The higher prices affected consumption.
“Currently, edible oil demand has been affected by higher prices, aggravated by the summer season, which generally sees contraction of demand,” Nirmal Bang said quoting Atul Chaturvedi, president at Solvent Extractors’ Association of India and advisor to Adani Wilmar, as saying during an interaction. Of the total edible oil consumption of 22 million tonnes, mustard oil accounts for 4.5 million tonnes, palm oil 7.5-8 million tonnes, soybean oil 5.5-5.75 million tonnes and sunflower oil accounts for 2 million tonnes.
“In 2019, 18 kg per capita consumption was recorded, which is now expected to fall to 16.5 kg. But once the monsoon season takes hold and the festival season arrives, demand should pick up pace.”
As for palm oil, Chaturvedi said, the exports have not smoothened in spite of Indonesia lifting ban on export of the commodity.
Falling prices and a marketing drive that often plays on health concerns over unbranded sales is likely to spur demand.
“We have seen consumers downtrading but it was mostly in the hope of prices regulating downwards. There’s also a move toward value pack offerings where consumers are looking to manage consumption and spends by buying multiuse packs at lower cost rather than single-use packs only,” Akshay D’Souza, chief insights and growth officer of retail intelligence platform, Bizom, told BQ Prime.
“But over the last decade, we’ve seen consumer preference for cooking oils move towards branded items for the convenience and quality offered. During multiple waves of Covid-19, we did see the preference for branded products rise, especially value-added products like blended spices or healthy oils,” he sai. “With prices now being corrected downwards, the move from unbranded to branded will continue over time.”