April 29, 2020
Cooking oil sees a great demand during lockdown, as urban consumer tend to stock pile for future use. Industry unable to meet the growing demand though working at the capacity of 90 per cent. COVID-19 has set edible oil segment whirling upward with an unprecedented demand due to panic buying and stockpiling by consumers in cities and also due to the onset of month of Ramazan. Oil experts foresee the demand which is abnormally high now will see a dip after the lockdown is lifted.
Out-of-house parties, marriages and other public functions stands cancelled as of current scenario, once normalcy returns, there can be a minor drop in its demand. At the moment segment has become purely demand-driven and will last till lockdown period.
Explaining the consequence, P. Chandrashekhara Reddy, VP Sales & Marketing, Gemini Edibles & Fats India Pvt Ltd (GEF India) said, “We are operating at 80-90 per cent manufacturing capacity. Though our company’s overall sales had not been hit, but we are unable to meet the demand as urban consumer has started stocking edible oil for future needs. We usually run our plants at 70 per cent capacity for nine months of a year to meet the demand in a normal state. Because of Covid-19-induced demand, though we are running our plants at 90 per cent capacity, we are not able to meet the market demand fully.”
Reddy further added that in terms of the operational scenario, and during the initial days of the lockdown itself, Telangana and other State governments have been proactive to identify the bottlenecks the edible oil companies were facing with regards to the movement of raw materials and packaging material to factories.
In the entire continuum of supply chain, the transportation has been limited to supply of essential commodities and raw materials. Edible oil shipping cost has gone up by 70 per cent during the lockdown.
Speaking on the restrictions on imports, Reddy said, “Import of core raw material from other countries has not been impacted as edible oil comes under the essential commodities. All cargo shipments had been smooth. We are receiving sunflower oil from Russia and Ukraine, palmolein oil from Indonesia and Malaysia and soybean oil is coming from Brazil and Argentina. The another aspect that we are observing is in regard to the vessels/ships, which have less than 14-day voyage period, government is making them to wait for few days so that the quarantine is complete”.
About Gemini Edible Oil & Fats India, is in the business of importing, processing, trading and marketing of branded edible oils and specialty fats. The firm is built on the outskirts of Hyderabad and has two port-based facilities in Andhra Pradesh. The company caters to markets in Andhra Pradesh, Karnataka, Odisha, Telangana and Chhattisgarh with its products under the brand ‘Freedom’.