1

11stst Thailand Conference of Fats & Oils Thailand Conference of Fats & Oils Role of Rice Bran Oil &Role of Rice Bran Oil &

its Products in Changing Asiaits Products in Changing Asia

India’s Overall Demand & Supply of Edible Oil with Special Reference to Rice Bran Oil

By:

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Dr.B.V.MehtaExecutive Director

The Solvent Extractors’ Association of India

16th -17th May 2013NaresuanNaresuan University, University, PhitsanulokPhitsanulok, Thailand, Thailand

Presentation Sequence

• SEA Profile

• Incredible India

• Indian General Economy

2

• Agricultural Economy

• Indian Oilseed Sector

• Edible Oil Demand & Supply – Short term & Long term projection

• Rise of Rice Bran Oil in India

SEA Profile

• Formed in 1963 to foster the development & growth ofthe Solvent Extraction Industry in India

• Largest and Premier Association in the Vegetable Oil

3

g gSector in India

• First Association in Vegetable Oil & Oilseed sector toreceive ISO 9001 Certification in India (2004)

• Recognised as NGO and TPO by Government of India

Over 850 Members

• S. E. Units• Oil Millers • Refiners

. Vanaspati Mnfrs.

India

3328

218

29 6

SEA Members

. Importers

. Exporters

. Surveyors

. Shipping Agents

. Fin. institutes

. Foreign Buyers &many more….

32

87

49

291

104 43

9

22

50

2

8

1

4

5

• Second most populous nation

• 1.22 Bn people

• Largest Democracy

• Multi ethnic country

What People Talk About India

6

• Country with maximum young people

• Median age is 24 years

• Amongst the fastest growing economies

• Fourth largest economy

• Literacy level – 65% (2012)

• 3 B’s….

2

BOLLYWOOD

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BEAUTY

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38% of doctors in USA are Indians

12% of scientists in USA are Indians

37% of NASA scientists are Indians

BRAINS…….

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31% of MICROSOFT employees are Indians

27% of IBM employees are Indians

17% of INTEL scientists are Indians

13% of XEROX employees are Indians

Indian General Economy

10

• India – a fast growing significant economyin spite of global slowdown

• Strong Macro-economic fundamentals

• GDP Value: Over US$ 2.0 Trillion (Tn)

Indian Macro-economic Overview

11

• Purchasing Power Parity (PPP): US$ 5 Tn

• Forex Reserve: US$ 294 Bn

• FDI Flow US$ 24.2 Bn (2012-13)

• Household Savings Rate 30.8% (2011-12)(world’s highest)

row

th R

ate

(%

)

6.1

4.45.8

3.8

8.57.5

9.5 9.6 9.3

6.7

8.4 8.4

6.2 5.76.8

India's Overall GDP Growth

12

GD

P G

r

The average GDP growth in last five years is registered at 7.1%

For FY13-14, growth is projected at 6.8%

Source : CMIE

3

I di A i l S i

13

Indian Agriculture Scenario

Agriculture Sector GDP Growth

DP

Gro

wth

Ra

te (

%)

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Agriculture Sector Growth depends heavily on monsoon performance.

For the year 2013-14 growth is forecasted at 2.6%

Ag

ricu

lture

G

Source : CMIE

• Area (3.3 Mn Km2) No. 7

• Arable Land (161.7 Mn Ha) No. 2

• Irrigated land (56.0 Mn Ha) No. 1

• Milk Production No. 1

• Rice Production No. 2

India’s Ranking in the World

15

• Wheat Production No. 2

• Rapeseed Production No. 2

• Fruit Production No. 2

• Tea Production No. 2

• Sugar Production No. 2

• Cotton Production No. 2

• Coffee Production No. 5

India’s Agriculture Production

16

India is well connected with cellular phone having 930 Million users and with the talk time rate cheapest in the world

Indian Oilseed Sector

Demand - Supply

and

17

and

Import of Vegetable Oils

• Area Under Oilseed Cultivation 26-27 Mn. Ha.• Average yield 1100 Kgs.• Output of 9 cultivated Oilseeds 29.8 Mn. T.• Output of Cottonseed & Copra 11.0 Mn. T.

Total 40.8 Mn. T.

• Production of Vegetable Oils 7 45 Mn T

Oilseed Sector 2012-13

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• Production of Vegetable Oils 7.45 Mn. T.• Demand of Veg. Oils (Edible) 17 .5 Mn.T.• Import of Veg. Oil 2012-13 (Nov-Oct) (Edible) 10.5 Mn.T.(E)

• Per capita consumption (2011) 14.3 Kg.

• Per capita consumption is rising by 3 to 4% per annum.

4

Oilseed Sector - Share of India• Vegetable Oil Sector Turnover US$ 23.0 bn.

(Rs.125,000Cr)

• Import & Export from Oilseed Sector US$ 12.0 bn.(Rs.65,000 Cr.)

2011-12

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• In World's Oilseed Production 8.0 %• In World's Oilmeal Production 6.8 %• In World's Oilmeal Export 6.5 %• In World's Production of Veg. Oils 5.2 %• In World’s Vegetable Oil Import 13.6 %• In World's Edible Oil Consumption 10.2 %

Source: OIL WORLD

Year(Nov-Oct)

OilseedsProduction

Availability of Veg. Oils

Edible Non-Edible

Total

2012-13 (P) 29.46 6.8 0.65 7.452011-12 29.80 7.34 0.78 8.122010-11 32 48 7 92 0 60 8 52

India’s Oilseeds & Veg. Oil ProductionQty in Mnt

20

2010-11 32.48 7.92 0.60 8.522009-10 24.88 7.26 0.51 7.772008-09 27.72 7.71 0.50 8.212007-08 29.76 7.75 0.49 8.242006-07 24.29 7.33 0.43 7.762005-06 27.98 7.56 0.47 8.032004-05 24.35 7.16 0.43 7.592003-04 25.18 7.21 0.38 7.59

Source : SEA & Ministry of Agriculture

The average avaibility of vegetable oil is about 8.0 Mnt

World & India Production of Oils & Fats 2012-13

Oil & Fats World India Palm Oil 54.90 0.08Soya Oil 43.54 1.76Rape Oil 23.69 2.01

Qty : Mn T

RBO

Palm Oil

Cotton Seed RBO

GN

Other Oils & Fats

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Rape Oil 23.69 2.01Sun Oil 14.70 0.21Cottonseed Oil 4.89 1.13Groundnut Oil 4.21 0.12Rice Bran Oil 1.20 0.90Other Oils & Fats 41.59 1.29TOTAL 188.72 7.50

Source: World data from Oilworld 2012 & SEA Data Bank for India

WORLD

Major Veg.Oils produced in India are Rapeseed Oil, Soybean oil, Cottonseed Oil, Rice Bran Oil & Groundnut Oil

RBO

Soya Oil

Rape Oil

Sun Oil

Cotton Seed

Country 2011-12 2010-11 2009-10 2008-09 2007-08 2006-07

EU-27 59.4 60.3 61.6 60.0 57.4 56.4

U.S.A. 54.7 52.5 50.4 51.3 54.9 54.0Argentina 92.1 77.7 63.0 46.4 35.7 24.8China 25.1 24.5 23.8 22.9 21.8 21.3

Per Capita (kg) Disappearance of Oils and Fats in Selected Countries and World

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India 14.8 14.5 14.3 13.9 12.5 12.1Indonesia 33.4 29.7 25.6 23.5 21.9 19.8Japan 21.5 21.4 21.5 20.8 22.2 22.3Pakistan 21.5 21.5 21.7 21.6 21.5 21.3Turkey 29.6 29.0 28.7 27.2 31.3 31.5Thailand 26.0 25.2 23.6 22.2 19.1 15.3

World 25.91 25.31 24.68 23.92 23.43 22.78

Source : Oil World 2012

Number shown includes consumption of oils and fats for Bioenergy

Item DescriptionWTO

Bound Rate

Duty on Crude Edible

Oils

Duty on Refined Edible

Oils

Tariff Value US$/MT

(30th April 2013)

Soybean Oil 45% 2.5% 7.5% 1103 (Crude)

RBD Palmolein 300% - 7.5% 861

India – WTO Bound Rates & Import Duty2013

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RBD Palmolein 300% 7.5% 861

RBD Palm Oil 300% - 7.5% 851

Crude Palm Oil 300% 2.5% 7.5% 824

Sunflower Oil 300% 2.5% 7.5% -

Rape/Mustard Oil 75% 2.5% 7.5% -

Import duty on Crude Oil raised from Nil to 2.5% w.e.f. 23rd Jan 2013

Import Duty on Crude & Refined Palm Oil

Period Crude Palm Oil

Refined Palm Oil

1994 (April) - 65.0

2001 (Apr.) 75.0 92.2

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2006 (28, Feb) 88.8 99.4

2008 (20, Mar.) 20.60 28.33

2012 (10, Oct.) Nil 7.73

2013 (23, Jan.) 2.50 7.73

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Import & Export from Oilseed Sector

• Import of Edible Oils freely allowed9.98Mnt(11-12) Rs.56,000 Crores (US$: 10.3bn)(PalmOil:7.66mnt,SFO:1.13mnt, SBO:1.08mnt)

• Oilmeal Export freely allowed5.5 mnt (11-12) Rs.8500 Crores (US$: 1.6bn)(Soybean Meal 4.0 Mnt, Rapeseed Meal 1.25 mnt)

• Oilseeds Export freely allowed1.25Mnt (11-12) Rs.8200 Crores (US$: 1.5bn)

(Seaseme Seed 0.40 Mnt, HPS Groundnut 0.85 Mnt)

• Exports of Castor Oil & derivatives Freely allowed400,000 tonnes valued Rs.4000 Crores (US$: 730 mn)

• Export of Edible Oils in consumer packs freely allowed – Bulk banned20,000 tonnes valued Rs.150 Crores (2012-13) (US$: 27mn)

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Consumption

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Consumption of various oils in India in 2011-12

Oils Domestic Import Total %

Palm Oil 0.07 7.50 7.57  46.0

Soybean Oil 1.65 1.01 2.66  16.2

Rapeseed Oil 1.74 0.09 1.83  11.1

Qty: in MnT

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Sunflower Oil 0.22 1.08 1.30  7.9

Cottonseed Oil 1.19 ‐ 1.19  7.2

Rice Bran Oil 0.85 ‐ 0.85 5.2

Groundnut Oil 0.39 ‐ 0.39  2.4

Other 0.65 ‐ 0.65  4.0

TOTAL 6.75 9.67 16.42  100

North IndiaPopulation 23.9%

Consumption 22.6%West India

Population 26.1%Consumption 32.8%

Zone wise Consumption Pattern

East IndiaPopulation 29.1%

Consumption 23.3%

South IndiaPopulation 20.9%

Consumption 21.3%(2010‐11 Figures) 

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• Major Oil consumed in India - Palm, Soya & Rape

• Lower & Middle Class Price Sensitive

Consumption & Characteristics of Indian Consumer

• Palm Oil preferred Oil being cheapest

• Vegetable Oil Demand quite Elastic and switchable

• Rice Bran Oil consumption is picking up in metros on health platform

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Consumption of Edible Oils In India

10.1210.79

9.9511.6

12.2 11.98 12.0413.36

15.89 16.08 16.2917.5

Qty in MnT

30

6

Consumption Of Edible Oils In India

15.7 16.8 17.44 18.0819 19.65 20.48 21.28 22.27 23.1

Consumption in Mnt

Demand Scenario upto 2020Due to high growth in income levels, increasing trend in spending & betterliving standards; India promises to continue high growth in consumption ofedible oils and consumption may reach 23 ml T by 2020 @ 3% growth rate.

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Import of Vegetable Oils by India

32

Edible, Vanaspati & Non-edible 2006-07 To 2011-12 (Nov – Oct)

Vegetable Oils

2011-12 2010-11 2009-10 2008-09 2007-08 2006-07

Edible Oils 9.98 8.37 8.82 8.18 5.61 4.71

V ti 0 02 0 05 0 25

Import of Vegetable Oils

(Qty in Mn T)

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Vanaspati(Hydrogenated Fat)

-- -- -- 0.02 0.05 0.25

Non-edible 0.21 0.29 0.42 0.46 0.65 0.63

Total 10.1 8.66 9.24 8.66 6.31 5.59

Source : SEA

Import of Veg Oils is rising from year to year to bridge the demand and supply gap

Countries Jan/Dec2012

Jan/Dec2011

Jan/Dec2010

Indonesia 5301 5011 5435Malaysia 2494 1677 1189

Import of Palm Oil by India

Qty in ‘000 Tonnes

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ySingapore - - 2Thailand 4 49 21Others 10 - 1Total 7809 6745 6648Source: Oil World

Countries Jan/Dec2012

Jan/Dec2011

Jan/Dec2010

Russia 23 10 26Ukraine 1055 818 588

Import of Sunflower Oil by India

Qty in ‘000 Tonnes

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USA - - 11Argentina 37 43 37Others 1 1Total 1116 871 663

Source: Oil World

Countries Jan/Dec2012

Jan/Dec2011

Jan/Dec2010

USA 18 - 161Argentina 817 746 1284

Import of Soybean Oil by India

Qty in ‘000 Tonnes

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Brazil 313 144 78Paraguay - 36 45Thailand - 8 -Others 32 6.8 -Total 1180 941 1568

Source: Oil World

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India’s Vegetable Oil Imports

5.09 4.765.39

4.63

5.45 5.13 5.34

6.26

8.649.24

8.66

10 10.5

Figures in Mln.Tn

Stagnant Domestic oil production is leading to higher imports YOY to feed the growing Indian demand. 37

2011-12 2012-13

OilsNov.’11 to

Oct.’12Nov.’12 to

Mar.’13 (LY)2012-13

Projection

RBD Palmoein 1577 621 (821) 1800

Crude Palm Oil 5944 3120 (2079) 6500

Import of Edible Oils by IndiaQty: ‘000 Tonnes

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( )

Crude Soybean Oil 1079 249 (241) 1000

Crude Sunflower Oil 1135 422 (477) 1000

Rape (Canola) Oil 91 8 (38) 100

Others 105 77 (49) 100

Total 9981 4497 (3705) 10500 +India also Imports about 200,000 tonnes of Non-Edible Oil for Industrial Purpose

India's Growing Dependence on Imports

53%59%

49%

62% 58% 61% 59% 57%49%

46%50%

57%

In last 3 years, Import dependence has increased much more due to rising consumption and stagnant domestic production.

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• Low Productivity of Oilseeds

• Small farm sizes

• Lack of varietal replacement

Why the Import of Edible Oil is Rising?

40

p

• Shifting of acreage from Oilseed to other crops

• Losses due to pests and diseases

• Vagaries of nature

What are the Prospects for Indigenous Supplies of Oils in India ?

• Oilseed output targeted by 4% per year

• Vegetable Oil Production increase –

350/400Thousand per year

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• Demand to rise Faster –

700/800 Thousand per year

• Oil Palm cultivation yet to pick up

Demand drivers in India

• Consistent GDP growth rate at above 7 % in last 5 years

• The big emerging Indian middle class.

• Urbanisation

• Nucleus Family

India has a Promising Demand Growth

y

• Change in Food Habits

• The double digit growth of out of home consumption of edible oils.

• Per capita consumption of Edible oils in India at 14.0 kg (2012) which

is still a lot below threshold level of consumption.

• Even with a moderate population growth the absolute increase in

number of people is quiet High.

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8

Governments Support

• Scheme like NREGA (National Rural Employment GuaranteeAct) and rising labor income is increasing the income level ofpeople who are consuming much below the all India level.

• Supply of edible oils mainly palm oil by the Government at

India has a Promising Demand Growth

• Supply of edible oils , mainly palm oil, by the Government atsubsidized rates under PDS .

• Duty Free-Regime: Nil or negligible duty on crude imports hasfacilitated lower oil price to consumers and in turn pushdemand.

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India’s Demand Projection by 20202020

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Year

Population@1.76% Growth

Consumption @ 3% Growth

Consumption @ 4% Growth

Consumption @ 5% Growth

In BnPer

Capita Kgs

Mn. TPer

Capita Kgs

Mn. TPer

Capita Kgs

Mn. T

2012 1.20 13.9 16.68 13.9 16.68 13.9 16.68

2013 1.22 14.3 17.44 14.4 17.56 14.5 17.69

India’s Population & Consumption of Edible Oils2012-2020

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2014 1.23 14.7 18.08 15.0 18.45 15.2 18.69

2015 1.25 15.2 19.00 15.6 19.5 15.9 19.87

2016 1.26 15.6 19.65 16.2 20.41 16.6 20.91

2017 1.28 16.0 20.48 16.8 21.50 17.4 22.27

2018 1.29 16.5 21.28 17.4 22.44 18.2 23.47

2019 1.31 17.0 22.27 18.0 23.58 19.1 25.02

2020 1.32 17.5 23.10 18.72 24.71 20.0 26.4Source : SEA

Parameter 2013 2015 2020*

Population (in Bn) 1.22 1.25 1.32

Total Demand (M T) 17 5 19 0 23 10

Edible Oil Demand and Import ProjectionShort & Long Term

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Total Demand (MnT) 17.5 19.0 23.10

Domestic Supply (MnT) 6.8 8.0 9.2

Import (Mn T) 10.5 11.0 13.9+

Import as % Share of Demand

60% 57% 61%

* Based on 3% Growth (Excluding Non-edible Oils)

INDIAN RICE BRAN OIL A GROWTH STORY……

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Until recent past (1995), RBO produced in India was mainly used in soapmanufacturing and product mix of vanaspati manufacturing.

Since 1998 SEA, jointly with TMOP & CSIR launched campaign toencourage production and use of RBO as a Healthy Cooking Medium.

Rice Bran Oil - Indian Scenario

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SEA in its crusade to encourage the production and use of Rice BranOil as ‘Health Oil’, has organised 13 National Seminars and a numberof regional workshops in last fifteen years.

It also took a six-member delegation to Japan to study the latesttechnology in RBO processing (2001).

9

2000 onwards it started to be used in Edible purpose in Vanaspati &Blended Oil

2005 onwards with the awareness campaign it was accepted as a verygood healthy cooking oil

Rice Bran Oil - Indian Scenario (Contd..)

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By 2010 – Many RBO & Blended RBO Brands entered into the market

These efforts have gone a long way in encouraging the production ofgood quality refined Rice Bran Oil & progressively increasing itsconsumption as a ‘cooking oil for the Health of Entire Family’.

India produces the best quality of Rice Bran Oil and has emerged as thelargest producer of this oil in the world.

What Is Rice Bran Oil?

..a unique cooking oil produced

F Ri BFrom Rice Bran

What Is Rice Bran ?

Rice Bran is an oily layer in between the

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What is Rice Bran?

paddy husk and the white rice.

White Rice

Rice Germ

Rice BranHull

India’s Paddy Production

80

100

120

140

160 YearQty in Mnt

2004-05 1252005-06 1372006-07 1402007-08 1372008-09 1482009 10 133

Qty in MnT

52

0

20

40

602009-10 1332010-11 1422011-12 1492012-13(E) 155

Paddy Production increased by 125 Mnt to 155 Mnt in 10 years

Rice Bran Potential

56789 Year

Qty in Mnt

2004-05 7.02005-06 8.02006-07 8.02007-08 8.02008-09 8.02009-10 8.0

Qty in MnT

53

01234 2010-11 8.0

2011-12 8.02012-13 (E) 9.0

Average Recovery 6.5% from Paddy

Rice Bran Oil Potential

0.8

1

1.2

1.4

1.6

YearQty in

‘000MT2004-05 11652005-06 12772006-07 13082007-08 13202008-09 13862009 10 1252

Qty in MnT

54

0

0.2

0.4

0.62009-10 12522010-11 13362011-12 1400

2012-13 (E) 1460

Average RBO Recovery 15% to 16% from Rice Bran

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Rice Bran Processing

4.2

4.4

4.6

4.8 YearQty in Mnt

2004-05 4.002005-06 4.302006-07 4.402007-08 4.452008-09 4.502009-10 4.002010 11 4 40

Qty in MnT

55

3.6

3.8

4

2010-11 4.402011-12 4.602012-13 (E) 4.80

Rice Bran Oil Production

0.5

0.6

0.7

0.8

0.9 YearQty in

‘000Tonnes 2004-05 6802005-06 7302006-07 7502007-08 8002008-09 8502009-10 800

Qty in MnT

56

0

0.1

0.2

0.3

0.4 2010-11 8302011-12 880

2012-13 (E) 900

0.3

0.4

0.5

0.6

Untapped Potential Rice Bran Oil

YearQty in

‘000Tonnes2004-05 4852005-06 5472006-07 5582007-08 5202008-09 5362009-10 452

Qty in MnT

57

0

0.1

0.22010-11 5062011-12 520

2012-13 (E) 560

Paddy Production 155 MntRice Production 103 Mnt

Ri B P t ti l 8 86 M t

India – Rice Bran Oil Potential & Production

2012-13

58

Rice Bran Potential 8.86 MntRice Bran Oil Potential 1.46 MntRice Bran Processing 4.8 MntRice Bran Production 0.9 Mnt

Untapped Potential for RBO 0.56 Mnt

Production ofCountry Paddy Production Rice Bran Rice Bran Oil in ‘000 MT

(MnT) (MnT) Potential Potential ActualBangladesh 49.4 2.47 370 2Brazil 11.3 0.56 80 15Cambodia 8.2 0.41 60 10China 197.2 9.86 1470 90India 120.6 6.03 900 820

World Production of Paddy, Rice Bran & RBO Potential & Actual Production (2009)

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India 120.6 6.03 900 820Indonesia 66.4 3.32 490 ‐Japan 10.6 0.53 70 61South Korea 5.8 0.29 44 11Myanmar 33.2 1.66 249 101Pakistan 7.2 0.36 50 5Philipines 15.8 0.79 110 ‐Thailand 31.5 1.57 230 45USA 11 0.55 80 ‐Vietnam 40 2 300 11Others 63.8 3.2 480 32World 672 33.6 5040 1203Source: FAO & SEA Data Bank

Value addition toRice Bran as raw materials is a must,

focused to RBO and its products and By-products

The balance between these are very vital

11

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A wide variety of Value-added products are also derived fromRice Bran and Rice Bran Oil

Value-added Product UsesGamma Oryzanol Cholesterol Reducing Agent, Growth

Preserver, Health RejuvinatorInositol(Vitamin B) Good for General Growth & NutritionTocopherol(Vitamin E) & Tocotrienol

Antioxidants, Cholesterol Reducing Agent, Anticancer

Rice Bran – Rice Bran Oil – Other Applications

62

Tocotrienol AnticancerSqualene Good for Nutrition and Integrity of SkinCalcium Phosphate (Dibasic) Organic FertilizerMicrochemicals Industrial and MedicinalGum LecithinPhytin Food Processing IndustryWax Polish, Cosmetic, Carbon Paper, Fruit

Coatings, PharmaceuticalsFatty Acids Soaps and Paint IndustrySoap IndustrialIP-6 Medicinal, Antioxidant, Chelating AgentPhytosterol Cholesterol Reducing Agent

It can help in protecting the health of our people from diseases.According to Cardiologists’ Society of India, 30% of India'spopulation is prone to cardiac problems. Since every 1%reduction in Cholesterol, reduces the risk of heart attack by 2%,Rice Bran Oil can become a boon for our people

.

Benefits in Promoting Rice Bran Oil

63

It can help bridge the shortage of edible oils in the world whenits full potential of 5 Mn tonnes is exploited.

Rice Bran Oil Promotion will give better realisation for Paddy tothe farmers.

Higher capacity utilisation of rice milling and solvent extractionthereby leading to larger employment opportunities.

Status of Rice Bran Oil in the World

Japanese call it Heart Oil.

In USA, it is being sold as World’s Healthiest Oil.

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In Europe it has aquired the status of Functional Food.

It is accepted as a Premium Cooking Oil in Japan,Thailand and also in India.

Nature’s gift to mankind

Rice Bran OilA nutritionally superior edible oil

And so to conclude….

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A nutritionally superior edible oil

Providing immense benefits for the heart and for general health

A healthier alternative to your existing cookingMedium for a “Healthy, Happy Family”!

Dr. B. V. MehtaExecutive Director

The Solvent Extractors’ Association of IndiaA Premier Association of Vegetable Oil Industry & Trade in India

ISO 9001:2008 Organisation142, Jolly Maker Chambers No. II, 14th Floor, 225, Nariman Point, Mumbai 400 021

Tel: (+91-22) 2202 1475. 2282 2979, Fax.: (+91-22) 2202 1692

Email: solvent@mtnl.net.in , Website:www.seaofindia.com

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