The Hindu Business Line : Cottonseed oil offtake gaining ground

Preference
Groundnut oil in wholesale market is ranging at Rs 630 for 10 kg.
Refined cottonseed oil is ruling at Rs 435 lower than sunflower or RBD palmolein, quoting at Rs 438.
Once refined, cottonseed oil is good for consumption and has no ill-effects on health.

Chennai March 20 Mr Mehta (first name withheld) and his family in Rajkot, Gujarat, have now switched over to consuming cottonseed oil from groundnut oil. With groundnut crop being lower this year, its oil prices have sky-rocketed. This primarily has led to consumers such as Mr Mehta shifting to other alternatives.

"Cottonseed oil has become the second-most preferred one for consumers in Gujarat and Maharashtra because of its affordability," says Mr Bipin Patel, a former Chairman of the Solvent Extractors Association of India (SEAI) and Managing partner of S.K. Industries in Junagadh.

Gujarat scenario

According to Mr B.V. Mehta, Executive Director of SEAI, Gujarat alone consumes four lakh tonnes of cottonseed oil, followed by Maharashtra, Andhra Pradesh and Punjab.

"Groundnut oil is now being treated as a luxury and, therefore, cottonseed oil is now being used for cooking and other edible purposes," say industry players.

This oil year (November 2006-October 2007), groundnut production is estimated lower by nine lakh tonnes at 53.5 lakh tonnes compared with last year. Again, rapeseed/mustard crop production is also estimated lower by eight lakh tonnes.

This has resulted in total oil availability being lower by nearly five lakh tonnes compared with last year. However, thanks to the rising consumption of cottonseed oil, the availability is lower only by three lakh tonnes.

"Cottonseed oil has seen an upswing in the last couple of years after cotton production saw a phenomenal rise. In the last three years, including the current one to September, cotton output has been around 250 lakh bales of 170 kg," says Mr Mehta. This season, it has been projected at a record 270 lakh bales.

While groundnut oil in the wholesale market is ranging at Rs 630 for 10 kg, refined cottonseed oil is ruling at Rs 435. This is even lower than sunflower or RBD palmolein, which is quoting at Rs 438.

AVAILABILITY

The 270 lakh bales cotton translated into an availability of nearly 90 lakh tonnes of seed. Taking away 15 lakh tonnes for sowing and other uses such as direct feeding for cattle, nearly 75 lakh tonnes of seeds are available for crushing.

"All the 75 lakh tonnes of cottonseed are crushed into oil. Considering that on an average the seed gives 12 per cent oil, we can get nine lakh tonnes of cottonseed oil," says Mr Patel. Oil recovery from cottonseeds can go up to 18 per cent if processed properly, he says.

In fact, the Shankar-6 variety yields more oil than other varieties, says Mr Mehta.

A major share of the 75 lakh tonnes of cottonseed is crushed by small processors leading to a lower recovery.

Process

Crushed cottonseed cannot be consumed directly. It is first neutralised to derive washed cottonseed oil. It is bleached and deodorised to produce refined cottonseed oil. "Once refined, cottonseed oil is good for consumption and has no ill-effects on health," says Mr Patel.

According to Mr Mehta, production of cottonseed oil is the third highest this season among edible oils after rapeseed/mustard and soyabean. "Even ricebran oil, whose output is seen at 7.5 lakh tonnes, is higher than that of groundnut. Let's not take palm oil into account because it is imported," says Mr Mehta.

Cottonseed oil has been one of the factor that resulted in edible oil imports declining to a nine-year low in February this year.

Edible oil forms a major chunk of the import basket of the country. During 2005-08, Rs 8,710 crore was spent on edible oil imports compared with Rs 11,066 crore the previous year.

For the current fiscal, Rs 7,558 crore has been spent till December.

More Stories on : Oilseeds & Edible Oil | Trends | Gujarat

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