Second part of the interview with Mr Dalmia, Presidente of the Indian Olive Oil Association
- The olive oil price as average is of 800 Rs, compared to 53-55 Rs of the most common peanut oil. Why the indian consumer is privileging or should privilege Olive oil?It might be that they are looking for an healthier feeding or simply it is a logical consequence of a richer Country which is becoming step by step, well oriented towards luxury goods?
Well, Soya and Palm are the most commonly used oils and they cost Rs.70 – 80 per litre, Groundnut and other seed oils cost more. Olive Pomace Oil presently costs about Rs.400 per litre, Olive Oil costs about Rs.650 per litre and Extra Virgin Oil costs about Rs.750 per litre. Please keep in mind that olive oil is used in 1/3rd the quantity of other oils and that Olive Pomace Oil consumption is equal to Extra Virgin consumption for edible purposes. We now expect retail prices in India of all olive oils, after duty cuts, to decline by 10-15%. Used properly, olive oil is not greatly more expensive than other oils considering the health benefits. There is a great need for improvement in our national health about which I shall now speak.
India ranks as World No.1 in cardiac patients with 10% of the population affected. The US and Europe are jointly No.2 with 7% each. WHO expects heart disease to be the single greatest killer in India by 2015. More than 50 million people in India suffer from heart disease and the number is expected to double by 2010. The highest growth of heart disease is among young corporate executives. Additionally, 31% of urban Indians are either overweight or obese. 100 million people in India have high blood pressure. Over 40% of urban Indians have high lipid levels. The situation is already a national emergency.
Certainly, the Indian consumer’s increasing attention to olive oil is a consequence of the increasing number of wealthy households: upper middle and high income households. Essentially, though, it is the consequence of the need for a healthier diet and the recognition of olive oil as a healthier alternative.
- As President of IOA you was able to let cut customs duties on olive oils. What do you think about trade perspectives? What kind of foreign production should be the favorite ones?
Let me just say that the main achievement of the Indian Olive Association (IOA) has been to make the Government now think about olive oil when it thinks about edible oils. Previously, before the formation of the IOA, olive oil did not even enter the consciousness of the Government when it thought about edible oils as olive oil was sold in too small a quantity and consumed by only a small high-end section of the population. This year, in 2008, we expected consumption to grow to 4,600 tonnes from 2,300 tonnes last year – an increase of 100%! The growth in consumption is being supported and encouraged by the International Olive Council which last year commenced a 3-year promotion campaign in India.
With the reduction in duty rate, we expect retail prices to fall over the next few months, by upto 15%, provided that international prices remain stable and there is stability in exchange rates. With a decrease in prices, I think that India may import as much as 5,300 tonnes this year – 15% more than the initial forecast. The recent appreciation of the Euro has hurt our imports from the Euro-zone significantly. Much of the benefit of duty reduction has been negated due to the recent appreciation of the Euro.
One problem that remains: the Government has classified Crude Oils separately from Refined Oils and crude oil is taxed at 0%. We presume Lampante would come in at 0% duty as a crude oil. We wish to have Extra Virgin also classified as a crude oil so that it may also come in at 0% duty.
All kinds of foreign production will benefit. When the Indian market grows exponentially, all countries will get a chance to export their product to India. Of course, Italy and Spain as the leading producers will benefit the most.
- Italy could claim a very prestigious position and image in the international markets, how India could perceive it?
The IOA will promote olive oil generically without distinction between grades or producer countries and is committed to a generic, non-discriminatory policy. However, in the consumers’ mind, Italy has long been established as a producer of olive oil and Spain, as a result of recent efforts by its government and companies, has begun to establish itself firmly in the minds of the consumer. Some time ago, Italy and olive oil were synonymous. At the present time, however, Italy is resting on its previous laurels and past achievements. In another words, Italy is resting on its past position and image. It is making no concerted efforts to promote its brand image and equity in the Indian market. Neither the Government nor the Italian companies are making a focused effort to promote Italian olive oil in India. Other countries, in particular Spain, are making a consolidated and concerted effort to promote the image of their olive oil in India. The IOA, of course, as stated earlier, is committed to promoting olive oil from all countries generically and without discrimination.
- As conclusion, since when IOA became operative and above all, what are the future aims of the Indian Olive Association of which you are presiding?
The founding members of the IOA began working together informally in 2006. The IOA was formally registered in April, 2007 as the national umbrella organization of Table Olive and Olive Oil producers, growers, distributors, importers, users and consumers. The Ambassadors in India of olive oil producing countries, that are members of the International Olive Council, are Patrons of the IOA.
The aims of the Association are:
To promote the consumption of olives and olive oil and the expansion of the market.
To increase awareness about olives and olive oil amongst the general population, especially its nutritional and health aspects.
To introduce standardization in the industry and the market. Specifications and definitions for olive oil, under Indian law, are not the same as those of the IOC or the EU. We have already taken up with our government to update our laws. An inspection and enforcement mechanism will thereafter need to be established to check the products available in the market to make sure they abide by the new specifications.
To establish procedures to assure accurate labeling for the various grades and types of olives and olive oil and to lay down quality standards and encourage their adoption.
To obtain, analyse, compile and circulate statistical information on the consumption, import, production and other aspects of olives and olive oil in India.