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Agri-sector in India: A focus on Edible Oils

Agri-sector in India: A focus on Edible Oils. SEA: A key player in Global Agri. SEA has major involvement in and impact on: Farming and agriculture sector and related research Land use and environment Employment and Skills development Technical sector and related research

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Agri-sector in India: A focus on Edible Oils

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  1. Agri-sector in India: A focus on Edible Oils

  2. SEA: A key player in Global Agri • SEA has major involvement in and impact on: • Farming and agriculture sector and related research • Land use and environment • Employment and Skills development • Technical sector and related research • Food, nutrition and public health • Supply chain, trading and related infrastructure • Trade finance and related banking

  3. World of Commodities Agri - Produce Value of Hard & Soft Commodities in 2013 (in US$ Bn.) Minerals & Metals

  4. Composition of Global Agri Sector: Top 10 % to total value 14% 13% 12% 11% 11% Top 10 contribute 90% of the total value of agri-commodities 9% 7% 7% 3% 3%

  5. Leading Agri-Commodity Producers and Exporters Leading Agri-Commodity Producers in the World • The leading agri-commodity producers in the world are US, India, China, Russia, Brazil • China is the leading worldwide producer of rice and wheat, number two in corn. • United states is the leading producer of Corn and Soybean • India leads world production in Millets, Spices, Pulses and Dairy. USA Leading Agri-Commodity Exporters in the World • USA, Germany, Brazil are the world leaders in staples. • Netherlands ranks on the list due to its presence in high value flowers and live plants (It supplies 2/3rd of the global total) and vegetables. • Major agri-exports from France are Dairy Products and Cereals (Wheat & Barley) Export Value (in Bn. USD) Source: http://www.investopedia.com (Year – 2013)

  6. Size of Agri Sector by Major Countries Agri Value (in Bn. US$) & % Share of Agri Sector in GDP Source: World bank data and CIA World fact book

  7. Working Population in Agri by Major Countries % of Working Population engaged in Agri Sector Source: cia.gov/worldfactbook (Year – 2012)

  8. Land Used in Agri Sector by Major Countries Land used in Agri Sector (in 000s Sq. km) Source: CIA World Fact book

  9. Agri Land as % to Total Land Area by Major Countries Agri Land as a % to Total Land Area Source: CIA World Fact book

  10. Forest Cover by Major Countries Forest Cover as % to Total Land Area • Source: CIA fact book

  11. Agri-commodity sector in India • Some Facts to consider: • Agriculture is the principal means of livelihood for over 58%of India's population • India ranked within the world's five largest producers of over 80% of agricultural produce items, including many cash crops, livestock, meat and poultry. • Share of agriculture in India’s exports is ~ 13% Land Composition in India (%) • Arable Land: 49% • Permanent Crops: 3% Source: http://eands.dacnet.nic.in/ (Year - 2011)

  12. Major agri-commodities in India

  13. India’s ranking in Global agri-commodity sector Spices • Rank 1 - Cumin, Chilli Pepper, Ginger, Turmeric • Rank 2 - Pepper Cereals and Dairy Rank 1 – Millet and Dairy • Rank 2 - Rice, Wheat, Sorghum Vegetable • Rank 1 - Dry bean, Chick peas, Pulses • Rank 2 - Onion, Garlic, Cabbage, Cauliflower, Brinjal, Potato Fruits • Rank 1 - Banana, Mango, Papaya • Rank 2 - Sugar cane, Lemon Fibers • Rank 2 - Cotton, Silk, Jute Source: http://en.wikipedia.org/wiki/List_of_largest_producing_countries_of_agricultural_commodities (FAOSTAT)

  14. Land use split in India for Agriculture W W W C J J G SF J Co Co C Rice C Co Cotton W Wheat J Jute SF Co Maize G Sugarcane SF Bajra SF Sun Flower Oil Groundnut Oil G Jute Coffee G C Cereals

  15. Trend of Global Edible Oil Production Global Edible Oil production has jumped by 25% over the last six years with Palm Oil leading the group at 36% cumulative increase Source: USDA August WASDE Figures

  16. Trend of Global Edible Oil Usage Global Edible Oil Usage (in 000s MT) Edible Oil is still mainly used as food (> 80%), but industrial and biofuel use has been increasing over the past 10 years Source: http://bioenergytrade.org/downloads/vegetableoilstudyfinaljune18.pdf

  17. Edible Oil in India – Production & Share Trend of Edible Oil Production in India (in Mil MT) Edible Oils Indian Production (in Mil MT) In Million MT • Edible Oil production in India has increased at a CAGR of 2.6% over past six years led by growth in Soybean Oil (3.4%) and Rapeseed Oil (3.8%)

  18. India’s Imports of Edible Oil Trend of Edible Oil imports into India (in 000s MT) Trend of Edible Oil imports into India (in 000s MT) – Oil Wise Crude Palm Oil Source: http://seaofindia.com/cdn/gallery/1392.pdf

  19. Trend of FOB Prices - Palm Vs. Other Agri-Commodities Demand for food staples is relatively constant (which is reflected in the stable price trend) & incremental demand can be attributed only population growth, while demand drivers for Palm & other edible oils come from population growth, increase in disposable income, demand for industrial uses

  20. Per Capita Edible Oil Consumption Per Capita Edible Oil Consumption 2011-12 (in kg / annum) Source: http://lipidlibrary.aocs.org/market/countries.htm

  21. Oils & Fats consumption and Health • Healthy diet requires 15-30% daily calories from Fat. Inadequate Fats in diet lead to inadequate absorption of vitamins A, D, E and K. • Oils and Fats deficient diet results in skin problems such as dry, scaly rash and increases the lead time for the wounds to heal • Cognitive problems: Omega-3 fatty acids DHA are essential for brain development. Not getting enough DHA leads to risk of learning disabilities and increase the risk of Dementia, including Alzheimer’s disease.

  22. How much should Edible Oil Consumption be for India to be an healthy nation? • Although, India is a major producer of oilseeds, per capita edible oil consumption in India is only 14 kg / annumwhich is low compared to 21.6 kg / annum in China, 20.8 kg / annum in Japan, 21.3 kg / annum in Brazil and 40 kg / annum in USA • For healthy consumption, India should be consuming upwards of 25 Million MT • Broadly, there is a gap of 8 - 10 Mil MT of edible oils today which need to be bridged for the nation to be well and healthily fed

  23. Action points for India’s Edible Oil sector • Key pointers for India’s Edible Oil sector • Increase productivity (policy and private action) • Increase edible oil consumption (aim to educate policy makers) • Give up marginal agri-lands– leave it for reforestation projects and find jobs for the people released from this (making a pitch to policy makers) • Have trade relations with major oil producers such as Indonesia, Malaysia, Latam, US, EU, Eastern Europe • Look at what Africa could mean for long term edible oil supply security for India like how China is doing and how Indian power sector is doing

  24. Demand Projections of Edible Oils in India • Middle Class population, major consumers of Edible Oil, is expected to touch 1 Billion over the next 2 decades. Higher economic growth and concomitant rise in incomes, coupled with change in tastes and preferences in both urban and rural areas are expected to increase the demand for Edible Oils Source: Strategy Paper presented by R.S. Paroda (Chairman - TAAS & Haryana Farmers Commission

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