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G. Chandrashekhar

Mumbai , Nov 15

THE vegetable oil import basket of the world's second largest importer, India, is dominated by the palm group of oils followed by soyabean oil, to the virtual exclusion of all other oils save a small quantity of sunflower oil and coconut oil.

Despite a tariff rate quota of 1.5 lakh tonnes at concessional rate of duty, there is hardly any import of rapeseed oil; and even sunflower oil inflow has declined considerably this year.

Relative prices of various oils, customs duty structure and logistics dictate import volumes. In 2004-05 (November-October) India imported 50 lakh tonnes of various oils of which soyabean oil accounted for close to 20 lakh tonnes and palm group of oils close to 30 lakh tonnes.

Even as both palm and soya oils fight a pitched battle to gain market share here, Canola Council of Canada (CCC) is keen to explore the Indian market.

Canola oil from Canada already has a large established market in countries as far apart as Japan and Mexico.

Developed from rapeseed by Canadian plant breeders, canola is generally referred to as `0-0 variety' (double-zero variety) rapeseed as it has no erucic acid or glucosinolate. These components are considered inessential for human growth.

Canola oil enjoys a healthy fatty acid profile because of its low level of saturates, high level of monounsaturates plus essential omega-3 fatty acids, according to scientific literature.

"We are keen to service the growing Indian market for vegetable oils," Dr

Dave Hickling, Vice-President, Canola Utilisation at CCC told Business Line here today, suggesting that there was scope for India to exercise greater choice by expanding the list of oils beyond palm and soya.

He said canola should not be equated with rapeseed because of the superior physical, chemical, nutritional and performance properties of the former, and therefore, would not directly compete with domestic rapeseed/mustard oil.

Admitting that high rate of customs duty (bound rate on rapeseed oil is 75 per cent) together with relatively high price (around $700 a tonne versus $500 a tonne for soya and $400 a tonne for palm) would make the product uncompetitive in the price sensitive Indian market, the Canadian representative believes that a niche segment for this premium oil could be opened up on health grounds.

Currently, Canada produces roughly 8 million tonnes of canola and the target is 12 million tonnes in the coming years. It is obvious that canola oil will have to compete with palm and soya oils for capturing a share of the Indian market. "It is going to be a long haul for CCC; but we are keen to work with some Indian partners to make an entry and grow gradually," Dr Hickling said.

India last imported rapeseed oil during oil year 2002-03. Relatively high price and high tariff made imports unattractive for importers, in addition to lack of awareness about superior nutritional qualities of canola oil.

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