The prices of edible oils, which are currently ruling low, may go up this year on lower production, global economic issues and supply constraints, according to Pradeep Chowdhry, Managing Director, Gemini Edibles & Fats India Limited (GEF).
“The availability of palm oil for edible oil requirements has come down as the main two producers, Malaysia and Indonesia, are diverting it for the production of biodiesel. They have already diverted 12 million tonnes out of the aggregate volume of 70 million tonnes. This could result in an increase in prices this year,” he told businessline.
Pointing out that edible oil prices are highly volatile, he said that the prices depended on geopolitical issues. “The Indian edible oil players in India should closely follow the developments and align their strategies accordingly,” he said.
Stating that the food sector in the country has the potential to grow at double-dight growth over the next 10 years, he said the edible oil sector too has a huge scope.
“We are moving from commodity trade to branded sales. And within the branded segment, we are moving towards premium oils, such as healthy oils. The shift is happening. It’s a great place to be in still for the next 10-15 years,” he said.
The 24 million tonne edible oil market in the country is growing at 4-5 per cent annually, while the branded segment is growing at 10-12 per cent. Of this, 70 per cent is branded and the remaining is unbranded.
With disposable incomes growing fast, driving the consumption of branded oil, the country will be a totally branded edible oil market in the next 5-7 years.
“We withstood several challenges over the last 15 years, the recent one being the Ukraine-Russia conflict. It led to the drying up of supplies and prices going up to $2,700 from $1,200 in the pre-war period. We could quickly tap other sources like Russia and Argentina,” he said.
“This situation lasted for six months. The Ukraine channel is revived now. We survived the worst possible sunflower scenario,” he said.
The company is in the business of importing, processing, trading, and marketing of branded (Freedom) edible oils and specialty fats. The Hyderabad-based company primarily operates in Telangana, Andhra Pradesh, Karnataka, Odisha, and Chhattisgarh.
“We hold a majority market share in the sunflower segment in AP, Telangana and Odisha. We are no. 1 in the country with a 22 per cent share,” he claimed.
The company, which started off its operations with a capacity of 600 tonnes a year in 2010, now has a capacity of 1,800 tonnes per day. “We are going to hit the 2,000-tonne mark in the next six months,” he said.
It is planning to set up a refinery in Telangana with an investment of ₹600 crore. It is going to be rolled out in three phases. The company, which registered a turnover of ₹10,000 crore last year, hopes to close the current financial year with ₹12,000 crore.