The global edible is estimated to grow at a CAGR of 3.57% from a market value of USD96.878 billion in 2019 to attain a market value of USD119.571 billion by the end of 2025.According to the OECD-FAO Agricultural Outlook 2019-2028 statistics, it is estimated that the per capita vegetable oil consumption is predicted to grow by 0.9% per annum. This is comparatively lower than the 2.0% per annum growth observed during the time period 2009-2018. Developing regions of the world are predicted to contribute to increasing the market growth for vegetable oil during the forecast period. In China, the consumption of vegetable oil is predicted to be around 30 kg per capita, and for Brazil, it is estimated to be around 24 kg per capita. For developing nations, the per capita consumption of vegetable oil is assumed to reach 27 kg with a growth rate of 0.4% per annum. After China, India is the second-largest consumer and is ranked as the number one importer of vegetable oil at the international level. The country is projected to maintain the high per capita vegetable oil consumption with a growth rate of 3.1% per annum. It is further projected to achieve 15 kg per capita consumption by the end of 2028. The substantial growth is attributed to the expanding domestic production in the country and growth of imports specifically palm oil from Indonesia and Malaysia. For the Least Developed Countries (LDCs), the per capita availability of edible oil is projected to surge by 1.2 per annum and is further estimated to attain 10 kg per capita in 2028. The utilization of vegetable oil for biodiesel production will however remain unchanged for the next ten years which was recorded as 8.5% per annum growth for the past 10 years when biofuel support policies were starting to apply.
The global production of vegetable oil is dependent on the crushing of oilseeds and the production of perennial tropical oil plants, particularly, palm oil. It is noticed that the global palm oil production has exceeded the production of other edible oils in the last ten years. It is further projected that this production rate is going to decline over the forecast period. Maximum palm oil production is concentrated in Malaysia and Indonesia, together accounting for over one-third of the total vegetable oil production in the world. The production is projected to increase by 1.8% per annum over the forecast period in Indonesia, which is very less in comparison to 6.9% per annum in the last decade. The slow growth is attributed to the surging strict environmental policies from the major importers of palm oil, in addition to the sustainable agricultural norms. Hence, with this, the expansion of the palm oil area is predicted to be slowed down in Malaysia and Indonesia. It is further analyzed that in order to enhance the growth of palm oil production, certain productivity improvements are required, which include the escalation of replanting activities in these regions.
In the other regions of the world, palm oil production is projected to grow at a fast pace from a lower base mainly for utilization in the local and regional markets. For instance, in Thailand the palm oil production is assumed to be around 2.9 Mt by the end 2028, in Colombia, the production is expected to reach 2.0 Mt by the end of 2028, and in Nigeria, the production is projected to achieve a size of 1.2 Mt. by 2028. At the international level, the palm oil supply is estimated to grow at an annual growth rate of 1.8% over the time period 2019-2028 (source: OECD-FAO).
Due to the current novel coronavirus infection outbreak, the edible oil refineries have experienced a downfall in their operating capacity to around 50%. This is mainly attributed to the deficiency of raw materials along with delays in the import clearance. The decrease in the operating capacity is also related to the lockdown measures that resulted in the delayed harvesting of certain oilseeds, for instance, mustard seeds in India.
However, with due precautions and in order to satiate the essential need of edible oil for cooking purposes in households, manufacturing units are operating with around 40-50% of their installed capacity at present.
As per the FSSAI, restrictions have been imposed on the reuse of cooking oil in restaurants, hence, this will further augment the product sales with the increase in demand for utilization of fresh oil, further propelling the market growth during the forecast period.
The Food Safety and Standards Authority of India, FSSAI imposed a new rule, with effect from July 2019, for all the food business operators consuming over 50 liters of edible oil for frying purposes. The new rule has been brought into action according to the Section 16 (5) of the Food Safety and Standards Act, 2006. It is required that all the food business operators must maintain a record of the repeated utilization of cooking oil and discard the used cooking oil to agencies authorized by the FSSAI. This is because of the fact that the repeated use and frying of cooking oils result in the formation of Total Polar Compound (TPC) which renders the edible oil unfit for human consumption. It has further been assessed that due to reheating, the nutritional and physicochemical properties of edible oils are affected rigorously. Hence, this has raised health concerns due to serious health hazards caused by the usage of reheated edible oil in restaurants.
The government has introduced a new set of laws for monitoring the utilization of cooking oil and has set the maximum permissible limit of TPC in cooking oil at 25%. Additionally, FSSAI has recruited the Indian Biodiesel Association for creating a nationwide eco-system to gather the utilized cooking oil and convert it into bio-diesel. All the food service restaurant operators are required to comply with the approved regulations. Also, the FSSAI has designed testing protocols for the testing of cooking oil reuse.
In terms of implementing the cooking oil standards, the FSSAI has launched a “Triple E Strategy”. The triple E in the strategy stands for Education, Empowerment, and Eco-system. Hence, with this, it is expected that the strategy will be helpful in providing education to all the food businesses and consumers regarding the health consequences of the reused cooking oil and this will further contribute to collecting the used cooking oil and directing it towards the efficient production of bio-diesel.