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The Growing Demand for Palm Oil in India
With the world’s second largest population of 1.2 billion and its oils and fats consumption estimated at 17.8 million tonnes in 2010, India becomes one of the world’s leading oils and fats economies. India is one of the largest producers of oilseeds in the world, both in terms of the area and output. However, India is the third world’s leading importer of oils and fats in 2010.
India’s oils and fats production have not been able to keep pace with the large demand in the country. Estimates indicate that while the oils and fats output grew at about two percent per annum over the past four years, consumption has grown at some seven percent per annum; hence import of oils and fats is necessary to fill the gap between production and consumption. The total consumption of oils and fats for 2010 was 17.8 million tonnes while local production was only able to cater 9.0 million tonnes.
Palm Oil – Continue to be Major Importing Oil by India
Palm oil has been the major imported oil by India which has become the world’s largest importer of palm oil. In 2010, a total of 6.58 million tonnes of palm oil were imported and it constituted about 70% of India’s total imports. Most of the palm oil imported into India is in the form of crude palm oil. The main two exporters of palm oil to India are Malaysia and Indonesia with Indonesia having the market share of 80% approximately.
The large market share of palm oil in India’s oils and fats imports is driven by several few factors. First, India is a price-sensitive market and therefore, the low price compared to other oils makes it attractive. Similarly sunflower oil (SFO) is consistently sold at higher prices in the domestic market compared to RBD Palm Olein.
India’s proximity to Malaysia and Indonesia ensures easy accessibility, quick and reliable supply and lower freight, insurance and

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