Growing population, economic growth and rising disposable income will drive India’s vegetable oil consumption growth, which is expected to grow by three per cent annually to exceed 34 million tonnes by 2030, according to a report.

“Increasing income, urbanisation, changing food habits and deeper penetration of processed foods will be key drivers of future consumption growth of edible oil in the country,” RaboResearch report ‘The Future of India’s Edible Oil Industry: How Will India’s Vegetable Oil Demand Shape Up by 2030’

The country’s vegetable oil consumption was at 23 million tonne in 2017, it added.

Because of current stagnant domestic vegetable oil supplies, import volumes will continue to fill the majority of the supply-and-demand gap over the next decade, it added.

Palm oil, soy oil and sunflower oil are expected to penetrate regional markets further in the future, with the packaged edible oil segment leading the way for future growth of the industry, the report said.

“Domestic oilseed production growth can’t keep up with rising demand. Rising demand and stagnant domestic vegetable oil supply, which has been range bound between 6.5 million tonne and 8.5 million tonne in the past decade, will push the country’s vegetable oil imports to over 25 million tonne by 2030, from 15.5 million tonne in 2017,” Rabo Bank analyst, Grains and Oilseeds, Rohit Kumar Dhanda said.

Driven by low domestic supplies, palm oil, soy oil, and sunflower oil will continue to represent more than 98 per cent of total vegetable oil imports, the report said.

Palm oil from Malaysia and Indonesia will continue to take the lions share at 60 per cent of total imports in 2030, followed by South American soy oil taking a 24 per cent and sunflower oil from the Black Sea Region at 14 per cent market share, respectively, it added.

Soybean and sunflower oil import volumes into India will continue to grow at a five per cent annually despite their price premium over palm oil, due to a shift in domestic demand and consumer preferences for quality, it said.

However, the report said, palm oil will continue to be the largest imported vegetable oil because of its price advantage, the price sensitivity among the low-income population, consumption growth in the fast-moving consumer goods (FMCG) sector, blended vegetable oil segments and increasing out-of-home consumption.

The packaged branded edible oil sector in retail currently, which accounts for 40 per cent of total edible oil consumption, will continue to grow between 6-8 per cent annually over the next five years, it added.