Overview of oilseeds industry

Indias total oilseed production in marketing year (MY) 2017/18 (Oct-Sept) is forecast to rise
seven percent to 38.6 million metric tons (MMT), derived from 40 million hectares
India is heavily dependent on imported edible oils, and almost 65-70 per cent of the overall
edible oil demand being met through imports
SEA has reported that India's edible oil imports fell by over 7 per cent year-on-year to 11 lakh
tonnes in March 2017
Palm oil accounted for the largest share of imported edible oils in 2016-17, followed by soybean
oil and sunflower oil.
Threat of entry (LOW)

- High capital requirement

- High GST allocation
- Deep domain knowledge required

Threat from substitutes (LOW)

- Substitutes such as baked, grilled foods, ghee, butter, margarine are available but are not very
economically feasible to use on a day-to-day basis

Bargaining power of suppliers (LOW)

- Due to a huge deficit in demand and supply of oil seeds in the country, more than two-thirds of the
demand of oil seeds is met via import
Bargaining power of buyers (LOW to MEDIUM)

- Due to oil being an essential commodity, a preference for taste and the buyers being dispersed,
bargaining power of retail buyers is relatively low. Although, many low income households prefer
switching to cheaper oils like palm oil if other oils become costly. Also, large corporate buyers such as
FritoLay, Haldiram may enforce higher bargaining power when compared to the retail buyers.

Rivalry amongst competitors (HIGH)

- The industry is highly fragmented with no differentiation between products. As the lower-income
groups of the country resort to the usage of cheaper oils in order to reduce their daily expenses, they
more often than not prefer to use unbranded varieties of oil. This eventually leads to a price war
among the market players.
 Government policies affecting the oilseeds industry

http://www.business-standard.com/article/markets/edible-oil-to-become-costlier-by-4-5-on-import-duty-hike-
117081200595_1.html

http://economictimes.indiatimes.com/markets/commodities/news/edible-oil-producers-worried-over-5-
gst/articleshow/58784558.cms

http://pib.nic.in/newsite/PrintRelease.aspx?relid=147124

http://indianexpress.com/article/india/crop-insurance-a-flagship-scheme-that-may-flatter-to-deceive-4768640/

http://pib.nic.in/newsite/PrintRelease.aspx?relid=158201