Canada bets on India's middle class to boost canola oil exports

Canada's canola oil exports to India are expected to double in the next 4-5 years as the country's burgeoning middle class opts for healthier edible oil options, said an executive of the Canola Council of Canada.

A big piece of India that has changed in the last few years has been the growing middle class that has both the means and health awareness to purchase a product like canola oil, Cory McArthur, vice president of market development for the Canola Council of Canada, told Reuters.

Canada, the top exporter of rapeseed variant canola, exported 500 tonnes of the oil till September 12 this year to India, according to the Canola Council of Canada website.

Initially, the growth (in India) is going to be driven by existing importers who are moving products into the consumer packaged goods market, McArthur said.

McArthur said the council has been in talks with Nature's Basket, the retail chain owned by Godrej Industries, PepsiCo India, Bunge India Pvt Ltd and Jivo Wellness to push for the use of more canola oil.

Canola oil, which has low saturated fat content, is used mainly as a vegetable oil for cooking or in foods like salad dressing and margarine.

India, the world's top vegetable oil buyer, imports nearly 45 percent of edible oil to meet its overall consumption of about 15.5 million tonnes. However, a rising population and higher incomes could send demand soaring next year.

The council, which plans to spend C$150,000 ($148,000) on canola oil promotions in India this year and the next, is in talks with some of the biggest hotel chains in India, including Oberoi Hotels and Resorts and Taj Hotels and Resorts.

At this point, the only real commercial customer that we have is the Asian Heart Institute in Mumbai that has switched over to (use of) canola oil, said McArthur, who joined the council in June.

However, for Canola oil to be a success it will have to first wean Indian consumers off cheaper edible oils.

Canola oil, which is more expensive than soybean oil and palm oil, sells at about 150-200 Indian rupees ($2.92-$3.89) a liter. Sunflower oil, on the other hand, is priced at 100-150 rupees per liter.

I think sunflower oil is probably one of our key competitors and they are trying to sell on health, said McArthur, who has 15 years experience in Canadian and global agriculture.