Packaged Vegetable Oil gaining traction in India

The Indian vegetable oil market accounts for 10 % of the total world consumption of 169 Million Tones (year 2010, projected). Consumption of vegetable oil in India stands at 15 million tons for the oil year Oct 08 – Nov 09 and is expected to touch 17 million tons for oil year Oct 09 – Nov 10. In value terms the Indian vegetable oil market is pegged at Rupees 750 billion. The packaged vegetable oil market in India stands at only 25%, i.e. Rupees 187.5 billion.

Analysts and experts have projected that the consumption of vegetable oil will touch 30 million MT in the 2020 with a CAGR growth of 6 -7 %. This growth rate is 3 times the world growth rate of 2% CAGR. The per capita consumption of edible oil in India has improved over last couple of years and stands at 15 kg per year for 2010, but it is still way below the world average of 24 kg per year. Due to increase in awareness and health consciousness, increase in disposable income and rural prosperity due to schemes like NREGS, the packaged oil segment is growing faster than the category and is expected to touch 50% - 60% of total vegetable oil consumption by 2015.

The vegetable oil industry in India is highly fragmented. It has the largest number of oil mills, solvent extractors and refineries. As of January 2009, India had 1, 50, 000 oilseeds crushing units, 795 solvent extraction units, 943 refineries.  These units include those under the small scale industries as well as the organized sector.  The capacity utilization varies from 10 % in case of ghanis (small scale sector) to 30 % in case of extractors in the organized sector.

India is the fifth largest producer of major oilseeds. In the oil year 2008 – 09, India produced 27.7 million tons of Oilseeds. Both, the oil seed yield per hectare as well as oil extracted from the oil seeds in India is lower than the world average. Hence, India is a net importer and imports almost 50% of the oil required for its consumption, which is 14 % of the total world imports.

New Age Banking - Opportunities and Challenges

The telecom revolution has changed many aspects of human life and banking is one of them. Increasing mobile and internet penetration has revolutionized the way people bank. Banking solutions such as mobile and internet banking has helped customers save time, money and efforts as most of the transactions - such as bill payments, cash transfer, checking account balance and making investments - can be performed at home at one’s own convenience.

India is one of the fastest growing mobile markets in the world. There are about 400 million mobile users in India. Out of that, 200 million do not have a bank account. It is financially unviable for banks to set up branches in remote villages. Hence branchless banking through the use of technology is the only way to bring the vast unbanked population under the banking umbrella. It can help lower cost for both the bank as well as the customer to access financial services. As most of the transactions are non cash – in or cash – out, mobile banking is a viable option. Local kirana stores can act as designated collection and disbursement centers. With broadband going wireless, banks can set up kiosks with laptops in rural areas to facilitate banking transaction, like the ITC e - choupal model.

Despite all the merits, mobile banking is still a way to go in India due to the many challenges. There are numerous regulations that exist for banking sector to maintain the security and reliability, same amount of regulations can’t be applied on branchless banking model, hence risk involved from the financial security point of view is high. There are also various bodies involved in providing the mobile banking facilities such as the banks, mobile operators, software providers, handset manufacturers etc. The inter-operability of various groups and their ability to adapt to the RBI regulation are some of the challenges. Apart from the above challenges, customer’s adaptability due to illiteracy and ignorance and low transaction amounts are some of the other challenges from the user perspective.