Olive Oil Sales Skid On Slippery Patch In India

After impressive growth rates of 66% and 42% in FY 2013 and 2012 respectively, the olive and olive pomace oil import to India dropped by 10% in 2014. Though table olives remain popular in the country, India remains one of the smallest importers internationally due to one of the highest customs duty rates of 44% to 51% on this product. Has the green fruit lost its bite in India? Vinita Bhatia explores.

Earlier this year, one could not miss the television ads about olive oil – how it was a healthier alternative to other vegetable-based oils. Well known chefs and celebrities alike endorsed different types of olive oil, and supermarkets started prominently displaying different olive oil brands. However contrary to the popular notion, the olive oil industry seems to have hit a slippery patch in India.

According to a release by the Indian Olive Association, olive and olive pomace oil imports to India in scal year ended March, 2014 were 10,718 metric tonnes (MT), down from 11,917 MT in the previous year – a decrease of 10%. The growth of olive oil imports to India has slowed when compared with the blistering rate of 66% witnessed in the previous fiscal. The year ending March, 2012 saw a growth rate of 42%.

Much of the growth deceleration is due to a rise in olive oil prices of upto 40% in 2012 and 2013. This was due to a severe crop shortfall in Spain in 2012-13 coupled with the steep depreciation of the rupee. The economic slowdown in India saw a drop in consumer willingness to shift from other seed oils to olive oil.

Table olives are rich in mono-unsaturated fats, Vitamin E, polyphenols and flavonoids and reportedly lower high blood pressure and reduce the risk of heart disease, stroke and certain cancers.
Table olives are rich in mono-unsaturated fats, Vitamin E, polyphenols and flavonoids and reportedly lower high blood pressure and reduce the risk of heart disease, stroke and certain cancers.

These fiscal realities apart, few Indians have shifted to olive oil as their cooking medium in India. One reason is the perception that it works best with international cuisine.

Gurgaon-based Parul Pratap Shirazi agrees with this conjecture. “I haven’t switched completely to olive oil though I do use premium EVOO raw olive oil while cooking European dishes. I have not given up on our regular cooking medium, which is blended cooking oil,” she explains.

Mumbai’s Rhea Mitra-Dalal too uses olive oil, but mainly for salad dressing or with balsamic vinegar to dip good bread in. “For cooking I use mustard or sunflower oil, and ghee,” she emphatically states.

JUMP IN TABLE OLIVE IMPORTS
Interestingly, table olive imports jumped to 1,198 MT in the year ended March, 2014, up from 842 MT in the previous year – a growth rate of 42%. Table olives are rich in mono-unsaturated fats, Vitamin E, polyphenols and flavonoids and reportedly lower high blood pressure and reduce the risk of heart disease, stroke and certain cancers.

Sadly, awareness of these health benefits is low in India. Another reason why India is amongst the smallest importers of table olives internationally is the high customs duty rates – between 44% to 51% – levied on olive imports from countries like Spain.

Some farmers in Rajasthan and Punjab have started producing olives in the country, but the production is too insignificant to count. Earlier this year, Interprofessional Olive Oil from Spain, the country’s olive oil industry representative, earmarked €5 million for investment in India and South East Asia, till 2017. It appointed Publicis Capital as its ad agency to aggressively promote the use of olive oil and manage the ‘Join The Olive Oil Revolution’ campaign in India.

Additionally, this year’s crop production has returned to normal and the economic situation in India is stabilizing. VN Dalmia, President of the Indian Olive Association, expects these factors will translate into a 20 per cent reduction in retail prices of olive oil in India.

It is encouraging to see all the players in the olive oil industry banding up to propel its growth in India. it now remains to be seen if customers will lap up their efforts and shift to olive oil as a medium for cooking.

Images courtesy: Join The Olive Oil Revolution