As India Scours for Edible Oil, Demand for Rice Bran Oil Increases

As the world's largest importer of vegetable oils attempts to deal with an edible oil shortage caused by global supply disruptions, rice bran has grown in popularity in India.

Rice bran, a by-product of the milling of rice, has long been used as livestock feed and poultry. Rice oil, which is preferred by health-conscious customers but has historically been more expensive than competing oils, is now being extracted by oil mills.

According to industry officials, rice bran oil is one of the fastest-growing edible oils, although it only makes up a small fraction of India's total vegetable oil consumption. To satisfy the demand, output and imports are expected to rise.

The traditional advantages of rice bran oil over rival oils have been removed by the sudden rise in global edible oil prices driven by Indonesia's restrictions on palm oil exports and problems in shipments of sunflower oil from Ukraine. Because of this, demand for bran oil, which has similar taste qualities to sunflower oil, has increased.

According to B.V. Mehta, secretary-general of the International Association of Rice Bran Oil (IARBO), when sunflower oil shipments from Ukraine decreased, customers began substituting rice bran oil. Over two-thirds of India's needs for sunflower oil are typically met by imports from Ukraine.

"I was seeking healthier food alternatives because I have COVID-19. Since using rice bran oil for the first time six months ago for health reasons, "explained Aditi Sharma, a housewife from Mumbai who switched from sunflower oil to rice bran oil.

Sharma said, referring to the oil's cholesterol-lowering and anti-oxidative characteristics, "It tastes delicious and is beneficial for health as well."

Currently, rice bran oil costs 147,000 Indian rupees ($1,879) a tonne while sunflower oil costs 170,000 rupees in India.

According to data collected by the Solvent Extractors' Association of India (SEA), rice bran oil normally demands a 25 percent premium over other oils but has recently become less expensive than imported vegetable oils, making it more accessible to the public.

Since March, increased demand for rice bran oil due to competitive prices has encouraged businesses to increase oil extraction.

Sharma stated that she would still buy rice bran oil for her family of four even if premiums increased.

From by-product to main

Since there is such a high demand for rice bran oil, rice millers are now prioritizing the manufacturing of bran oil, which has completely changed their economics.

Currently, only 55% of bran is processed; the remaining is used to make affordable feed.

Even yet, the nation is on track to produce a record 1.05 million tonnes of bran oil this year, up from around 950,000 tonnes in 2021, thanks to several oil processors maximizing output, which should help India in reducing imports of rival oils.

Growing Demand

According to Himanshu Agarwal, executive director of Satyam Balajee, India's largest rice exporter, rice bran oil brands have increased in popularity and customer acceptance has been rising.

According to Goyal of Ricela, even institutional purchasers like PepsiCo and Haldirams are using more bran oil for frying.

However, there are not enough local supplies to meet the growing demand.

"A few companies are importing rice bran oil from Bangladesh, but even Bangladesh has limited surplus for the exports," said IARBO's Mehta.