SAARC OILS & FATS Today March 2013
SAARC OILS & FATS Today March 2013
SAARC OILS & FATS Today March 2013
SAARC OILS & FATS Today March 2013
Contents Chief EDITOR S. Jafar Naqvi Consulting Editors T.V. Satyanarayanan K Dharmarajan Editorial Co-ordinator: Syed M K News Editor : Anwar Huda General Manager: Lalitha V Rajan Production: Mohd. Iqbal Hyderabad 9248669027 email@example.com Mumbai 9702903993 firstname.lastname@example.org Bangalore 9342185915 email@example.com Pune 9881137397 firstname.lastname@example.org Ahmedabad 9727866249 ADMN. & MARKETING OFFICE MEDIA TODAY PVT. LTD. T-30, 1st Fl., KHIRKI EXTN., MALVIYA NAGAR, NEW DELHI - 110017. PHONE : 91-11-26681671, 26682045 TELEFAX : 91-11-26681671 E-mail: MediaTodayMails@gmail.com ANNUAL SUBSCRIPTION India: Rs.1000/-for 1 Year / Rs.1950/-for 2 Years Overseas: US$ 120 for 1 Year / US$ 230 for 2 Years Single Copy Cost in India : Rs. 60.00 Printed, Published & Owned by M.B. Naqvi, Printed at Everest Press, E-49/8, Okhla Industrial Area, Ph-II, New Delhi -110 020 and published from E-11/47 -A, New Colony, Hauz Rani, Malviya Nagar, New Delhi-110017 (India) Editor : S. Jafar Naqvi Vol. 15..... ISSUE 6..... March 2013 ‘Saarc Oils & Fats Today’ T-30, Ist Floor, Khirki Extn., Malviya Nagar, New Delhi - 110017 E-mail : MediaTodayMails@gmail.com
SAARC OILS & FATS Today March 2013
v Rapeseed SEA Survey Mustard Scenario: RECORD CROP & ITS IMPACT
v EDIBLE oils Indian Edible Oils Demand: Now & Later — Govindbhai G. Patel
v Soya foods Emerging Technology Trends and Future of Soya Foods in India — Dr. S. D. Kulkarni
v cover story 12th Five Year Plan Working Group Report wants Development of Feed Sector
v interview India Needs Technological Upgradation in Feed Milling ...Dr. Dinesh T. Bhosale
v guest column Shortsighted Trade Policies Hurting Production of Edible Oils and Protein: The Way Forward — Vijay Sardana
Pre event GrainTech India 2013 & Int’l Poultry & Livestock Expo 2013 Indian Livestock Feed Sector Booming! Golden Opportunities for Feed Milling Players
v union Budget 2013-14 SINKING OR SWIMMING? Fills Oil - Box with Mixed Reactions
v l l l
industry viewpoints on budget No Relief on Import Duty Structure — Dinesh Shahra
Oilseeds & Vegetable Oil Industry Disappointed — Vijay Data
Commodity Players’ Interest Ignored — Kishore Narne
v coconut Health and Nutritional Benefits from Coconut Oil and its Advantages Over Competing Oils — Mary G. Enig v News
Edit orial W
ith a higher allocation of Rs. 27,049 crore to the Ministry of Agriculture, marking an increase of 22 per cent over the revised estimates for the current fiscal, the Union Budget for 2013-14, presented by Finance Minister P Chidambaram in Lok Sabha, gives enough indication that there is greater seriousness at the top policy-making level in taking the country’s Green Revolution on a new path so as to raise crop productivity and widen the food basket. Outlays have been raised for a few specific schemes and new ones announced in a bid to meet the objectives. While the budget proposals have by and large drawn good comments, some omissions have also been noted. For instance, no new scheme or programme has been announced to give a fillip to the oilseeds sector, despite the rising import of edible oils; but the consolation is that the outlay for the Integrated Scheme of Oilseeds, Pulses, Oil Palm, and Maize gets a marginal increase – Rs. 200 crore against Rs. 175 crore (revised estimates) in 2012-13. Again, contrary to expectations, no new initiative is evident to give a fillip to farm mechanization, a programme so important at a time when the agriculturists are facing acute shortage of farm labour. A piece of good news for the domestic oil industry is the Finance Minister’s gesture of removing the existing 10 per cent duty on de-oiled rice bran. Although India exports only about 200,000 tonnes of de-oiled rice bran worth Rs.175-200 crore, the move will make the export more competitive in the international market. Another point of interest to the domestic oil industry is a significant policy observation made in the pre-budget Economic Survey for 2012-13 while dealing with edible oil supply and demand. The survey notes that one instrument for promoting future domestic production of oilseeds and oils is the calibration of import duty structure. It is time, the survey says, to frame a price brand for edible oils in a manner that harmonizes the interests of domestic farmers, processors and consumers through imposition of import duty at an appropriate rate. The import duty would also generate greater revenue which could be utilized for an oilseeds development programme. For the improvement of coconut productivity, the budget seeks to extend the pilot programme to replant
and rejuvenate coconut gardens to cover the entire Kerala. A close look at the budget proposals for agriculture in general would show that the schemes and programmes benefiting from a larger allocation to this sector include farm research, crop diversification, watershed management, livestock development and marketing linkages Agriculture research, which is playing a crucial role in raising production and productivity to greater heights, has been provided Rs. 3415 crore. Encouraged by the successful launch of the Green Revolution in eastern states, the Finance Minister has kept the allocation of Rs. 1000 crore in the current fiscal unchanged for 2013-14, so as to continue the programme vigorously in these states, particularly Assam, Bihar, Chhattisgarh and West Bengal, which have made notable contribution to rice production. A programme of crop diversification has been initiated with Rs. 500 crore earmarked for it, with an avowed objective of promoting technological innovation and encouraging farmers to choose crop alternatives in the traditional green revolution states that are now facing the problem of stagnating yields and over-exploitation of water resources. Another new programme in this budget is the launch of a National Livestock Mission, for which Rs. 307 crore has been set apart. A sub-mission would focus on increasing the availability of feed and fodder. Two other innovative schemes are the establishment of Nutri Farms and a National Institute of Biotic Stress Management for addressing plant protection issues. Rs. 200 crore has been provided for starting pilot Nutri Farms, which would strive to introduce new crop varieties that are rich in micro- nutrients such as ironrich bajra, protein-rich maize and zinc- rich wheat. These farms, suggested by eminent farm experts, are expected to help fight malnutrition in the worst-affected districts. The Institute of Biotic Stress Management, to be set up at Raipur, Chhattisgarh, is expected to serve as a centre of excellence in agricultural bio-technology. The Finance Minister is hopeful that all these schemes and programmes would help achieve a higher growth rate in agriculture, targeted at 4 per cent in the 12th Plan.
Comments are welcome at: MediaTodayMails@gmail.com Views expressed by individuals and contributors in the magazine are their own and do not necessarily represent the views of “SAARC Oils & Fats Today” editorial board. The magazine does not accept any responsibility of any direct, indirect or consequential damage caused to any party due to views expressed by any one or more persons in the trade. All disputes are to be referred to Delhi Jurisdiction only. .....Editor
SAARC OILS & FATS Today March 2013
SEA Survey Mustard Scenario
Record Crop & Its Impact
apeseed-mustard crop output in this rabi season is expected to go up by 20 per cent to 71 lakh tonnes against 59 lakh tonnes estimated in March last year on the back of better yield and favourable climatic conditions, according to the Solvent Extractors Association survey. Area under rapeseed/mustard has dropped marginally to 64 lakh hectares against an earlier estimate of 66 lakh hectares. The yield per hectare is expected to go up by 24 per cent to 1,103 kg a hectare against last estimate of 893 kg. The SEA survey was conducted in major rapeseed-mustard growing regions in Gujarat, Rajasthan, Haryana, Uttar Pradesh and Madhya Pradesh. B.V. Mehta, Executive Director, SEA, said the crop may be delayed by 15-20 days due to late sowing and high temperature during the season beginning. The good sub-soil moisture at the
SAARC OILS & FATS Today March 2013
time of sowing and showers in January and February and favourable weather have helped farmers to better their yield, he said. Besides, the estimates are based on current weather condition and expectation that the prevalent cold temperature will continue for two to three weeks, he added. The yield and overall production may be impacted if the temperature rises in next few days. While association has maintained Government record on area, it has made adjustment on yield to reflect the correct production of rapeseed/ mustard, he said. NEW VARIETY The association has been involved in various programmes to increase productivity of different oilseeds, including rapeseed/mustard. At the beginning of rabi season, the association procured seeds of high yielding Gujarat mustard-3 variety (GM-3). It was distributed to progressive farmers in
Gujarat, Rajasthan, Madhya Pradesh and Maharashtra for evaluation purpose. A study has found that the GM-3 yield increased by 30-50 per cent in comparison with yield of conventional variety grown in the same farms. If this variety is abundantly made available and propagated, it will not be difficult to achieve the target of 100 lakh tonnes of rapeseed mustard in the next three-five years, said Mehta. Follwoing are the extracts from the crop survey report Rapeseed-Mustard Crop Survey-2012-13 To assess Rapeseed-Mustard crop during the current rabi season, SEAâ€™s 6 Survey Teams consisting of about 50 members extensively toured the major districts growing Rapeseed-Mustard in Gujarat, Rajasthan, Haryana, U.P. & M.P. during 6th-9th February, 2013 & visited a large number of mandis in these States, had number of meetings with traders, commission agents & farmers at mandis
rapeseed and carried out number of field visits to understand the ground reality of RapeMustard crop situation. The overall area under rape-mustard has increased by 1.85 lakh hectares to 67.17 lakh hectares while the production is expected to jump by 12.32 lakh tonnes to 71.12 lakh tonnes. SEA compliments Rapeseed-Mustard Promotion Council headed by D.P. Khandelia, Chairman & S.K. Shukla, Co-Chairman for undertaking the herculean task to assess Rapeseed-mustard crop size. The estimate is based on the weather conditions during the survey period, however, there are now some reports about severe cold weather and hail¬storms in some parts of Rajasthan which might have damaged some of the standing crops. Also, there are some favourable showers which should help standing crops. We have asked the members of the Survey team to assess the damage if any, so that we can revise our estimate in the next few days. The final report will be presented by SEA at the next COOIT Rabi Seminar to be held on 17th March, 2013 at Agra.
greatly help us to evaluate and promote GM-3 variety in the next season in a big way. If the seed of this variety is abundantly made available and
propagated, it will not be difficult to achieve the target of 100 lakh tonnes of Rapeseed Mustard in the next three to five years, as happened in BT Cotton in last one decade.
Promotion of Gujarat-Mustard 3 (GM-3) Variety As members are aware, SEA is involved in various programmes for increasing the productivity of different oilseeds, including Rapeseed. Gujarat Mustard-3 variety (GM-3) is a very promising high yielding variety. In the beginning of rabi season, the Association had procured this mustard seed variety from Gujarat Seeds Corporation Ltd. and distributed free to the progressive farmers through the members – solvent extraction plants, across Gujarat, Rajasthan, Madhya Pradesh and also in Maharashtra and had requested to grow it on a small portion in their farm as a trial and for evaluation purposes. These farms were continuously monitored by the Coordinators of the solvent extraction plants and some of the farms were also visited by the members of Rapeseed-Mustard Crop Survey Team to see for themselves the progress. It was found that wherever Gujarat Mustard-3 variety is sown, the yield has increased by 30% to 50% in comparison with yield of conventional variety grown in the same farms. SEA is monitoring the exact yield in each farms where GM-3 seed variety is grown visà-vis yield of conventional variety of the said farms. The data collected would SAARC OILS & FATS Today March 2013
rapeseed SEA - Rapeseed/Mustard Survey - 2012-13 Rajasthan-District-Wise Area, Production and Yield
SAARC OILS & FATS Today March 2013
Rapeseed meal export
Chinese Delegation to Visit India
ollowing SEA Delegation visit to China in 2004, China started buying Indian Rapeseed meal and our exports touched about 4.0 lakh tonnes in 2011-12. However, due to reported malachite green contamination in Indian Rapeseed meal, China banned the import of rapeseed meal and other oilmeals from India since January, 2012. In last one year, SEA has organized number of road-shows to educate the farmers, oil millers and solvent extraction plants to do away with the used jute bags having marking made using malachite green dye to avoid contamination in rapeseed meal and also persuaded the Chinese Quarantine Authority (AQSIQ) to lift the ban. I am happy to mention that the AQSIQ has agreed to depute their expert team during middle of March, 2013 for inspection of process followed by solvent extraction units for rapeseed meal. The team would be visiting units who have registered and offer themselves for inspection of their manufacturing process. SEA would be coordinating their visit in consultation with Ministry of Commerce and Export Promotion Council of India, New Delhi.
SAARC OILS & FATS Today March 2013
rapeseed SEA Memorandum to Government
PLEA for duty increase to safeguard mustard growers’ interest
The Solvent Extractors’ Association of India recently sent a memorandum to Prime Minister Dr. Manmohan Singh and other concerned Ministers in the Union Cabinet bringing to their notice the record rapeseed mustard crop & its impact on farm prices and strongly urging them to requested to increase the duty on Crude Palm Oil from 2.5% to 10% and RBD Palmolein & RBD Palm oil from 7.5% to 20% to safeguard the interest of the rapeseed farmers. Following is the copy of The Memorandum Presented by SEA President Vijay Data: SEA at the outset would like to congratulate the Government for supporting and encouraging farmers for increasing production of rapeseedmustard. This year, due to good subsoil moisture at the time of sowing, useful showers during January & February, hardly damage due to severe cold and continuous favourable weather has helped to increase the production by almost 25%. We expect Rapeseed Mustard production in Rajasthan to rise to almost 34.0 lakh tonnes and all India production to exceed 71.0 lakh tonnes (Annexure-I). While the farmers have done their job, it is our duty to see that they get remunerative prices for their produce. However, looking into the current situation, due to heavy imports of palm products into India, they may not get the remunerative prices and may be compelled to sell at MSP (Rs.3,000) or below MSP during March to May when the market arrivals would be highest. In this regard, once again we would like to bring to your kind notice the following developments for your kind consideration. 1 Import of Edible Oil during Oil Year 2011-12 (Nov to Oct) touched 99.8 lakh tonnes (valued over Rs.56,000 crores) compared to 83.7 lakh tonnes during previous year i.e. up by 19% over the previous year. 2 During 2011-12, Palm oil import increased to 76.7 lakh tonnes from 65.5 lakh tonnes in the previous year. 3 In the current oil year (2012-13), from November 2012 to January, 2013(3 months only) import of edible oils has jumped by 25%
SAARC OILS & FATS Today March 2013
and is reported at 26.9 lakh tonnes compared to 21.3 lakh tonnes during same period of last year, out of which Palm oil products import has increased from 18.04 lakh tonnes to 22.98 lakh tonnes. The domestic availability of edible oils during the oil year 2011-12 has been 73.4 lakh tons as against availability of 79.2 lakh tons and 72.6 lakh tons during the oil years 2010-11 and 2009-10.
From the above data, it is evident that growing demand of Edible Oils in the country is being met by additional imports rather than from domestic source of supply. To arrest or reverse this trend, it is essential that the Government encourage the production of Oil seeds in the Country. This would also be in line with the statement made in the recent past by the Honorable Prime Minister mentioning that “the country may have to have a new mission for raising the production of pulses and oil seeds”. However, the present trend in the International prices are working against this objective of the Government. This can be best understood from the following information : 1 Currently, Malaysia & Indonesia have huge palm oil stocks of over 6 million tonnes. In order to get rid of this excess stock, these palm oil producing countries are pushing aggressively their exports into India, thereby depressing our Indian local prices. 2 In April, 2012, the average CIF price for CPO was about US$ 1184 per tonne, which has now come down to US$ 810 on 11th February, 2013 and similarly RBD Palmolein prices have fallen from US$ 1205 in April to US$ 865 at present. Both RBD Palmolein and CPO prices have reduced by US$ 350-375 in the last 10 months, i.e. by over 30%! 7. In July, RBD Palmolein which was quoted at Rs.62,131 in dometic market, has now fallen to Rs.51,000/- per tonne. 8. The decrease in price of CPO and RBD Palmolein in the International market has severely impacted our domestic market. Rapeseed price at the time of sowing in Oct/Nov, had touched Rs.4200 per quintal which encouraged the farmers to expand area under rapeseed-mustard during rabi season. However, now at the time of harvesting, the prices
have under pressure from palm oil prices have fallen to Rs.3,600 per quintal and are likely to go down further and may touch MSP of Rs.3000 with the building up of arrival pressure . The farmers are more concerned about the price of rapeseed at the time of harvesting. This type of negative trend of high prices at the time of sowing and low prices at the time of harvesting will discourage the farmers and may make them to resolve, not to undertake oilseed cultivation in future, unless they are assured of remunerative prices for their produce. Most of the RBD Olein is consumed by Hotels, Canteens, Restaurants and the Food Industries like Haldiram etc., while, small quantity of Palmolien, is consumed by lower income group of the society, who are anyway protected by subsidy of Rs. 15 per kg. given by the Government under PDS distribution. Hence, price increase due to imposition of import duty will not affect the genuinely needy lower income population. Imposing duty of 10% on CPO and 20% on RBD Palmolein will generate Rs. 4,000 to Rs,5000 crores revenue to the exchequer, part of which can be used to further subsidize palm oil if needed and also these funds can be utilized for development of oilseeds and oil palm development programme.
10. Further, It is also pertinent to note that the prices of Palmoil and Palmoilen are already lower by nearly 15% from the high prices witnessed about six months ago and therefore increase in duty will not impact majority of the consumers or be a cause of inflation in the food items. In view of the above facts, we request you to kindly consider to increase duty on Crude Palm Oil from 2.5% to 10% and RBD Palmolein & RBD Palm Oil from 7.5% to 20%. This will go a long way in boosting oil seed production in the country and in reversing the trend of declining self-sufficiency in edible oils, which in the long run is hazardous to India’s food security. Above all, it will give timely relief to our hard working Rapeseed Mustard farmers. n
Indian Edible Oils Demand Now & Later by Govindbhai G. Patel Mg. Partner, G. G. Patel & Nikhil Research Company
verall GDP Growth in last 5 years is registered at 7.8% but forecast for the current year is 5.7% on account of world over slow down. Agriculture has been a way of life and continues to be the single most important livelihood of the people in India. 55% of the population depends on Agriculture and allied activities. India has arable land of 161.7 ml Ha. Out of which only 35% of the arable land has irrigation facilities while only 24% of the land used for Oilseeds cultivation has irrigation facilities. There is wide variation in Agriculture Sector GDP growth on account of vagaries of monsoon. The average GDP growth during last 5 years was only 3.3% for Agricultural Sector
against 7.8% overall GDP growth. The Current yearâ€™s forecast is for 1.6% only on account of unsatisfactory rainfall. Indian Oilseeds and Edible Oils Production The area under 7 major oilseeds increased from 21.38 ml Ha in 2001-02 to 25.24 ml Ha in 2011-12 i.e. the average increase per year was 1.80%. The highest increase in Soyabean area which has increased from 6.34 ml Ha 2001-02 to 10.30 ml Ha in 2011-12. Sunflower and Groundnut area is in a declining trend. There is wide fluctuation in Mustard area. The production of these oilseeds increased from 19.40 ml T in 2001-02 to 23 ml T in 2011-12 average increased
by 1.85% per year only. Soyabean production is increasing trend while Sunflower production is in decreasing trend. There is wide fluctuation in production of Mustard and Groundnut. Indian Oilseeds productivity is very low in comparison with world average. Vis-a-vis world average groundnut productivity is 66%, Soyabean is 42%, Mustard seed is 45%, Sunflower is 55% and Sesame is 88% of the world average. The Indian Oilseeds productivity is low because: l There is too much dependence on Monsoon, which is erratic and gives natural rain for 4 month out of 12 in a year. l So the Indian farmer is compelled to take early maturing verities which SAARC OILS & FATS Today March 2013
Indian Oilseeds productivity is very low in comparison with world average. Vis-a-vis world average groundnut productivity is 66%, Soyabean is 42%, Mustard seed is 45%, Sunflower is 55% and Sesame is 88% of the world average
yields less in summer crops, and due to poor irrigation facilities for winter crops, are not able to cover their total land for cultivation or have to take verities which needs less water. l The summer crops gets lesser maturity time and winter crop is not irrigated very well. So both yields are much bellow the word averages. l Small size of the farm land – Average holding of the farm land is only 1.55 Ha. Domestic Production, Consumption and Import of Edible Oils There is no significant increase in the Indian Oilseeds production during last 5 years and also for the current year. The production of 6 major oilseeds have remained between 22 and 23 ml T in last 5 years. In the current year due to failure of monsoon in the Groundnut producing states, the production may decrease to 4.4 ml T only against last year’s 6.0 ml T. Groundnut is the high oil content oilseed and hence it makes more difference in availability of oils. Large quantity of Groundnut Kernels are exported and consumed in India, which also reduces availability of Groundnut oil. Last year, Mustard growing States. For the current year, off course it is too early to estimate the production as sowing is just completed and the crop is in germination stage but considering the normal weather, I estimate the Mustard crop at 6.3 ml. T. Sunflower seed production is decreasing year after year as productivity is not satisfactory. Soyabean crop is incrasing every year. It is expected to increase to 10.7 ml T in 2012-13 in comparison with 10 ml T in 2011-12. But Soyabean has significantly higher production of meal and so does
SAARC OILS & FATS Today March 2013
not contribute significantly in increasing the oil availability. In the current year, the Cottonseed production is also likely to increase by 1.2 ml T. India’s Per capita consumption at 15.8 kg (13.10 kg food and 2.7 kg for non-food) against World average of 25.91 kg in 2011-12 (as reported by Oil World for food and Non-food use) is very low even in comparison with developing countries like China and Pakistan. India’s per capita consumption o edible oils was 9.4 kg in 2001-02 and it has increased to 13.1 kg in 2011-12. The average increase during these 10 years was 0.370 kg/year but during last 4 years it increased by 0.650 kg/year. It is estimated to increase to 13.60 kg in 2012-13. It is pertinent to note that in spite of economic slowdown in 2008-09, India’s consumption increased from 10.5 kg to 11.7 kg (highest increase in consumption growth) due to lower prices as Indian consumer is very much sensitive to prices. Quantity wise edible oils consumption increased from 10.1 ml T in 2001-02 to 16.3 ml T in 2011-12 i.e. the consumption increased by 6.2 ml T in this period and it is estimated to increase to 17.1 ml T in 2012-13. From a study of the supply/demand scenario in the last 5 years, you may see that domestic production is around 6.2/6.6 ml. T only except in 2010-11 it was 7.3 ml. T, mainly on account of good Mustard seed crop. Domestic production of edible oils may decrease by 70 k in 2012-13 in comparison with 2011-12. The largest reduction of 280 k may be in Groundnut Oil followed by reduction by 140 k in Cotton Oil. The availability of Mustard Oil may increase by 240k on the assumption that the weather will be normal as mentioned earlier. I estimate the total import to increase by 440k to 10.4 ml. T. in 2012-13. Import of Palm Oil may increase by 750k. The
import of Sun Oil may decrease by 190k as Sun Oil prices are at a premium over Soyabean Oil which was at a discount from Soyabean Oil in last year. Last year, India imported 90k of Rapeseed Oil but in the current year, either Rapeseed Oil may not be imported or import may be very negligible. Soya Oil import may remain almost at the last year’s level. However, the component of import of each oil will depend on relative price differences with the individual oils. South American Soyabean crop is expected to be much more larger than the last year and if Soyabean Oil prices are more competitive, the import of Soyabean Oil may increase and correspondingly the Palm may decrease. However, India will remain promising market for export of edible oils. Over and above this, India imported 460k non-edible oils in 2008-09 and it was reduced to 210k in 2011-12 due to larger processing of CPO in India. Import of Non-edible oils may be 200k in 20012-13. Non-edible oils comprises PFAD, CPKO, PKFAD, CPS, etc. In quantity terms, the import increased by 125% while domestic production increased by 18% only during the period 2001-02 to 2011-12. Dependence on import increased from 44% in 2001-02 to 60% in 2011-12 and likely to increase to 61% in 2012-13. Out of the total imports during the year 2006-07 to 2011-12, the average import component of individual oils was: Palm 77%, Soya 15%, Sun 7% and others 1%. Largest share is for the Palm Oil. The consumption of Groundnut Oil has decreased from 12% to 2.4% in last 10 years and it is estimated to decrease to 0.7% only in 2012-13. Soyabean Oil consumption decreased from 22.3% to 16.4% in 2011-12 and may decrease to 15.4% in 2012-13. Mustard Oil consumption has decreased from 17%
edible oils to 11.3% in 2011-12 and may be at 11.5% in 2012-13. Other oils consumption has decreased from 12.2% to 9.1% in 201112 and may be 8.9% in 2012-13 but Lion share of consumption in taken away by Palm Oil. It increased from 29.1% to 45.4% and it may increase to 50.4% in 2012-13 subject to relatively lower prices as mentioned earlier. Sun Oil is being consumed by upper class and upper middle class of the people. Its consumption increased from 3.1% to 8% in 2011-12 and it may decrease to 6.9% in 2012-13. Cotton Oil consumption increased from 4.4% to 7.4% in 2011-12 and it may decrease to 6.2% in 2012-13 due to less crop. Consumption and Characteristics of Indian Consumer in Reference to Palm Oil l Palm Oil is the main oil in Out of Home Consumption (OHC) like HORECA, Chips-Savory manufacturer, etc. The estimate for OHC in 2010-11 was 4.5 ml T and it is estimated that in the current year it may increase to 5 ml T. The share of OHC is 30% and above in per capita consumption. l The Lower and middle class Indian consumers are very price sensitive and switch to cheaper oils. l Palm being the cheapest edible oil is used in blending with other oils and also to fill up the gap of other oils. l It is consumed the most by lower class & lower middle class of Indian society. l Though lower usage in house hold consumption by middle class, but some have started increasing Palm Oil consumption. l Share of food budget is 47% v/s Total expenditure budget of an average consumer, which justifies their sensitivity towards oil price. l People belonging to lower income class buy Rs.5/- or Rs.10/- oil in loose, unknowingly buy more at lower price and less at higher price.
Retailers say that Rs.5-10 oil buyers purchase by Value of Rupees and not buy quantity. l A point to note is that the Indian edible oil demand is both Switchable & Elastic Switchable to other oils to quiet an extent & is elastic to an extent that means it reduces or increases to an extent with change in prices. The glaring example is 200809. On spite of world over economic slowdown, and also India’s less GDP Growth (Overall 6.7% and Agri 0.1%), the consumption jumped by 12% due to lower prices. l Overall oil and palm oil consumption in India seems very promising. India has Promising Demand Growth Demand drives in India l Consistent GDP growth rate at or above 8% in last 5 years (But current year it may be about 6%). l The big emerging Indian middle class. l The double digit growth of out of home consumption of edible oils. l Per capita consumption of Edible oils in India at 13.10 kg (2011-12) which is still a lot below threshold level of consumption and promising to increase. l Schemes like NREGA and rising labour income is increasing the income level of people who are consuming much below the all India level. l Supply of edible oils by the Government at subsidized rates under PDS which is mainly palm oil. l Duty Free-Regime: Zero per cent duty on imports has facilitated lower oil price to consumers and in turn push demand. Edible Oil Demand & Supply by 2015-16 and 2020-21 I estimate demand for edible oils to
increase to 20 ml T in 2015-16 against 16.3 ml T in 2011-12 and 17.1 ml T in 2012-13. The domestic production may not catch up with the demand growth and I estimate that India’s requirement of import at 12.5 ml T in normal scenario. In the Pessimistic scenario (Poor domestic production) and Optimistic scenario (Good domestic production) at 13 ml T and 12 ml T. Likewise I estimate India’s demand to grow to 24.2 ml T in 2020-21 and in that case import requirement increase to 15.5 ml T in normal scenario and to 16 & 15 ml T in pessimistic and optimistic scenario. Output & Demand Growth l India will continue to be large importer of Edible Oils because domestic output growth is unlikely to catch up with demand growth. l Strong GDP growth contributed mainly by Manufacturing and Service sectors and also rising population automatically translates to higher demand for a host of food products including edible oil. l How much of this incremental import demand of Edible Oils particularly Palm Oil will be able to garner, would of course, depend on relative prices of various oils, tariff structure, landed cost & Domestic Supply. It would be in edible oil exporters’ interest to look at India as a large market that is going to be available for a very long-term – for long years – and do all that is required to sustain and service it including supply of better quality of edible oils – better than prescribed by Indian Food Standards and Custom department’s prescribed specification. n This paper was presented by Govinbhai G Patel; Mg. Partner; M/s G G Patel & Nikhil Research Company at Palm Oil Economic Review and Outlook Seminar 2013 held on 14th January, 2013 in Kuala Lumpur, Malaysia. SAARC OILS & FATS Today March 2013
Emerging Technology Trends and Future of Soya Foods in India by Dr. S. D. Kulkarni Project Director, Agro Produce Processing Division (APPD) Central Institute of Agricultural Engineering, Bhopal
he production and utilization of soyabean, the golden grain of the globe, is growing in India. Global soyabean production in the first decade of the 20th Century was about 25 million tonnes which now in the first decade of the 21st century has increased to about 230 million tonnes, more than ten times. India is not an exception in soyabean production (Table 1). Soyabean has been, continues to be and will continue as a major source of healthy living for people world over. Food uses of soyabean have been increased with time for human nutrition and health applications. All the sectors involved in soyabean production to consumption stage have responded to the scientific and technological developments and a result, soyabean production and productivity have increased. The benefits of direct soyabean use for human health have been widely explored in many countries of Asia. In the last 2-3 decades, processing and utilization of soyabean has increased exponentially towards exploiting the full benefit of soyabean in extending nutritional advantages to a large segment of the world population. Soyabean thus, has now become the preferred vegetable protein for food applications due to its multiple functional properties and cost effectiveness. Indian population is predominantly vegetarian and majority of the population below poverty line suffer from protein-calorie malnutrition as they cannot afford high cost traditional pulses and/or animal product like milk, egg, etc. Even the majority of non-vegetarian population does not afford costly animal protein on regular basis. In such a situation, soyabean is the cost effective alternative to provide protein and fat for good health.
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that the daily use of soyabean in food would provide balanced nutrition at a low cost. Some of the health benefits of regular consumption of properly processed soya food products are: reduces the risk of coronary heart diseases, helps in preventing cancer, suits to diabetic patients, good for lactose intolerants and provides dietary fibre. Some of the trends are presented as an indicators for strategy.
Use of Only Properly Processed Soyabean is Good for Health and Hapiness Soyabean being the relatively newer addition to India, acceptance of soya foods in India has been slow. However, now due to enhanced awareness more and more people are getting inclined towards soyafood because of their economic, nutritional and health benefits. It, therefore, ensures economic viability of soyabean industry and promises household nutritional security and better health in near future. To extend these benefits further to needy population of India at a faster rate the intensive efforts for financial and policy inputs at Govt. level are much needed. Consumption of Raw/Unprocessed Soyabean in the Diet is Not Recommended
Soyabean processing in production catchment It is, now, known fact that mainly because poor financial conditions majority of the farmers are becoming economically weaker for taking up this activity. Such a situation demands initiation for supplementation of farm income with low investment even at cottage scale. Country is facing malnutrition problem in women and children. Though, many governmental schemes are operational, unless the nutritious food is made available to the needy population at affordable cost locally, the problem is not be solved. Under this situation, soyabean, the nutritious food raw material available in the country can be processed at rural level to provide income and employment generation opportunities and made available to population. This approach may contribute for sustainable agriculture soyabean production catchments.
Emerging Trends and the Future Strategy The soyabean processing for food uses for the benefit of enhancing nutrition security of the population is being viewed on account of various approaches based on the emerging trends. Awareness about the usefulness of soya foods for nutrition and health benefits is now spreading among masses and now people know
Organic processing of soyabean for oil Soyabean is generally processed in solvent extraction plants for soya oil extraction. Many customers now a days seek organic products from production to consumption stage. The organically produced soyabean can be processed for oil by using an extrusion â€“ expelling system. Processing involves partial defatting of soyabean using mechanical
soya foods Table 1: Growth of soyabean production in India Production year
Production, million tonnes
Note: By 2025, the average yield of soyabean is expected to go up to 2 t/ha and thereby soya production around 25 million tonnes.
expression aided with extrusion cooking as a pretreatment to produce physically refined oil and protein rich edible grade medium-fat soyaflour. It, thus, gives totally organic product as no chemical is used at any stage of processing. Defatted soyaflour as food supplement Value added food and feed products from soya meal for domestic markets is the need of the day mainly because of the fact that large percentage of children (35-55%) and women (over 35%) are undernourished for protein and high protein (52%) soyameal is exported at very low price (Rs. 20 per kg). Solvent extraction of soyabean using superior technology to produce oil and edible grade soyameal is thus being considered on priority. Soya milk and soya paneer The potential alternative for preparation of soya milk and soya paneer can be manufacturing of soyamilk powder at a centralized large scale facility and then making it available to the soyamilk and soya paneer manufacturers at different locations to minimize the dependence on soya milk plant set-up and electricity for manufacture of these products. Soyabased functional foods People are becoming health conscious and thereby demand of speciality foods is likely to increase. Soyabean has tremendous potential to be transformed into a number of formulated and fabricated foods suiting to the requirements of diabetics, lactose intoterant and cancer & CVD patients. Use of fruits and vegetables, dairy products, food legume for development of ready to eat extruded products and nutritious food
mixes is another emerging area to meet the nutrition requirement of population of different age groups starting from children to elderly. The scope for the enterprises based on these is envisaged in years to come. The strategy The desired approach is complete utilization of soyabean and its products in the domestic market especially the soyameal through its utilization in food, feed, pharmaceutical and industrial applications. This requires need-based and high quality R&D in the area of soyabean processing and utilization. Some of the options are production of protein rich edible defatted soyaflour to be used in wheat and chickpea flours for higher protein content and better nutritional quality; high quality and cost-effective poultry, aqua and cattle feeds; soyaprotein concentrates, isolates and hydrolsates to be used in food formulations for infants, children, adult and aged persons. It demands continued and quality research on soyabean processing and utilization. Soyafoods are Nutritious, Good for Health and Economical. Make them Part of Daily Diet. Protein is essential for every one and it is derived from both plant and animal sources. Plant protein is much needed for over 60-70% vegetarian Indian population to get their dietary proteins from oilseeds. Protein from animal sources are constly and only a limited population has access to it. About 40% of Indian population is below poverty line and does not have enough purchasing power to buy even pulses – the major dietary protein source for them. In such a situation, food use of soyabean is one of the most appropriate options forthcoming for India to augment its protein supply at a price which is even affordable to the poorer section of the population. Training and Entrepreneurship Development It is an established fact that soya food products are nutritious, health promoting and economical. Incorporation of properly processed soya products, in daily diet, is therefore, advocated for deriving benefits. However, careful processing of soyabean is necessary prior to food uses. The establishment of cottage to small scale enterprises was encouraged and taking into account the need for proper training of upcoming entrepreneurs for
manufacture of good quality and safe products, and the training activity was started in 1995. The soya processing enterprises process soyabean mainly for production of soya milk, soya paneer, soyaflour, soyabased bakery products, soya nuts, etc. These enterprises have succeeded in making available nutritious soya foods to the population of different states. Now, soya foods are increasingly becoming a source of nutrition and health benefits at costs affordable to different sections of the society. Variety of soya products is available through cottage to small scale enterprises covering the conventional type of food products range of different regions/states. The wide spread establishment of soya food based enterprises is expected in future in India. Soyabean Reduces the Risk of CHD/ CVD, Helful in Preventing Cancer, Suits to Diabetic Patients, Beneficial to Lactose Intolerants, Provides Dietary Fibre. Soyabean food options Soyabean is generally processed for it’s oil, protein and lecithin. Whole beans or partially/full defatted beans can be used for making various soyabased food items. Normally, whole beans are used for making full fat soya flour, dairy analogs (soya milk, soya paneer, soya yoghurt, soya ice cream) fermented food (tempeh, natto, Sauce and Miso) and snack foods (roasted/sprouted beans). Soya flour can also be made from partially/fully defatted beans and used in making baked products (chapaties, bread, biscuits, bun, rusk and cake), texturised soya proteins (TSP), protein isolates and concentrates, extruded snack foods, and so on. Variety of soya food products can be prepared and selected depending on the nutrition, protein – calorie, requirement. These products can be prepared with due training for manufacture of safe products even at cottage scale. Soyabean has bright future in India. Low-priced and high nutritive soyabased food and feed products are gaining consumer acceptance and the demand for these products is increasing day-by-day. It, therefore, ensures economic viability of soyabean industry and promises house-hold nutritional security and better health at an affordable price. Properly Processed Soyabean Only should be Made Part of the Diet for Nutritional and Health Benefits. n SAARC OILS & FATS Today March 2013
12th Five Year Plan
Working Group Report Wants
Development of Feed Sector
his article is based on the comprehensive “Report of the Working Group on Animal Husbandry & Dairying: 12th Five Year Plan (2012-17)”, which was submitted to the Planning Commission, Government of India. The report presents performance of India livestock sector and its contributing factors including development programs and policies pursued in the recent past. It also suggests a roadmap for achieving the targeted rate of growth during the 12th Plan ensuring its sustainability and inclusiveness. The suggested programs and policies are an outcome of the deliberations among members of the working group and the regional consultations with stakeholders in livestock development. Here we are focusing on “Chapter 9: Feed and Fodder Development”. Present status and trends Though feed and fodder is one of the most important contributing factors for the growth of livestock sector, development of this sector has not received the required level of focus in
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Fodder seed production at different stages, its availability, market linkages, and seed replacement rate are few of the issues of concern. There is a substantial gap between the requirement and availability of quality seeds the past. It is estimated that the 60-70% of total cost in livestock production is due to feed and fodder. Any attempt towards enhancing feed availability and economizing the feed cost would result in increased margin of profits to livestock owners. Over the last two decades (1985-86 to 2005-06) availability of various types of feed has increased. Even though availability of feed resources vary from area to area, but during this period, the country as a whole recorded 52% (240.7 to 365.8 Mt), 76.0% (19.6 to 34.5 Mt) and 1.8% (124.3 to 126.6 Mt) increase in crop residues, concentrates and green forages respectively. In spite of this, there is a gap in the availability vs. requirement. As
per estimates, the deficit of dry fodder, concentrates and green fodder currently is 10, 33 and 35 percent respectively, which by 2020 is likely to be 11%, 35% and 45%. Lack of green fodder Availability of crop residues and concentrates is linked with the food crop production and since the overall food crop production in the country has shown an increasing trend, the crop residue and concentrate feed ingredients availability has also shown a commensurate increase. However, the crop diversification, which is seen in the recent years with commercial crops replacing the traditional cereal crops especially the coarse cereals, is likely to have an impact on the availability of crop residues. What is more concerning is the stagnation in the availability of green fodder and its increasing deficit over the years. Forage crops are usually area, region and season specific. These are generally cultivated on degraded and marginal lands with minimum input, in
cover story terms of fertilizers, water and operational energy. In case of forages, regional and 55 seasonal deficiencies are more important than the national deficiencies, as it is not economical to transport the forages over long distances. It is estimated that out of 55 micro-regions of the country, only 12 regions have surplus fodder, while the remaining 43 have deficiencies of one or other kind of feeding material. For achieving the targeted milk production of 160 million tones by 2020 from the current level of 111 million tones, the requirement of feed in 2020 would be of 494 mt dry fodders, 825 mt green fodders and 54 mt concentrates. Fodder seed production at different stages, its availability, market linkages, and seed replacement rate are few of the issues of concern. There is a substantial gap between the requirement and availability of quality seeds. Lack of better seeds According to an estimate, only 25% of forage seeds are available, that too of 15-20 years old varieties. Seeds of better and newer varieties are not available to the farmers for cultivation. Production and early replacement of quality seeds of newer varieties need to be optimized. Role of Technologies Over the years, considerable technological advancement has taken place in the feed and fodders focusing on enhancement of nutritional quality and productivity enhancement. The by-pass nutrient technology has been taken up by private feed manufactures as well as NDDB & dairy federations and benefits of this technology have percolated at the ground level. The Area Specific Mineral mixture technology has helped to a considerable extent in overcoming the problem of infertility at field level. Benefits of these technologies need to be fully exploited. The key driving forces for feed and fodder development in the coming years would be on productivity enhancement, shift to semi-intensive/ commercial production systems and convergence with other flagship schemes of the government like MNREGA, RKVY, Watershed program etc. The countervailing forces that may restrict the development are nonavailability of sufficient quantity of quality fodder seeds and lack of appropriate extension services 56 Ongoing programs and their analysis For addressing the feed and fodder
Union Budget 2013-14
Govt to launch Rs. 307-cr for National Livestock Mission The Union Budget 2013-14, presented by Indiaâ€™s Finance Minister P Chidambaram, gives Rs. 307 crore for The National Livestock Mission which will be launched in 2013-14 to attract investment and to enhance productivity taking into account the local-agro climatic conditions. Further, a sub-mission for increasing the availability of feed and fodder would also be launched.
development during the 11th Plan, DAHDF has been implementing one Centrally Sponsored and one Central Sector Scheme with a budgetary outlay of Rs. 141.40 and 80.00 crores, respectively. The Centrally sponsored scheme of Fodder and Feed development with its sub components was expected to address the problem of feed and fodder shortage. However, considering the performance of the scheme during the 11th Plan period, it appears that the scheme has not been able to deliver the desired results. The Centrallysponsored â€˜Fodder Development Schemeâ€™ with four sub components which was initiated during 2005-06 focusing on four independent and not interlinked components has since then undergone considerable changes both in its focus and components.
sub component of the Fodder and Feed development scheme like Fodder Mini Kit Scheme are quite popular among the farmers. However, the insufficient quantity of kits, time of supply and supply of seeds not preferred by farmers has over the years hampered the progress of the scheme to a great extent. The desired impact of Central Minikit Testing Programme on Fodder Crops being implemented by DAHD was not
Govt Schemes Considering the expenditure of Rs. 91.09 crores up to October 2011 against the outlay of Rs. 141.40 crores, the financial progress (64.36%) has not been very satisfactory. Some of
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cover story seen in most of the States. Fodder Mini Kit Scheme needs to be comprehensively relooked into if the desired impact is to be achieved. Under the Central sector scheme of Central Fodder Development Organization, the AH department has large infrastructure available in its seven regional stations and one unit of Central fodder seed production farm located in different agro-climatic regions of the country. During the 11th Plan period, against the budgetary outlay of Rs. 80.00 crores, an expenditure of Rs. 103.94 crores (129.90%) has been incurred upto October 2011. These units have served a 57 limited purpose and outcomes have not been commensurate with the investments made. Both the above two schemes needs a comprehensive relook and redesigning during the 12th plan period for ensuring that issues of feed and fodder which is a critical component for further growth of livestock sector are addressed in a holistic manner. Strategies and Programs for 12th Plan Adequate availability of livestock feed and fodder both quantitatively as well as qualitatively is going to be one of the key inputs in the growth of livestock sector during 12th plan period and beyond. With greater focus being given towards productivity enhancement in the recent years, it becomes all the more essential for ensuring the availability of quality feed and fodder to sustain higher productivity of animals. The expansion of area under cultivated green fodder crops in the coming years would essentially be demand driven and based on benefit – cost factor as demonstrated in Punjab. Establishment of commercial dairy farms with high productive cattle and buffaloes has created a higher demand for green fodder which consequently has resulted in dairy farmers taking up large scale cultivation of fodder maize crop either on their own land or on leased land. Conservation of fodder maize provides nutritious feed during the lean period and helps to cut down cost of feeding expensive concentrate feed. Future focus for enhancing green fodder production and its conservation has to be area-based approach where demand could be created. Need of Synergy It is paradoxical that DAC, which is implementing the ‘Accelerated Fodder Development Programme (AFDP)’ with a budgetary outlay of Rs.300 crores
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during FY 2011-12, has not effectively consulted DAHD while formulation of the 58 scheme. Further, it is understood that ICAR is also in the process of formulating a ‘fodder mission program’. Such disjointed and lackadaisical efforts may not yield the desired results in enhancing the green fodder production in the country. As per Action Plan of the National Dairy Plan, fodder production activity would be mostly through demonstration at farmer’s field. This would facilitate the much needed capacity building and awareness to the farmers. DAHDF needs to capitalize on this and promote area expansion program for enhanced green fodder production through cluster approach where NDP is implemented. Holistic Approach The existing problems in the fodder seed production chain of Breeder seed – foundation – certified – truthfully labeled, need to be addressed in right earnestness. Considering the fact that comparatively less importance is being given to fodder seed production by National Seed Corporation and other private certified seed companies also, some out of the box solutions like establishing Producer Companies, market linkage with private sector agencies etc. are called for. Involving ICAR institutions, SAUs, State agencies, Private sector along with farmers’ participation in a holistic manner could help in addressing this issue in proper perspective. Though area under natural grasslands/ pastures/ common property resources are on decline, in some of the regions especially under arid ecosystem are of considerable importance for livestock rearers. Excessive stocking pressure and degeneration of the original pasture grasses has led in to decline biomass productivity from these resources. A comprehensive strategy for rejuvenation of these important resources is required Increasing crop residues Considering the fact that livestock production systems in India predominantly sustain on feeding of crop residues; the scenario which may not undergo drastic change in the near future, it is important to focus on augmenting for its adequate quantitative and qualitative availability. Further, for sustaining high productivity in dairy animals and for commercial poultry production, availability of nutritiously
rich compounded feed at reasonable cost would be a critical aspect. Role of Private Sector The manufacturing of compounded cattle feed is by and large with the private sector agencies (both organized and unorganized) and dairy federations. The usage of compounded cattle feed has not witnessed the desired level of growth over the years. The shift of focus towards rearing animals with higher production potentials and the mushrooming of commercial dairy farms is likely to enhance production and consumption of nutritionally balanced compounded feed. The Ration Balancing Programme envisaged in the NDP would certainly facilitate the dairy farmers in providing a nutritionally balanced feed, which is cost effective to their animals by using feed ingredients available with them and also inclusion of compounded cattle feed. Other measures Efforts need to be focused on augmenting the existing feed resources by tapping non-conventional feed resources. Promotion of fodder cactus in arid ecosystem especially in states of Rajasthan and Gujarat may be taken up during 12th Plan period. The use of bypass nutrients, promotion of area specific mineral mixtures, fodder enrichment and densification could be some of the focused areas for enhancing the productivity and thereby furthering the growth of the sector. A ‘National program on livestock feed and fodder’ be formulated and implemented in a Mission Mode. The scheme so developed has not only to address the issue of green fodder seed production but also encompass other aspects like area expansion of green fodder, fodder conservation, fodder densification, establishment of fodder banks, and nutritional enhancement of crop residues, capacity building, and extension. The ongoing centrally sponsored and central sector schemes on ‘Feed and Fodder Development’ should be with this mission project. The existing central sector scheme of ‘Central Fodder Development Organization’ may be subsumed with the recommended project and infrastructure and facilities at the central and seven regional stations may be beneficially utilized exclusively for fodder seed production. n
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India needs technological upgradation in feed milling ...Dr. Dinesh T. Bhosale Feed additive imports are facing lot of problems and delays. So we are trying to address the issue. We have planned to conduct aqua seminar at Hyderabad, dairy seminar at Anand, poultry seminar at Coimbatore and workshop for feed millers at Bangalore in addition to National Seminar
Animal and poultry feed industry has been facing a lot of problems and price fluctuations for a long time. As Chairman of CLFMA of INDIA, could you please elaborate on the current status of animal and poultry feed industry in India, and the problems and issues faced by the industry? Poultry feed industry is the most organized sector. Around 12 million tons of broiler feed and 8.5 million tons of layer feeds are produced. Broiler feed is produced by industry whereas, 85% of layer feeds is manufactured at farm level by farmers. Around 7 million
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Association of Livestock Industry, CLFMA of India was formed in 1967 with the objective of helping the promotion of overall animal husbandry, including promotion of concept of balanced feeding of animals in accordance with their nutritional requirements for deriving from them maximum output through productivity improvement. It was broad based to include members from all sectors of livestock production during 2002. Members of CLFMA from feed sector have a total installed capacity of over 10 mmt / annum of feed production. CLFMA has membership of manufacturers and suppliers of feed additives, raw materials, packaging materials, feed plant and machinery, Laboratory equipments, breeders, integrators, meat processors and exporters, dairy processors and others connected with the Indian Livestock Industry. Dr. Dinesh T. Bhosale, is the Chairman, CLFMA of India. He is also a member of BIS animal feeds committee, Vice President (West India) of Poultry Federation of India, since July 2006, and served as Treasurer (20042006) and General Secretary (2000-2004), is also a Member of managing committees of Animal Nutrition Society of India (ANSI) and Animal Nutrition Association (ANA), Member of Editorial board of Journal of Animal Nutrition and Feed Technology. DG, ICAR has nominated him as member of Management Committee of National Institute of Animal Nutrition and Physiology, Bangalore for a period of three years with effect from 7-1-2011. In an exclusive chat with M. B. Naqvi, CEO, Media Today Group (Publisher of SAARC Oils & Fats Today), Bhosale talks about Indian feed industry, its problems and possible solutions among other things. Excerpts:
tons of cattle feeds are manufactured by industry and Cooperatives, whereas requirement is ten times more. Presently dairy farmers are feeding raw materials directly which is not balanced nutrition and hamper productivity of dairy animals. Around 600,000 tons of fish feed (mostly extruded) and 300,000 tons of shrimp feeds are manufactured. Due to steep rises in prices of raw materials last year, prices of feeds and cost of production went up significantly, but selling prices remained low. This resulted in tremendous losses to farmers and industry.
The industry has been asking government to ban export of poultry feed materials like maize, soyameal, mustard de-oiled cake and bajra to bring down feed prices. What are your views on this? CLFMA of India never advocates or supports ban on export of raw materials. Recently during budget, Government removed 10% export duty of DORB also. When raw material prices were high, feed manufacturers started using unconventional feed ingredients. Government has allowed imports of feed
interview ingredients at nil duty, but nothing came mainly due to price disparity and biotech issue. Technological upgradation is crucial for any segment. But it is happening very slowly in feed segment in India. Do you think persuading manufacturers to adopt latest technology and tools can bring down production costs which in turn can lower feed prices, thus benefiting animal and poultry farm owners? I don’t agree fully. If you will see we produce poultry feeds and fish/shrimp feeds like any other International feed miller. 70-80% of broiler feeds produced in pelleted/crumbs form. For layers, you don’t need pelted feeds. Extruded fish feeds are produced. There is a need of technology upgradation in cattle feeds. Stringent raw material quality control system is required to produce good quality feeds. Promotion of compound cattle feed is needed. The egg and poultry prices are skyrocketing. What are the main reasons behind it, and do you think lower input costs can stabilize prices? When prices were below production costs for almost 8 months in 2012, nobody reported it. Prices have gone up during last two months and now they are cooling down. As supply was tight, prices went up. But as such there is no relation between product cost and selling price as both poultry and eggs are sold as commodities. High input costs deter new entrepreneurs to set up ventures in the field of poultry and dairy. What should be done to encourage new activities and promote new hands? They should become member of associations like CLFMA first and we can guide them about hoe to set up new ventures. High input costs were just one of the deterrents and it should not stop people entering into this businesses. What are the main activities of CLFMA, and how does it help its members? 1. The feed manufacturers among members have set up modern and efficient feed mills, with facilities
for analytical testing of feed raw materials and finished feeds for providing quality assurance. 2. CLFMA has evolved standard specifications for compound feed for Cattle, Poultry and Pigs and also for the purchase of feed raw materials, which should help in providing quality assurance to farmers. 3. CLFMA organizes / conducts National Symposia, Seminars and Orientation Courses at veterinary colleges, Farmer Workshops and other Educational programmes. 4. Encourages applied research“CLFMA AWARDS” for the best research work in India. 5. CLFMA collects, classifies and circulates Technical, Managerial and Statistical information, besides information on government policies – On line, latest news and information on our website. 6. Makes representations to Central and State Governments and submits suggestions, thus providing a strong platform to voice of the industry before the Central and State Government. CLFMA sponsors research / surveys and studies, which are necessary and helpful for the growth of Livestock Industry.
they contact us. We are also part of committees of ICAR Institutes and veterinary colleges. We organize orientation programs for students to attract talent to work in the industry. CLFMA’s website, bimonthly magazine and annual survey report acts as ready reckoner for all of them. What are the future plans of CLFMA of India? Feed additive imports are facing lot of problems and delays. So we are trying to address the issue. We have planned to conduct aqua seminar at Hyderabad, dairy seminar at Anand, poultry seminar at Coimbatore and workshop for feed millers at Bangalore in addition to National Seminar. We also organizes national seminar to popularize use of oilmeal usage in animal feeds in collaboration with the Solvent Extractors Association of India (SEAI) every year. We also support various national and International expos. Either I or other office bearers also invited to speak at various conferences in India and abroad.
CLFMA’s views are solicited even by the government to formulate policies, could you elaborate about such other related activities of CLFMA? During last one decade, CLFMA has developed cordial relations with central and state governments and we are part of many committees. Whenever govt. needs any information, SAARC OILS & FATS Today March 2013
Shortsighted Trade Policies hurting Production of Edible Oils and Protein: The Way Forward Vijay Sardana
t is the duty of the government to ensure food security for the masses and also to ensure that food security must be based on domestic production not based on imported food to protect our strategic and sovereign national interest. As you are aware, carbohydrates, oils & fats and protein are the basic food components for any living human beings and animals. Today we are self-sufficient in carbohydrates only due to our policies for wheat and rice. It is high time we should consider how to fill the gap for oils and protein. Based on large number of studies, it is clear that our import tax policies are not supporting production of edible oils and proteins in India as per prevailing conditions. There is a need to have a serious look at it. Pl. have serious thinking and Brainstorming, if required, we are willing to join the discussion with all facts and figures to support your decision making process. Let me share some concerns and practical solutions, which I feel Government of India should consider in national interest to sustainable healthy diet for Indians and to protect its livestock sector. Concerns & solutions Concern: Duty Free Imported Oil at below the cost of oil production in India will destroy the Indian Public health the way Urea has destroyed soil health in India. Solution: In order to meet the shortage of edible oil government has allowed duty import of edible oil. In short term it appears we have controlled inflation by eating demand and supply, but the fact is we have destroyed the source of valuable proteins for human as well as animals from the oilseed cake. When we produce oilseeds in India we get both oil and cake in equal proportion. When we import edible oils we do not get cake which is a valuable
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source of protein for animals and humans. Concern: Indian Population is suffering from protein deficiency. Solution: In order to meet the shortage of protein we are importing pulses. It is like first we kill oilseed production without realizing that oilseeds give us oil and proteins. We can meet the oil deficit, but what about protein? By producing more oilseeds in India we can supply both oil and protein (cake) to the Indian population and perhaps reduce the import of pulses. Concern: Farmers are willing to grow but government is not encouraging. Farmers are willing to break wheat-rice cycle but government policies are not supporting. Solution: Farmers are worried about price fluctuation in international markets. Duty Free Edible Oil adds to serious price risk for farmers. Government policy is shortsighted to ensure balanced food security in India. Soon we will have serious implications. Concern: Farmers in Haryana, Punjab and western UP not willing to move away from wheat and rice crop cycle because the cost of edible oils and pulses depends upon international prices and they are not sure what will happen if international prices crash. At least in wheat and rice, government is assuring MSP. Solution: Develop a protect margin for the farmers by bring a customs duty of about 20 to 30 % on imported refined edible oil. So, that whatever is the price in international market it will always provide cushion to farmers to grow edible oil seeds. This should be supported by propagating the efficient cultivation of oilseed crops (mustard, soybeans, ground nut, canola, sesame, etc) in India through high quality seed supply and education. Concern: What government should do to meet edible oil, protein and current account deficit target? Is it possible all in
one approach? Solution: Yes, it is very much possible and doable. l We should promote oilseeds which are rich in oil as well as protein. l Crop which can be used as fodder for animal. l Crop which can be used as substitute for wheat. l Crop which can give same or more profit to farmers. l Crop which can improve the soil health. l Crop which needs very less water compare to wheat and rice. l Crop which is easy to store, process and can be used for human as well as animals as per the requirement. l Crop which can encourage small scale non-polluting industries. l Crop which enhances milk yield, egg yield, honey production, etc. as byproduct. Concern: Which crop can give this multiplier effect? Solution: Based on global experience and continue to track the new developments world-wide, the crop which can deliver all these benefits is Canola. It is a new crop for India but meets many objective for which Government of India is striving for. Canola is a recent development in International market. After few years of research, Indian Seed companies are ready to deliver for what government of India is looking for. Canola is appearing as wonder crop for farmers in Punjab and Haryana, but area is not going up because of tax free imports of edible oils. Oil seed production in general is not going up in any part of India. With growing population and per capita income, it is a dangerous sign and will have serious impact on current account deficit. There is International data to show that if canola crop is rotated with wheat it can help to increase wheat yields by 800Kg/ha which is almost 30%.
guest column Concern: What government should do? Solution: Government of India must come out with a taxation policy which ensures that income from oilseeds especially canola is always higher than wheat. This will reduce the burden on FCI. There is ready market for Edible oils and proteins because of shortage in domestic market. This will reduce dependency on imports. In short term it may look inflationary, but in fact it is not. Bringing customs duty is sensible approach because rising current account deficit will impact dollar value and will increasing inflation due to expensive dollar used for import of edible oils and pulses. Concern: What Government will gain? Solution: Today, we are importing edible oil worth USD10 billion. 30% duty means USD 3 billion as direct tax revenue for the government. l Reduced burden on FCI and food subsidy. l Saving is fertilizer, water and power subsidies because Canola and other oilseeds less inputs compare to wheat. l Saving in foreign exchange outgo and control of current account deficit.
l Pulses import will also reduce because domestic production of protein will supplement animal feed requirements. This will also save foreign exchange. l Livestock production will go up, which can facilitate export of livestock product. l Human Health related expenses will go sown because according to food science, canola oil is the best edible oil for heart. This can be checked based on oil science. l After harvesting, Canola plant will also meet the feed requirement for animals. l Canola also facilitates natural biofumigation of soil, which enhances yield of next crop and reduces the need of agro-chemicals for the next crop, means farmers overall cost of production comes down. Global experience says after canola, in next wheat crop yield is up by 20 to 30%. Concern: Proposal on behalf of all the well-wishers of India’s food security. Solution: Introduce 30% customs duty on refined edible oils or about 15% customs duty on crude edible oils to
encourage domestic production of edible oil seeds to meet growing demand for oils and protein. This will also protect foreign exchange used for import of edible oils, pulses, etc. With one sensible decision we can meet many targets with one decision. Is there any better way of meet national objectives? All stakeholders of Indian Agriculture are willing to come together and will to discuss the matter with Hon’ble Prime Minister and Finance Minister, in person. We are with you in addressing national food security and economic development issues. It is high time we must make Indian food secure because history of the world will tell you, that without food security no country can have independent foreign policy and sustainable economic policy in their national interest. We all are looking forward to see the “Vision and Action Plan of the Government for Development of Domestic Edible Oil Sector” at faster growth rate than growing demand for consumption. It is time for talking bold steps in national interests. n
SAARC OILS & FATS Today March 2013
D Indian Livestock Feed Sector
Golden Opportunities for Feed Milling Players
According to Agriwatch Research, India’s total feed requirements will be 123 million tonnes by 2014, and 127 million tonnes by 2015 26
SAARC OILS & FATS Today March 2013
espite a less-than-normal monsoon in the Kharif season, India’s Food production in 201213 is expected to be over 250 million tonnes – an achievement that reflects the inherent strength and resilience of Indian agriculture. Relying on the strength of Green Revolution strategy and having emerged an exporter of grains and food products, the government is keen to enact a Food Security law to ensure availability of minimum food grains to every individual in the country as his or her own right. As the Finance Minister P Chidambaram put it while presenting the Union Budget for 2013-14, food security is as much a basic human right as the right to education and the right to health care. All the same, some weaknesses in the implementation of agriculture development programmes are showing up in a glaring manner. One latest such instance is the colossal losses of procured food grains for want of proper storage facilities. The need of the hour is also increased productivity of crops, where
yield gaps are glaring. It is important to build an effective supply chain to ensure that what is produced in the farm reaches the consumer in good shape. In fact, what is imperative is to plug every loophole in the food production and distribution system, which means effective use of technology and building modern storages. Improvement in yield, through technological interventions, would help the country create for itself a special place in agriculture crops and products in the international market. Significantly, Prime Minister Manmohan Singh has been repeatedly emphasizing on the need for technology to tackle various ills facing the farm sector. The thrust of the budget proposals for agriculture in the latest Union budget, therefore, is on infusion of greater technology to increase productivity and widening the food basket. Higher allocations have been made for farm research, crop diversification and building market linkages. One of the important programmes
included in the Union budget for 201314 is the National Livestock Mission, to be launched with a provision of Rs. 307 crore to attract investment and to enhance productivity, taking into account local agro-climatic conditions. There would be a sub-mission for increasing feed and fodder availability. India has over 5000 Rice mills, 1000 Flour milling plants, 200 Soybean plants, 2000 Spices crushing plant, 1500 Pulses mills, 2000 Oilseeds crushing units, 1000 Feed Units, 100 Biofuel and energy projects, 1000 Coffee plants etc., looking for new and better technology to upgrade their manufacturing, processing, packaging line. “GrainTech India 2013” to be held in Bangalore is significant in this context. It will seek to reduce the technology gap in processing as well as in the supply chain. To feed increasing domestic demand and also to achieve the export targets of food products, Ministry of Agriculture, Ministry of Food Processing Industry and Agricultural and Processed Food Products
Export Development Authority (APEDA) under the Ministry of Commerce are investing a substantial share of their budget for promoting technological upgradation and value addition in segments like Rice, Wheat, Pulses, Oilseeds, Spices, Dairy & Feed and other activities in the food sector. The last edition of GrainTech India had the participation from over 21 countries around the world like the Netherlands, Turkey, China, Russia, Italy, Indonesia, Thailand, Singapore, Niger, Senegal, France, Spain, Belgium, Nepal, USA, Germany, Taiwan, Cameroon, Burkina Faso, Cote D’Ivoire, Cyprus etc., displaying their comprehensive range of products and technologies in the grain industry. At GrainTech India 2013, opportunities would be plenty for prominent trade visitors and potential clients to explore business opportunities in Indian and South Asian Grain Milling Industry. A Special feature of GrainTech India 2012 was an inter-active session, which SAARC OILS & FATS Today March 2013
pre event According to Dr. Dinesh T. Bhosale, Chairman, CLFMA of india, “Around 7 million tons of cattle feeds are manufactured by industry and Cooperatives, whereas requirement is ten times more. Presently dairy farmers are feeding raw materials directly which is not balanced nutrition and hamper productivity of dairy animals. There is also need of technology upgradation in cattle feeds. Stringent raw material quality control system is required to produce good quality feeds. Promotion of compound cattle feed is also needed” was attended by over 200 roller flour millers, rice millers, grain processors and technology suppliers to understand the need of grain milling industry, available latest technologies, business terms, after sales services etc. in emerging Indian market. The participants found the session most useful. This has enthused the organizers to make the inter-active session a continuous process as an important constituent of GrainTech India. Poultry & Livestock: Emerging Segment India is emerging as the world’s 2nd largest poultry market with an annual growth of more than 14%, producing 61 million tonnes or 3.6 percent of global egg production. The Indian poultry sector encompasses a range of farming systems – from hi-tech and export-oriented units at one end to backyard, small and marginal models on the other. The annual growth rate of egg production is 5-8%. Apart
SAARC OILS & FATS Today March 2013
from this, India ranks the 6th in broiler production (125 billion Rupees) with an annual output of 2.39 million tonnes of broiler meat, as per the estimates of the Ministry of Agriculture, Government of India. The total poultry industry is valued at about 350 billion rupees. The per capita consumption per year is approx 2.4 kg, which is much lower than the National Institute of Nutrition’s recommended 11 kg. The per capita availability of eggs was around 55 per year in 2011-12. Indian Union Agriculture Ministry’s Department of Animal Husbandry, Dairying & Fisheries, is focusing on increasing the animal population and productivity as a thrust area, offering financial assistance to the organizations. On the other hand, Ministry of Food Processing Industries through National Meat & Poultry Processing Board has its own programs to increase poultry & dairy processing Industries and value added
products to target export markets. Encouraged by the overwhelming response received in the last show, Media Today Group is organizing 2nd edition of “International Poultry & Livestock Expo 2013”, an International Event, concurrently with “3rd DairyTech India 2013”, “4th GrainTech India 2013” & “5th AgriTech India 2013” exhibitions, from August 23-25, at Bangalore International Exhibition Centre (BIEC), Bangalore, India. Govt. & Trade Support Participants in the show include members of CLFMA of India, Poultry Federation of India (PFI), India Poultry Journalists’ Association (IPJA), Andhra Pradesh Poultry Federation (APPF), Poultry Breeders Association (A.P.), APEDA, National Meat & Poultry Processing Board (NMPPB), National Dairy Research Institute (NDRI), Progressive Dairy Farmers Association, Progressive Dairy Farmers’ Association (PDFA), National Dairy Development Board (NDDB), All India Poultry Breeders Association (AIPMA), Central Institute of Fisheries Technology, Kerala Livestock Development Board, National Egg Coordination Committee (NECC) and other Poultry organizations.. Feed Gap & Lack of Technology According to Dr. Dinesh T. Bhosale, Chairman, India’s Feed Manufacturers
pre event Association CLFMA, around 7 million tons of cattle feed are manufactured by industry and cooperatives, whereas the requirement is ten times more. Presently dairy farmers are feeding raw materials to the animals directly which is not balanced nutrition. This hampers animal productivity. There is also a need for technology upgradation in cattle feed. Stringent raw material quality control system is required to produce good quality feed. Promotion of compound cattle feed is also important. According to Agriwatch Research, India’s total feed requirements will be 123 million tonnes by 2014, and 127 million tonnes by 2015. Among other things, the proposed National Livestock Mission is expected to give a fillip to feed and fodder production, while the Poultry & Livestock expo would strengthen the activities to meet the objectives of the government and its mission. Through technology upgradation the country can witness in the coming three to five years tremendous growth in livestock and poultry sectors. This is why dozens of globally renowned feed machinery manufacturers like Buhler, Fowler Westrup and Meyong and around 20 countries including Turkey are taking part in this expo to explore the emerging Indian market. There will be on display livetechnologies from over 15 countries as the suppliers know very well that covering
India is like covering the world, as this country’s feed segment is entering a crucial phase and requires the latest and a great number of milling machineries, storage silos, infrastructure facilities and ingredients. The demand-driven markets are attracting the top international players. Latest Technologies on Display This important expo will be a meeting point for the entire ‘Who`s Who’ in Poultry & Livestock. This would bring under one roof leading Poultry and Livestock players of India, Poultry Products & Technology, Poultry Equipment Manufacturers, Breeders, Animal Products Exporters, Experts & Leaders from Poultry & Livestock industry & allied activities who want to expand and diversify their business. Surely, this is the right time for exhibitors to be part of this mega event to show-case their comprehensive range of products and services among thousands of trade visitors coming from all parts of India and abroad. Technical Workshop To add more value to the show, the organizers jointly with CLFMA of India, are organizing a Technical Workshop concurrently to highlight the emergence of latest technological trends in different countries & the potentials in Indian perspective.
Expected Exhibitors Abroader Consultancy of India Pvt. Ltd, AkzoNobel Functional Chemicals B.V., ALAPALA Machine Industry & Trade Inc, Altuntas A.S. , AndersonNegele, AVASARALA Technologies Limited, Bastak Gida Makine Ltd, Sti BBCA Depolama Sistemleri Tarim Ins.Ve Mak.San.Tic.A.S., Bonfiglioli Transmissions (Pvt) Ltd, Bry Air (Asia) Pvt Ltd., Buhler (India) Pvt. Ltd., Danaher Sensor & Controls / Motion(DHR Holding India P Ltd), Dehsetiler Machinery Steel Construction .Co.Ltd., DeLaval Pvt. Ltd., Ecocert India Pvt Ltd., Ecoteam Srl, Flour Tech Engineers Pvt. Ltd., Fowler Westrup (India) Pvt. Limited, FRAME a division of FRACASSO S.pA, Frigortec, Gabbar Engineering Co., GEA Farm Technologies India, Glenrock Rubber Products Pvt Ltd, Goma Engineering Pvt Ltd., Inoxpa India Private Limited, Irle Kay Jay Rolls Pvt. Ltd., KP.Weldmesh Chief Silos-- Bansal Flour Mill Engineers, Mayuresh Industries, Millmore Engineering Private Ltd., Muyang Group, Mysilo Grain Storage Systems, Necdet Kaya Degirmen Ve Sanayi Malz. Tic. Ve San. Ltd Sti, Optics Technology, ORTOGEL SpA, Osaw Agro Industries Pvt. Ltd., Osaw Industrial Products Pvt. Ltd. (Indosaw), Özenir Flour Milling Machinery Co., Ozpolat Machine Industry and Trade Company, Parantez Group, Patkol Plc., Pingle Flour Machinery Group Co., Ltd., Polchem Hygiene Laboratories Pvt Ltd, Poultry Federation of India, Premium Transmission Ltd, Prime Bovine Genetics Pvt. Limited, Shekhar Brothers, SSP Pvt Limited, Storti (Beijing) Cattle Feeding Machines Co.,Ltd., Storti S.P.A., Sumak Milling Machines, Taral Tarim Makine ve Aletleri Sanayii A.S., The GSI Group LLC, Grain Systems inc, The Solvent Extractors’ Association of India, Toshniwal Systems and Instruments Pvt Ltd, Udawat Engineering Works, Ugur Mak.San. Gida Ins.Taah.End.Yap.Trz.Tarim Dis Tic.Ltd.Sti., Valagro Spa, Safco, and Sparkler Far East.
SAARC OILS & FATS Today March 2013
sinking or swimming? Fills oil - box with mixed reactions
he Union Budget 2013-14 presented recently by Finance Minister P. Chidambaram may have deeply disappointed many commodity market participants – both physical and derivatives – who nursed high hopes that their hectic lobbying will pay-off. Yet, the Finance Minister has done a fine balancing act by attempting to raise revenue even while ensuring that fiscal imposts do not raise inflationary pressures. For the commodity market, the highpoint of the Budget would of course be the levy of commodity transaction tax on derivatives trading. The tax rate of 0.01 per cent of the transaction value is nominal and translates to Rs 10 for Rs 1,00,000 transaction. Agricultural commodities have been granted exemption from CTT. The daily turnover of non-agricultural commodities covering mainly gold and silver as well as other metals and energy products on the futures exchanges is about Rs 45,000 crore. The exchequer will end up earning roughly Rs 4.5 crore for a trading day, which, on an annual basis, will become a sizeable sum of Rs 1,500 crore. Surely, CTT is not merely a revenue measure, but is also an attempt to curb rampant paper trading or speculative transactions (as opposed to hedging) on the futures
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exchanges. Levy of CTT will also provide an audit trail, something the market participants have been averse to. As a palliative, it has been clarified that trading in commodity derivatives will not be considered as a ‘speculative transaction’ and CTT shall be allowed as deduction if the income from such transactions forms part of business income. Rightly so, the FM has exempted agricultural futures from the levy of CTT. Even here, a blanket exemption could
have been avoided. Exemption ought to have been restricted to really essential food crops and products (with high weightage in the consumer price index) such as wheat, sugar, soyabean oil, chana and similar items. On the physical market side, the FM has refused to entertain the strong demand made by the vegetable oil trade and industry for a further hike in customs duty on imported oils such as palm oil. He has withdrawn the customs duty imposed on export of rice bran extraction.
Industry Viewpoin ts
No relief on import duty structure Dinesh Shahra, MD, Ruchi Soya Industries Ltd
hrust on the rural and infrastructure development has brought cheers for agro-based companies like ours. Total withdrawal of export duty on de-oiled rice bran oil cake will help the industry as such a duty had made our exports uncompetitive. Non-inclusion of agro commodities for the CTT on commodities trading again will help the sector. Setting up storage tanks, silos, go-downs in rural sector will certainly boost agriculture sector in India. Higher allocation to agriculture and rural sector
and investment allowance at the rate of 15 per cent on investment in plant and machinery made after April 01 will also boost the industry. However, edible oil extraction industry was disappointed as no relief was provided to do away with the import duty structure anomalies on the crude and refined palm oil. We were expecting the Finance Minister to raise import duty on crude palm oil to 10 per cent and refined palmolein to 20 per cent thus maintaining a healthy differential of 10 per cent that
could have benefited farmers and the domestic refining industry. The industry as a whole has invested over Rs 5,000 crore and employs over 5, 00,000 people. How can an industry continue to make investments if its plans are upset by such sudden changes in policy? These changes suddenly cause us to review our overall strategy. We have to go straight back to the drawing board and revaluate our business plans and suddenly many of these look unviable.
Economic Survey 2013
Price band on edible oils can balance interests T
he Economic Survey has a made a case for creating a price band for edible oils through levy of appropriate import duty. Such a move will help balance the interests of domestic farmers, processors and consumers. India, despite being a large producer of oilseeds, depends heavily on imports to meet half its edible oil requirements. Output of oilseeds has not kept pace with the rising demand for edible oils. Import dependence has increased from 3 per cent to 50 per cent in the past two decades. Total edible oil imports stood at 9.8 million tonnes in 2011-12, with an import bill of $9.5 billion, and are expected to cross 11.5 million tonnes this year. Calibration The Survey said calibration of the import duty structure would help
promote domestic production of oilseeds. The high level of imports are primarily because of competitive prices of edible oils in the international market, aided by the prevailing low import duty structure to protect consumers. “India has a market share that allows it to set some independent tariff policy. Considering the situation, it is time to frame a price band for edible oils in a manner that harmonises the interests of domestic farmers, processors, and consumers through imposition of import duty at an appropriate rate,” the Survey said. Revenues Besides, the import duty will also generate revenues, which can be utilised for an oilseeds development programme. The edible oil industry has been demanding a hike in import
duty on refined oils as a low duty structure has threatened the viability of domestic refineries. Refined oils attract a duty of 7.5 per cent, while a 2.5 per cent levy has been imposed on the crude palm oil imports recently. The Government recently hiked the tariff value on all edible oils, which had remained unchanged since 2006. “This is a right step for aligning the tariffs to current prices of edible oils in the international market,” the Survey said. Such a move would also help the domestic production of oil palm. n
SAARC OILS & FATS Today March 2013
Industry Viewpoin ts
Oilseeds & Vegetable Oil Industry disappointed Vijay Data, President, SEA
he Union Budget presented today by the Finance Minister has disappointed Indian Vegetable oil industry. It is unfortunate that Honourable Finance Minister has not proposed any new measures to reduce our dependence on burgeoning imports of edible oils. There is no change in duty for import of vegetable oils. The industry had demanded to raise import duty on CPO from 2.5% to 10% and RBD Olein from 7.5% to 20% and maintain the duty difference of 10% to safeguard the interest of domestic farmers and
refiners. Hon’ble Minister had said in the beginning of his speech that Food Inflation is worrying him and blamed that Oilseed, pulses supply-demand mismatch pushes the inflation. However, no specific measures were suggested to increase production and productivity of oilseeds in the country. Finance Minister is more concern about the inflation and therefore, he had choosen not to increase import duty on edible oil and decided to maintain the status quo. Sufferers will be the Rapeseed’s poor farmers, as under pressure from falling prices of Palm oil, Rapeseed prices have fallen from Rs. 4200
per quintal at the time of sowing to Rs. 3550 per quintal at present and may go down further with the arrival pressure and touch MSP of Rs. 3000 per quintal. This will discourage farmers to continue to grow oilseeds and may switch over to other crops and our dependance on imports of Vegetable oil will further increase. On a positive note, the Finance Minister has accepted our request and withdrawn 10% export duty on Deoiled rice bran. This will give some relief to the Solvent Extraction units processing Rice Bran in West Bengal.
Commodity players’ interest ignored Kishore Narne, Associate Dir. Head - Commodity & Currency -Motilal Oswal Commodity Broker
he budget has been a disappointment for commodities markets. With the imposition of CTT, the Government has broken the back of the market which is struggling to stand on its own feet amidst inept regulation and lack of wider participation and competition from the illegal markets. Commodities market in India is still in a nascent stage, in comparison with equity markets that have wider participation from all sections of investors and institutions , diversified instruments. Commodity Derivatives are primarily
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used as “hedging instruments” therefore; any additional levy on transaction will have negative impact on “hedging efficiency” and distort price discovery mechanism. Imposition of CTT not only negates the advantage of low cost hedging platform but also takes away revenue stream from State Governments. Whenever, commodities are traded/ hedged on an exchange, they come under tax net as VAT is paid on such transactions. CTT will raise cost of such transactions, thereby leading to
migration of volumes to unregulated and illegal ‘Dabba’ markets and cause revenue loss to the exchequer and create other problems as these trades will not be monitored or regulated. The only positive outcome out of this budget, for the commodity markets is that the classification of the transactions on commodity markets would not be considered as “Speculative Transaction”, by which it would facilitate to offset the profits or losses arising out of hedging against the business income.
SAARC OILS & FATS Today March 2013
Nichrome’s Filpack Servo SMD for Oil – High Speed, Accurate and Hygienic
ichrome presents its High Speed Oil packing solution – Filpack Servo SMD, the only double head machine in the market with an output of 70-80 packs/min. It saves the manpower as only a single operator is required for double output. This machine is PLC Controlled, Servo driven and is equipped with operator friendly touch screen. It has Motorized Web Tracking, Jumbo film roll Trolley and is capable to run on 320 mm web width as compared to existing 325mm web width. This Filpack Servo SMD can pack Edible oils, Ghee, Vanaspati and also a variety of viscous products such as Tomato puree, Mango pulp, Fresh cream, Shrikhand, Mayonnaise and many more.
SAARC OILS & FATS Today March 2013
Nichrome, the pioneer and leader in VFFS packaging since 1977, has been the packaging partner of the food and non-food manufacturing companies, by supplying packaging machines designed to meet their exact needs for over three decades, With over 5000 installations in 40 countries worldwide, Nichrome is considered as the reliable partner in Packaging by its customers. Along with VFFS range for solids, liquids and powders, Nichrome also offers VFFS Multilane technology with technical collaboration with ProdoPak, USA and HFFS packaging machines with technical collaboration with TOTPACK, Spain for Dairy, Food, Cosmetics, Pharma and chemicals.
SAARC OILS & FATS Today March 2013
Health and Nutritional Benefits from
Coconut Oil and its Advantages Over Competing Oils – Mary G. Enig, Ph.D., F.A. C.N.
wo important areas will be covered in this paper. In the first part, a review of the major health challenge facing coconut oil today has been included. This challenge is based on a supposed negative role played by saturated fat in heart disease. It is proposed to dispel any acceptance of this notion with the information that will be presented here. In the second part some new directions where important positive health benefits are seen for coconut oil are suggested. These benefits stem from coconut oilís use as a food with major antimicrobial and anti-cancer benefits. The rationale for this effect and some of the literature will be reviewed here. The health and nutritional benefits derived from coconut oil are unique and compelling. They are under-appreciated today by both the producer and the consumer. Better recognised are the functional advantages coconut oil has, over competing oils, in many food products. Historically, coconuts and their extracted oil have served man as important foods for thousands of years. The use of coconut oil as a shortening was advertised in the United States in popular cookbooks at the end of the 19th century. Note that both the healthpromoting attributes of coconut oil and those functional properties useful to the house maker were recognized 100 years ago. These same attributes, in addition to some newly discovered ones, should be of great interest to both the producing countries as well as the consuming countries. Origins of the Diet/ Heart Hypothesis The literature of epidemiological studies usually attribute an in-creased risk of coronary heart disease (CHD)
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to elevated levels of serum cholesterol, which in turn are thought to be derived from a dietary intake of saturated fats and cholesterol. But, saturated fats may be considered a major culprit for CHD only if the links between serum cholesterol and CHD, and between saturated fat and serum cholesterol are each firmly established. Decades of large scale tests and conclusions there from have purported to establish the first link. In fact, this relationship has reached the level of dogma. Through the years metabolic ward and animal studies have claimed that dietary saturated fats increase serum cholesterol levels, thereby supposedly establishing the second link. But the scientific basis for these relationships has now been challenged as resulting from large scale misinterpretation and misrepresentation of the data. (Enig 1991, Mann 1991, Smith 1994, Rvnskov 1995). Ancel Keys is largely responsible for starting the anti-saturated fat agenda in the United States. From 1953 to 1957 Keys made a series of statements regarding
the atherogenicity of fats. These pronouncements were: ìAll fats raise serum cholesterol; Nearly half of total fat comes from vegetable fats and oils; No difference between animal and vegetable fats in effect on CHD (1953); Type of fat makes no difference; Need to reduce margarine and shortening (1956); All fats are comparable; Saturated fats raise and polyunsaturated fats lower serum cholesterol; Hydrogenated vegetable fats are the problem; Animal fats are the problem (19571969).î As can be seen, his findings were inconsistent. What about the role of edible oil industry in promoting the diet/ heart hypothesis?It is important to realise that at this time (1960s) the edible oil industry in the United States seized the opportunity to promote its polyunsaturates. The industry did this by developing a health issue focusing on Keyís anti-saturated fat bias. With the help of the edible oil industry lobbying in the United States, federal government dietary goals and
coconut guidelines were adopted incorporating this mistaken idea that consumption of saturated fat was causing heart disease. This anti-saturated fat issue became the agenda of government and private agencies in the US and to an extent in other parts of the world. This is the agenda that has had such a devastating effect on the coconut industry for the past decade. Throughout the 1960s, the 1970s and the 1980s the anti-saturated fat rhetoric increased in intensity. An editorial by Harwardís Walter Willett, M.D. in the American Journal of Public Health (1990) acknowledged that even though ìthe focus of dietary recommendations is usually a reduction of saturated fat intake, no relation between saturated fat intake and risk of CHD was observed in the most informative prospective study to date. Another editorial, this time by Framinghamís William P. Castelli in the Archihives of Internal Medicine (1992), declared for the record that in Framingham, Mass, the more saturated fat one ate, the more cholesterol one ate, the more calories one ate, the lower the personís serum cholesterol the opposite of what the equations provided by Hegsted et al (1965) and Keys et al (1957) would predict. Castelli further admitted that in Framingham, for example, we found that the people who ate the most cholesterol, ate the most saturated fat, ate the most calories,weighted the least, and were the most physically active. Coconut oil and the diet/heart hypothesis For the past several decades animal and human studies feeding coconut oil have purportedly showed increased indices for cardiovascular risk. Blackburn et a1 (1988) have reviewed the published literature of ìcoconut oilís effect on serum cholesterol and atherogenesisî and have concluded that when [coconut oil is] fed physiologically with other fats or adequately supplemented with linoleic acid, coconut oil is a neutral fat in terms of atherogenicity. The question then is, how did coconut oil get such a negative reputation? The answer quite simply is, initially, the significance of those changes that occurred during animal feeding studies were misunderstood. The wrong interpretation was then repeated until ultimately the misinformation and disinformation took on a life of its own. The problems for coconut oil started four decades ago when re-searchers fed animals hydrogenated coconut oil
that was purposefully altered to make it completely devoid of any essential fatty acids. The hydrogenated coconut oil was selected instead of hydrogenated cottonseed, corn or soybean oil because it was a soft enough fat for blending into diets due to the presence of the lower melting medium chain saturated fatty acids. The same functionality could not be obtained from the cottonseed, corn or soybean oils if they were made totally saturated, since all their fatty acids were long chain and high melting and could not be easily blended nor were they as readily digestible. The animals fed the hydrogenated coconut oil (as the only fat source) naturally became essential fatty acid deficient; their serum cholesterol levels increased. Diets that cause an essential fatty acid deficiency always produce an increase in serum cholesterol levels as well as an increase in the atherosclerotic indices. The same effect has also been seen when other essential fatty acid deficient, highly hydrogenated oils such as cottonseed, soybean or corn oils have been fed; so it is clearly a function of the hydrogenated product, either because the oil is essential fatty acid (EFA) deficient or because of trans fatty acids (TFA). What about the studies where animals were fed with unprocessed coconut oil? Hostmark et al (1980) compared the effects of diets containing 10 per cent coconut fat and 10 per cent sunflower oil on lipoprotein distribution in male Wistar rats. Coconut oil feeding produced significantly lower levels (p = <0.05) of pre-beta lipoproteins (VLDL) and significantly higher (p = <0.01) alphalipoproteins (HDL) relative to sunflower oil feeding. Awad (1981) compared the effects of diets containing 14 per cent coconut oil, 14 per cent safflower oil or a 5 per cent ìcontrolî (mostly soybean) oil on accumulation of cholesterol in tissues in male Wistar rats. The synthetic diets had 2 per cent added corn oil with a total fat of 16 per cent. Total tissue cholesterol accumulation for animals on the safflower diet was six times greater than for animals fed the coconut oil, and twice that of the animals fed the control oil. A conclusion that can be drawn from some of this animal research is that feeding hydrogenated coconut oil devoid of essential fatty acids (EFA) in a diet otherwise devoid of EFA leads to EFA deficiency and potentiates the formation of atherosclerosis markers. It is of note that animals fed regular coconut oil
have less cholesterol deposited in their livers and other parts of their bodies. What about the studies where coconut oil is part of the normal diet of human beings? Kaunitz and Dayrit (1992) have reviewed some of the epidemiological and experimental data regarding coconut-eating groups and noted that the ìavailable population studies show that dietary coconut oil does not lead to high serum cholesterol nor to high coronary heart disease mortality or morbidity. They noted that in 1989 Mendis et al reported undesirable lipid changes when young adult Sri Lankan males were changed from their normal diets by the substitution of corn oil for their customary coconut oil [Table 1]. Although the total serum cholesterol decreased 18.7 per cent from 179.6 to 146.0 mg/dl and the LDL cholesterol decreased 23.8 per cent from 131.6 to 100.3 mg/dl, the HDL cholesterol decreased 41.4 per cent from 43.4 to 25.4 mg/dl (putting the HDL values below the accept-able lower limit) and the LDL/ HDL ratio increased 30 per cent from 3.0 to 3.9. These later two changes would be considered quite undesirable. Previously, Prior et al (1981) had shown that islanders with high in-take of coconut oil showed no evidence of the high saturated fat intake having a harmful effect in these populations. When these groups migrated to New Zealand however, and lowered their intake of coconut oil, their total cholesterol and LDL cholesterol increased, and their HDL cholesterol decreased. Some of the studies where coconut oil was the major dietary fat source reported thirty and more years ago should have cleared coconut oil of any implication in the development of coronary heart disease (CHD). For example, when Frantz and Carey (1961) fed an additional 810 kcal/ day fat supplement for a whole month to males with high normal serum cholesterol levels, there was no significant difference from the original levels even though the fat supplement was hydrogenated coconut oil. Halden and Lieb (1961) also showed similar results in a group of hypercholesterolemics when coconut oil Table 1. Substituting corn oil for coconut oil Total cholesterol LDL cholesterol HDL cholesterol LDL/HDL ratio
18.7 % 23.8% 41.4% 30%
Adapted from Mendis et al (1989)
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coconut was included in their diets. Original serum cholesterol levels were reported as 170 to 370 mg/dl. Straight coconut oil produced a range from 170 to 270 mg/dl. Coconut oil combined with 5 per cent sunflower oil and 5 per cent olive oil produced a range of 140 to 240 mg/dl. Earlier, Hashim and colleagues (1959) [Table 2] had shown quite clearly that feeding a fat supplement to hypercholesterolemics, where half of the supplement (21 per cent of energy) was coconut oil (and the other half was safflower oil), resulted in significant reduction in total serum cholesterol. The reductions averaged -29 per cent and ranged from -6.8 to -41.2 per cent. And even earlier, Ahrens and colleagues (1957) had shown that adding coconut oil to the diet of hypercholesterolemics lowers serum cholesterol from 450 mg/ dl to 367 mg/dl. This is hardly a cholesterol-raising effect. Bierenbaum et al (1967) followed 100 young men with documented myocardial infarction for 5 years on diets with fat restricted to 28 per cent of energy. There was no significant difference between the two different fat mixtures (50/ 50 corn and safflower oils or 50/50 coconut oil and peanut oils), which were fed as half of the total fat allowance; both diets reduced serum cholesterol. This study clearly showed that 7 per cent of energy as coconut oil was as beneficial to the 50 men who consumed it as for the 50 men who consumed 7 per cent of energy as other oils such as corn oil or safflower. Both groups fared better than the untreated controls. More recently, Sundram et al (1994) fed whole food diets to healthy normocholesterolemic Adapted from Sundaram et al (1994) a decrease in low density lipoprotein cholesterol (LDLC) from 105.2 to 104.4 mg/dl (-0.1%), an increase in high density lipoprotein cholesterol (HDL-C) from 42.9 to 45.6 mg/ dl (+6.3%). There was a 2.4% decrease Table 2. Effect of feeding 50 percent of fat ration as coconut oil (21 % of energy) to 10 adult male hypercholesteromics
Serum cholesterol Mg/dl Before added fat
Serum cholesterol Mg/dl After coconut oil
364 358 353 336 315 416 348 331 489 310 Mean 362
214 272 281 240 198 274 245 265 361` 289 256
-41.2 -24.0 -20.4 -28.6 -37.1 -34.1 -29.6 -19.9 -26.2 -6.8 -29.3
Adaptd from Hashim et al (1959)
SAARC OILS & FATS Today March 2013
in the LDL-C/HDL-C ratio from 2.45 to 2.39. These findings indicate that a favourable alteration in serum lipoprotein balance was achieved when coconut oil was included in a whole food diet at 5 per cent of energy. Tholstrup et al (1994) report similar results with whole foods diets high in lauric and myristic acids from palm kernel oil. The HDL cholesterol levels increased significantly from baseline values (37.5 to 46.0 mg/dl, P<0.01) and the LDL-C/HDL-C ratios decreased from 3.08 to 2.69. The increase in total cholesterol was from 154.7 (baseline) to 170.9 mg/dl on the experimental diet. Ng et al (1991) fed 75 per cent of the fat ration as coconut oil (24 per cent of energy) to 83 adult normocholesterolemics (61 males and 22 females). Relative to baseline values, the highest values on the experimental diet for total cholesterol was increased 17 per cent (169.6 to 198.4 mg/dl), HDL cholesterol was increased 21.4 per cent (44.3 to 53.8 mg/dl), and the LDL-C/ HDL-C ratio was decreased per cent (2.51 to 2.42). When unprocessed coconut oil is added to an otherwise normal diet, there is frequently no change in the serum cholesterol although some studies have shown a decrease in total cholesterol. For example, when Ginsberg et al provided an Average American diet with 2-3 times more myristic acid (C14:0), times more lauric acid (C12:0), and 1.2 times more palmitic and stearic acid (C16:0 and C18:0) than their ìMono [unsaturated] î diet and the National Cholesterol Education Program ìStep 1î diet, there was no increase in serum cholesterol, and in fact, serum cholesterol levels for this diet group fell approximately 3 per cent from 177.1 mg per cent to 171.8 mg percent during the 22 week feeding trial. It appears from many of the research reports that the effect coconut oil has on serum cholesterol is the opposite in individuals with low serum cholesterol values and those with high serum values. There may be a rising of serum total cholesterol, LDL cholesterol and especially HDL cholesterol in individuals with low serum cholesterol. On the other hand there is lowering of total cholesterol and LDL cholesterol in hypercholesterolemics as noted above. Studies that supposedly showed a ìhypercholesterolemicî effect of coconut oil feeding, in fact, usually only showed that coconut oil was not as effective at lowering the serum cholesterol as was the more unsaturated fat being compared. This appears to be in part because coconut oil does not ìdriveî cholesterol into the tissues as does the more polyunsaturated
fats. As noted in Table 5 analysis of the atheroma shows that the fatty acids from the cholesterol esters are 74 per cent unsaturated (41 per cent is polyunsaturated) and only 24 per cent are saturated. None of the saturated fatty acids were re-ported to be lauric acid or myristic acid (Felton et al, 1994). There is another aspect to the coronary heart disease picture. This is related to the initiation of the atheromas that are reported to be blocking arteries. Recent research is suggestive that there is a causative role for the herpes virus and cytomegalovirus in the initial formation of atherosclerotic plaques and the recloging of arteries after angioplasty (New York Times 1991). What is so interesting is that the herpes virus and cytomegalovirus are both inhibited by the antimicrobial lipid monolaurin; but monolaurin is not formed in the body unless there is a source of lauric acid in the diet. Thus, ironically enough, one could consider the recommendations to avoid coconut and other lauric oils as contributing to the increased incidence of coronary heart disease. Perhaps more important than any effect of coconut oil on serum cholesterol is the additional effect of coconut oil on the disease fighting capability of the animal or person consuming the coconut oil. Coconut Oil and Cancer Lim-Sylianco (1987) has reviewed 50 years of literature showing anticarcinogenic effects from dietary coconut oil. These animal studies show quite clearly the nonpromotional effect of feeding coconut oil. In a study by Reddy et al (1984) straight coconut oil was more inhibitory than MCT oil to induction of colon tumors by azoxymethane. Chemically induced adenocarcinomas differed 10-fold between corn oil (32 per cent) and coconut oil (3 per cent) in the colon. Both olive oil and coconut oil developed the low levels (3 per cent) of the adenocarcinomas in the colon, but in the small intestine animals fed coconut oil did not develop any tumors while 7 per cent of animals fed olive oil did. Studies by Cohen et at (1986) showed that the non promotional effects of coconut oil were also seen in chemically induced breast cancer. In this model, the slight elevation of serum cholesterol in the animals fed coconut oil was protective as the animals fed the more polyunsaturated oil had reduced serum cholesterol and more tumors. The authors noted that an overall inverse trend was observed between total serum lipids and tumor
coconut incidence for the 4 [high fat] groups. This is an area that needs to be pursued. Coconut Oil Antimicrobial benefits I would now like to review some of the rationale for the use of coconut oil as a food that will serve as the raw material to provide potentially useful levels of antimicrobial activity in the individual. The lauric acid in coconut oil is used by the body to make the same disease-fighting fatty acid derivative monolaurin that babies make from the lauric acid they get from their mothersí milk. The monoglyceride monolaurin is the substance that keeps infants from getting viral or bacterial or protozoal infections. Until just recently, this important benefit has been largely overlooked. Recognition of the antimicrobial activity of the monoglyceride of lauric acid (monolaurin) has been reported since 1966. The seminal work can be credited to Jon Kabara. This early research was directed at the virucidal effects because of possible problems related to food preservation. Some of the early work by Hierholzer and Kabara (1982) that showed virucidal effects of monolaurin on enveloped RNA and DNA viruses was done in conjunction with the Center for Disease Control of the US Public Health Service with selected prototypes or recognized representative strains of enveloped human viruses. The envelope of these viruses is a lipid membrane. Kabara (1978) and others have reported that certain fatty acids (e.g., medium-chain saturates) and their derivatives (e.g., mono-glycerides) can have adverse effects on various microorganisms: those micro-organisms that are inactivated include bacteria, yeast, fungi, and enveloped viruses. The medium-chain saturated fatty acids and their derivatives act by disrupting the lipid membranes of the organisms (Isaacs and Thormar 1991; Isaacs et al 1992). In particular, enveloped viruses are inactivated in both human and bovine milk by added fatty acids (FAs) and monoglycerides (MGs) (Isaacs et al 1991) as well as by endogenous FAs and MGs (Isaacs et al 1986,1990,1991,1992; Thormar et al 1987). All three monoesters of lauric acid are shown to be active antimicrobials, i.e.O, -, Oí-, and 13-MG. Additionally, it is reported that the antimicrobial effects of the FAs and MGs are additive and total concentration is critical for inactivating viruses (Isaacs and Thormar 1990). The properties that determine the anti-infective action of lipids are related to their structure; e.g., monoglycerides, free fatty acids. The monoglycerides are
active, diglycerides and triglycerides are inactive. Of the saturated fatty acids, lauric acid has greater antiviral activity than either caprylic acid (C-10) or myristic acid (C-14). The action attributed to monolaurin is that of solubilizing the lipids and phospholipids in the envelope of the virus causing the disintegration of the virus envelope. In effect, it is reported that the fatty acids and monoglycerides produce their killing/inactivating effect by lysing the (lipid bilayer) plasma membrane. However, there is evidence from recent studies that one antimicrobial effect is related to its interference with signal transduction (Projan et al 1994). Some of the viruses inactivated by these lipids, in addition to HIV, are the measles virus, herpes simplex virus-1 (HSV-1), vesicular stomatitis virus (VSV), visna virus, and cytomegalovirus (CMV). Many of the pathogenic organisms reported to be inactivated by these antimicrobial lipids are those known to be responsible for opportunistic infections in HIV-positive individuals. For example, concurrent infection with cytomegalovirus is recognized as a serious complication for HIV + individuals (Macallan et al 1993). Thus, it would appear to be important to investigate the practical aspects and the potential benefit of an adjunct nutritional support regimen for HIV infected individuals, which will utilize those dietary fats that are sources of known antiviral, antimicrobial, and antiprotozoal monoglycerides and fatty acids such as monolaurin and its precursor lauric acid. No one in the mainstream nutrition community seems to have recognized the added potential of antimicrobial lipids in the treatment of HIV-infected or AIDS patients. These antimicrobial fatty acids and their derivatives are essentially non-toxic to man; they are produced in vivo by humans when they ingest those commonly available foods that contain adequate levels of medium-chain fatty acids such as lauric acid. According to the published research, lauric acid is one of best ìinactivatingî fatty acids, and its monoglyceride is even more effective than the fatty acid alone (Kabara 1978, Sands et al 1978, Fletcher et al 1985, Kabara 1985). Increasingly, over the past 40 years, the American diet has undergone major changes. Many of these changes involve changes of fats and oils. There has been an increasing supply of the partially hydrogenated trans-containing vegetable oils and a decreasing amount of the lauric acid containing oils. As a result, there
has been an increased consumption of trans fatty acids and linoleic acid and a decrease in the consumption of lauric acid. This type of change in diet has an effect on the fatty acids the body has available for metabolic activities. The lipid coated (envelop) vi-ruses are dependent on host lipids for their lipid constituents. This accounts for the variability of fatty acids in the virus envelop and also explains the variability of glycoprotein expression. Lauric Acid in Foods In the United States today, there is very little lauric acid in most of the foods. Until a year ago, some of the commercially sold popcorn, at least in movie theaters, had coconut oil as the oil. This means that for those people lucky enough to consume this type of popcorn the possible lauric acid intake was 6 grams or more in a three (3) cup order. Some infant formulas (but not all) are still good sources of lauric acid for infants. Only one enteral formula contains lauric acid (e.g., Impact); this is normally used in hospitals for tube feeding. The more widely promoted enteral formulas (e.g., Ensure) are not made with lauric oils and in fact, many are made with partially hydrogenated oils. There are currently some candies sold in the US that are made with palm kernel oil. These can supply small amounts of lauric acid (e.g., Andes, KitKat). Cookies such as macaroons, if made with desiccated coconut, are good sources of lauric acids, but they make up a small portion of the cookie market. Most cookies in the United States are no longer made with coconut oil shortenings; however, there was a time when many US cookies (eg. Pepperidge Farm) were about 25 per cent lauric acid. Originally, one of the largest manufacturers of cream soups used coconut oil in the formulation. Many popular cracker manufacturers also used coconut oil as a spray coating. These products supplied a small amount of lauric acid on a daily basis for some people. It is not known exactly how much food made with lauric oils is needed in order to have a protective level of lauric acid in the diet. Infants probably consume between 0.3 and 1g/kg of body weight if they are fed human milk or an infant formula that contains coconut oil. (The Author is the Director, Nutritional Sciences Division, Enig Associates Inc., Maryland, USA. Courtesy: Coconut Development Board of India)
SAARC OILS & FATS Today March 2013
Quality norms deserve to be tightened – G. Chandrashekhar
ith 60 lakh tonnes import, India may be the world’s single largest importer of crude palm oil (CPO), but most suppliers at the origin — Indonesia and Malaysia — refuse to respect the dictum ‘customer is king’. Especially in recent months, a significant part of crude palm oil dispatched to India and cleared through various ports on the east and the west coast is suspected to be actually substandard with high peroxide value and poor bleaching quality. Quality falling below normal acceptable standards is the result of storage of the liquid oil over long periods of time which leads to oxidation. With crude palm oil exports trailing production, inventory at the production centres has been burgeoning for the last several months. Conditions of storage as well as length of the storage period impact peroxide value of the oil. According to oil technologists, higher peroxide value results in rancidity. We
SAARC OILS & FATS Today March 2013
may have often noticed coconut oil turning rancid when stored for a length of time. Palm oil is no different. There is also the issue with free fatty acid (FFA). The maximum FFA limit specified is five per cent. However, if FFA in CPO is found to be over five per cent, the supplier blends a certain volume of refined palm oil with CPO so as to bring the FFA level down to the acceptable limit. This seems to have become a normal trade practice. A number of small and not so small importers have confided that there indeed is a problem with the quality of imported crude palm oil. They rued that any complaint with the supplier was shot down with a standard reply saying there was no contractual specification for peroxide value or bleachability index, known as DOBI value. So, small importers are forced to accept low quality consignment without any legal recourse. Sub-standard oil raises the cost of refining and forces refiners here to compromise on quality. This goes against consumer interest. The question is whether overseas suppliers thrust sub-standard palm oil on India or whether Indian importers are a willing accomplice in this sordid game of poor quality palm oil supplies at a time when stocks overseas are exploding and prices sliding down rapidly. It could be both, as some argue. Unfortunately,
India’s industry and trade associations that are often vocal in demanding tariff and duty protection fail to remedy the genuine issues confronting the import trade. A corporate executive mentioned that the big boys engaged in palm oil import must surely be aware of the quality issue; but have remained indifferent for reasons best known to them. On the other hand, another large Asian importer China has already tightened the quality norms for imported foods including palm oil. In China, imported cargoes that do not meet the specified stringent quality standards will be rejected at the port of entry itself. This has not just upset but actually unnerved Malaysian and Indonesian suppliers who scurry to meet the stringent Chinese stipulations. As a nation, India seems to be not bothered at all about the quality of imported foods. We spend as much as $6 billion (over Rs 30,000 crore) for importing palm oil whose quality we don’t care much about. Unfortunately, in our country, liberalisation is interpreted as a licence to do whatever one wants. Quality specifications for imported crude palm oil deserve to be reviewed and tightened immediately. Also, it is necessary to tighten border control measures. Indian Customs authorities and port health organisations should ensure that the consumers are not shortchanged. The Union Ministries of Food, Health and Commerce must move in quickly together to tighten quality norms and put supplier countries on notice. Import contract terms must be amended to protect Indian interest. n
SAARC OILS & FATS Today March 2013
News Record Import of Vegetable Oils
mport of edible oil is rising at alarming level and has set a new record during January 2013, the highest import in a single month since import opened in 1994. Import during January jumped by 75% and touched 11.6 lakh tonnes compared to 6.6 lakh tonnes in January, 2012. In the first quarter of oil year 201213 (Nov.12 to Jan. 13), is up by 27% and reached at 27.7 lakh tonnes compared to 21.9 lakh tonnes during the same period of last year. Also, due to inverted export
duty structure by Indonesia and Malaysia and further reduction of duty difference from 7.5% to 5% by Government of India, pushed the import of RBD palmolein and have witnessed the record import of 1.53 lakh tonnes of RBD palmolein during January, 2013, seriously affecting the domestic refiners’ capacity utilization. Currently, Malaysia and Indonesia have huge palm oil stocks of 6.0 million tonnes. In order to get rid of these excessive stock, they are aggressively
pushing their exports into India, thereby depressing the local prices. SEA has brought to the notice of the Government this serious development and its impact on our farmers and domestic refiners and pleaded for remedial measures to counter the same. Let us hope, the Union Government will take appropriate action in the Budget, including revision of import duty on crude and edible oils with duty difference of 10% between crude and refined oils.
Edible Oil imports to go up record level
ooking oil imports by India, the world’s biggest palm oil buyer, will probably climb to a record this year as demand outstrips supplies, said Adani Wilmar Ltd.Purchases in the year through October are set to exceed the 9.98 million tonne in 2011-2012, according to Atul Chaturvedi, chief executive officer of the country’s second- biggest importer. Buying surged 26% in the three months through January, the Solvent Extractors’ Association of India estimates. Increasing purchases may trim inventories in Malaysia and Indonesia, the largest producers, and bolster benchmark futures in Kuala Lumpur, which slumped to a five-week low on Tuesday. Expanding demand in India may counter the impact of an increase in import taxes and higher export duties in Indonesiaand Malaysia, said Chaturvedi. “The quantum of imports is basically a function of supply and demand,” he said in a phone interview from Ahmedabad. “Whatever the price, it will get imported if there is a requirement in the country. Whether you like it or not, vegetable oil is an essential commodity.”
SAARC OILS & FATS Today March 2013
India meets more than 50% of its cooking oil demand through imports of mostly palm from Indonesia and Malaysia, and soyabean oil from Brazil and Argentina. Demand will expand 6% to 17.5 million tonne this year due to rising population and disposable incomes, said BV Mehta, executive director of the extractors’ association. Consumption may surge to 23 million tonne by 2020, and imports will rise significantly to meet this demand, D Bhalla, a joint secretary at food ministry said in September. The annual per-capita usage in the country is 13.5 kg, compared with the global average of about 26 kg, he said. Palm oil for May delivery advanced as much as 1% to 2,443 ringgit ($788) a tonne on the Malaysia Derivatives Exchange on Wednesday, before ending 0.4% lower at 2,410 ringgit. Futures fell to a three-year low of 2,217 ringgit on December 13 as stockpiles in the main producers climbed to a record. Inventories in Malaysia jumped to an alltime high of 2.63 million tonne in December, before falling to 2.58 million tonne last
month, according to the palm oil board. The country introduced duty-free shipments from January 1 to clear the holdings and will boost the tariff to 4.5% in March. Indonesia raises its tax to 10.5% from 9%. India may increase taxes on imports to shield farmers from cheap supplies, according to the extractors’ group. Finance Minister P Chidambaram may raise the tariff on unprocessed oils to 10% from 2.5% in the Budget, while the tax on refined varieties could increase to 20% from 7.5%, it said last week. The government imposed a 2.5% tax on unprocessed oils for the first time since 2008 last month. Oilseed output in India will be little changed at 29.5 million tonne in the year ending June 30, from 29.8 million tonne a year earlier, agriculture ministry said on February 8. Production of rapeseed, the biggest oilseed crop grown in the winter season, is estimated to climb 20% this year to 7.1 million tonne, the extractors’ association said earlier. “If we have a bumper rapeseed crop, that might bring some sobriety in imports, but it’s early days yet,” Chaturvedi said.
News Tirumala to create gene bank of indigenous cows
ith the indigenous cow race facing threat from high-yielding foreign breed, the Tirumala-Tirupati Devasthanams (TTD) has decided to set up an exclusive gene bank for pure native breed cows. “We have readied a detailed proposal. We are keen to start this bank this year,” L.V. Subrahmanyam, Executive Officer of TTD, said.
He said the milk from the crossbreed cows is posing health problems, while the milk from indigenous cows is very healthy. “We will further conduct research on this at the proposed gene bank coming up at Palamaner in Chittoor district. It will come up in an area of 600 acres,” he said. In association with some Jain group,
the TTD will also set up cow protection centres in all districts of Andhra Pradesh. “These centres will take care of the ageing cows till their death. The scriptures have laid down the procedures on how to take care of the cows after they stopped giving milk,” he said.
Dairy Farmers in AP want to replicate Amul
mall dairy farmers in Andhra Pradesh have decided not to depend on the corporate milk firms to sell their produce. After the recent milk glut that resulted in huge losses, farmers have resolved to form a cooperative to procure milk, process it and market the same by creating its own brand. To begin with, a group of 25 farmers will form the cooperative in the State capital. “The milk firms pay us just Rs 17 a litre but sell it at Rs 36 to the consumer. We are perennially facing losses. We will start the cooperative in the next few weeks,” K. Bal Reddy, a dairy farmer from Bhongir in Nalgonda district with about 500 animals, said. Andhra Pradesh has about 40 lakh dairy farmers, small and big, who are
by and large unorganised. With a cattle population (cows and buffaloes) of 2.45 crore, the State produces 12.1 million tonnes of milk comprising 10 per cent of country’s annual production of 122 million tonnes. Only 30 per cent of the 12.1 million tonnes of milk is procured by organised players such as Vijaya-Visakha, Heritage, Tirumala and Jersey dairies. About two months ago, the private dairies had either stopped or significantly reduced milk procurement owing to a glut. This had led to panic selling by farmers. In several towns, some even dumped the produce on roads as a mark of protest. “Neither the consumers nor the producers are getting any benefit. The
companies are making money. We can’t run the show like this for long. So, we floated the idea. The response has been good from members. We know that change cannot happen overnight,” Bal Reddy, who is also Secretary of Progressive Dairy Farmers’ Association (PDFA), said. On the milk firms’ argument that the cost of production forced them to fix a cap on purchase price, Bal Reddy said Mulkanur Cooperative Society (a successful cooperative in Telangana) was giving Rs 22 a litre. “We should work for 2-3 years to see some results in our model. We are holding meetings at district levels to gain support for our model,” M. Jitender Reddy, President of PDFA, said.
Mewah to have palm oil refinery in Malaysia by Dec
ewah International Inc (MII),a an edible oils and fats processor, will complete a refinery in Malaysia after the country cut export taxes on crude palm oil, potentially boosting margins. The plant in the eastern state of Sabah with an annual capacity of 700,000 metric tons will probably be finished by the yearend, boosting the company’s capacity to 3.5 million tons, a stock exchange filing said today. A refinery in Indonesia was put on hold and may be revisited by end-2014, Chief Financial Officer Rajesh Chopra said in an interview. Malaysia, the world’s second-largest producer, lowered the export tax on the
crude variety and abolished a duty-free shipment quota from Jan. 1. Indonesia, the biggest, cut taxes in 2011. Shipments from Malaysia are tax-free in January and February because of a decline in global prices. The decision to resume construction in Sabah was made after “looking at the viability in Indonesia, refining margins in Malaysia, the supply, customer base, and how much time it’ll take to complete,” said Chopra. In January last year, Mewah said the plant was being delayed as the company moved investments to Indonesia. The Sabah facility may cost about $73 million and will
be funded from Mewah’s initial public offering, internal accruals and external borrowings, the company said. SAARC OILS & FATS Today March 2013
News GM crop area grows
lobal acreage under biotech or genetically modified (GM) crops continued to expand in 2012, but the pace was a bit slow than previous year. Interestingly, for the first time since the introduction of these crops in 1996, the developing countries now have more area under GM crops compared to their industrialised counterparts. In 2012 an additional 10.3 million hectares (mh) came under GM crops against 12 mh in 2011. Brazil leads Brazil accounted for bulk of the expanded GM acreage, followed by Canada, US, India and China, according to a report released by the International Service for the Acquisition of Agri-Biotech Applications (ISAAA). Sudan and Cuba planted GM crops for the first time in 2012 by growing biotech cotton and hybrid biotech maize respectively.
Of the 28 countries that planted biotech crops in 2012, 20 were developing and eight industrial nations. Developing nations accounted for 52 per cent of the GM crop area in 2012 against 50 per cent in 2011, while the developed countries led by the US accounted for the rest. Steady growth “The adoption of biotech crops in developing countries has built up steadily over the years. This growth is contrary to the prediction of critics, who prior to the commercialisation of the technology in 1996 prematurely declared that biotech crops were only for industrial countries, and would never be accepted and adopted by developing countries,” said Clive James, Founder of ISAAA, in a statement. James, who authored the report – Global Status of Commercialised Biotech Crops: 2012 – said the report underscores
rising awareness in developing countries about the benefits of planting genetically modified crops, which not only have increased yields, but also bring savings in fuel, time and machinery, reduction in pesticide use, higher quality of product and more growing cycles. The growth rate for biotech crops was at least three times as fast, and five times as large, in developing countries, at 11 per cent or 8.7 mh as against 3 per cent or 1.6 mh in industrial countries. A record 17.3 million farmers grew biotech crops worldwide in 2012, up 0.6 million from a year earlier. Over 90 per cent of these farmers, or more than 15 million, were small resource-poor farmers in developing countries. “Global food insecurity, exacerbated by high and unaffordable food prices, is a formidable challenge to which biotech crops can contribute,” James said.
Nestle India buys 26% stake in Indocon Agro
n a surprise move, Nestle India Ltd has acquired 26 per cent stake in a little known dairy company Indocon Agro and Allied Activities Pvt Ltd. In a note to the BSE on Monday, Nestle said that it had entered into an agreement to pick up a minority stake in Indocon, which is engaged in milk collection business in western India. Nestle India currently has its own manufacturing facilities at Moga in Punjab and Samalkha in Haryana, which largely service the northern market. Apart from that, it has contract supply arrangements for the West and South markets with Baramati-based Schreiber Dynamix Dairies Ltd and the Hyderabad-based
SAARC OILS & FATS Today March 2013
Heritage Foods for its curd and UHT (ultra high temperature) milk. Besides, it sources milk powder from domestic players such as Sterling Agro and VRS Foods. “When there are so many suppliers, one doesn’t understand the rationale for picking up stakes, that too in a company about which not much is known,” an industry source said. One possibility could be that this company could be linked to Schreiber Dynamix itself. There has been talk, of late, about Nestle tying up with Schreiber Dynamix to set up a milk powder plant at Baramati. Schreiber Dynamix, formerly Dynamix
Dairy Industries Ltd, was originally promoted by K.M. Goenka, before the USbased cheese major Schreiber International Inc acquired a majority stake in it in 2003. Following that, Goenka floated a separate company, Sahyadri Agro Produce and Dairy Ltd, which is engaged in the business of milk handling for captive consumption of Schreiber Dynamix. A Nestle India spokesperson said the Swiss major’s deal with Indocon was of ‘strategic and long-term’ nature, but could not give further details, including where the latter was based or how much milk it collects per day. Details of the financials of the transaction were also not disclosed.
SAARC OILS & FATS Today March 2013
News Maharashtra dairy may export skimmed milk powder to China
he local dairies in Mahrashtra are keen to export skimmed milk powder to China. The State Government has already started the process of lobbying with the Centre for the exports. Due to the 2008 baby food adulteration scandal in China, in which, toxic melamine was added to the baby food by Chinese companies, families have stopped buying local products. As a result, today there is a $2-billion import market in China for skimmed milk powder (SMP), which is an important ingredient in baby foods. In 2012, China imported about 5.5 lakh tonnes of SMP and it is expected to grow at about 12 per cent. Currently a tonne of SMP fetches $3,500 in the international market. Dairies in Maharashtra have over 21,000 tonnes of SMP lying idle in the warehouses.
Higher operational expenses, depressed local prices and inadequate government subsidy have forced many diaries to hold to their unsold stocks. The private sector dairies buy about 63.5 lakh litres of milk a day, milk cooperatives procure about 41 lakh and the State Government diaries buy another 2.5 lakh. As a result about 107 lakh gets procured by organised sector in Maharashtra, off which 70 lakh are sold as liquid milk, 14 lakh used for other milk products and 23 lakh are processed as skimmed milk powder. A senior Maharashtra Government official said that the inventories rise because the milk procurement and the operational cost of dairies in Maharashtra are high. “These dairies incur an expense of about Rs 180 for producing one kg of SMP.
But they are not getting good rates within the country. Nor they can afford to stop procuring milk from farmers, as it could lead to civil strife,” the official said. Efforts are underway with the Centre, so that exports to China can start. Soon a delegation of ministers and senior officials would be visiting New Delhi to push for the case, the official said. Managing Director of Gokul Diary D. Ghanekar said that there is a demand from the international market for SMP but Indian powder does not command premium price due to moisture and bacterial content. If this issue is resolved, then prices of Indian SMP could increase, he said.
Indonesia’s palm oil exports may sink
alm oil shipments from Indonesia, the world’s largest grower, may decline to the lowest level in four months in February as more buyers turn to Malaysia after it extended duty-free shipments to clear record stockpiles. Futures fell to a two-week low. Exports will probably drop 5.6 per cent to 1.51 million tonne from January, according to the median of estimates from three plantation companies, one analyst and one refiner compiled by Bloomberg. Output may slide 8 per cent to 2 million tonne, while inventories contract 14 per cent to 3 million tonne.
Malaysia, the second-biggest producer, set the tax on crude exports at zero for January and February after revamping tariffs to try to clear the reserves. Prices in Kuala Lumpur, which lost 23 per cent last year, advanced 2.3 per cent in 2013 amid speculation holdings will drop as exports gain and supply shrinks. India, the top buyer, introduced an import tariff last month, while Indonesia raised its export tax for February. “Malaysia is more competitive,” said Eddy Martono, a director at Jakarta-based planter PT Mega Karya Nusa. “We’re hit by double taxation, with India imposing
an import tariff and Indonesia raising the export tax.” The Indonesian Palm Oil Association, known as Gapki, will release its estimate for January’s exports at the end of this month, and follow with the February figure in March. The group, which forecasts prices will rally this year as demand increases, doesn’t issue data on output or reserves. Stockpiles of 3.5 million tonne in January, according to an earlier Bloomberg survey, were the largest since the surveys began last May.
M. P. Govt attaches land of K. S. Oil
he Madhya Pradesh Government has attached the land of the district’s largest soyabean oil company here for not paying diversion charges since last four years. “We have attached K S Oil’s 13.653 hectare land located at Silawati on the A B Road for non-payment of diversions fees of Rs 66,97,642 since 2009,” tehsildar
SAARC OILS & FATS Today March 2013
Rashmi Shrivastava said. If the dues are not paid within 15 days, the Government can auction this land, the official said. During this period, the company cannot sell or use the land, worth crores of rupees and situated on the highway, she said. Shrivastava said that her office had taken the action as despite several notices
served to the company in this regard, it was not paying the dues. K S Oil’s soyabean extracting plant is situated at Silawati village and was set up with an initial cost of over Rs 200 crore. The company had purchased the land from the railway line to the A B Road for the purpose, but diversion fees was not yet paid by it, she added.
SAARC OILS & FATS Today March 2013
SAARC OILS & FATS Today March 2013
SAARC OILS & FATS Today March 2013
Date of Publishing 4-5 Every Month Date of Posting 9-10 Every Month
Postal Regn. No. DL (S) - 17/3193/2012-14 R.N.I. Regn. No. 69781/98
Published on Mar 7, 2013
Saarc OILS & FATS TODAY, the most widely read trade monthly magazine in oils & fats industry and trade in South Asia keeps you updated on th...