cultivation, the government provides subsidies of up to INR 7,000 per hectare for farmers. Furthermore, to ease capital inflows, the government also allowed 100% FDI through automatic route.
Increasing Demand for Commercial Products
The lubricants segment is anticipated to exhibit steady growth owing to increasing demand for numerous commercial and industrial products including detergents, soaps, shampoos and cleaners.
Further Key Findings from the Study Suggest:
- From 2016 to 2025, CPO is projected to register growth rates above 8%, which can be attributed to lowered import duties. CPO import volume was nearly 6.50 million tons in 2014.
- Indonesia and Malaysia accounted for approximately 90% of the imports in 2015. Kandla, Krishnapatanam, Kolkata, Kakinada, Mangalore and Nhava Sheva were the leading ports of entry from 2014 to 2016.
- Export taxes of CPO in Indonesia and Malaysia range from 7.5%-22.5% and 4.5%-8.5% respectively. These countries use futures exchange (Bursa Malaysia), FOB quotes, and CIF prices as benchmarks.
- Edible oil applications accounted for nearly 95% of the consumption volume in 2015. The segment growth is further expected to be driven by high demand from processed foods, fast food chains, and households.
- As of 2015, fresh fruit bunch (FFB) produced was 1.18 million tons while oil extraction rate stood at 17%. Improving extraction rates is paramount for domestic producers.
- Increasing acreage is critical for sustainability of the domestic industry. As of 2015, the potential cultivation area identified stood at 1.93 million hectares while only 0.2 million hectares were planted.
Key companies operating in this market include Ruchi Soya Industries, Kamani, Acalmar Oils & Fats, AdaniWilmar, Anik Industries, Aditya Engineers, Sundex Process Engineers Pvt. Ltd., Brissun Technology Pvt. Ltd. and Cargill India.