Humble rice bran turns a hot commodity
Rice bran has become a soughtafter commodity in India as the world's biggest importer of vegetable oils tries to overcome an edible oil shortage caused by global supply disruptions.
A by-product in rice milling, rice bran has been traditionally used for cattle and poultry feed. In recent years, oil mills have started extracting rice oil, which is popular among health-conscious consumers but historically more expensive than rival oils.
Rice bran oil accounts for a small portion of overall vegoil consumption in India but is one of the fastest-growing among edible oils, industry officials say, and production and imports are set to increase to meet the demand.
The recent rally in global edible oil prices fuelled by Indonesia's restrictions on palm oil exports and disruptions to sunflower oil shipments from Ukraine has wiped out rice bran oil's traditional premium over rival oils. That has triggered a surge in demand for bran oil which has similar taste properties to sunflower oil.
As sunflower oil imports plunged from Ukraine, consumers started replacing it with rice bran oil, said B.V. Mehta, secretary general of the International Association of Rice Bran Oil.
"Because of Covid-19, I was looking for healthier food options. I first used rice bran oil for health benefits six months ago and since then I've been using it," said Aditi Sharma, a Mumbai-based homemaker, who switched to rice bran oil from sunflower oil.
"It tastes good and is good for health as well," Sharma said, referring to the oil's cholestrollowering and anti-oxidative properties.
In India, rice bran oil is now trading at Rs 147,000 per tonne compared with sunflower oil at Rs 170,000. Rice bran oil usually commands around a 25 per cent premium over other oils, but in recent months has been cheaper than imported vegetable oils, making it more affordable for the masses, according to data compiled by Solvent Extractors' Association of India.
Competitive prices boosted rice bran oil consumption since March and has encouraged companies to extract more oil.
The demand for rice bran oil has become so strong that it has flipped the economics for rice millers, who are now prioritising bran oil output. "For rice mills, instead of by-product, now rice bran has become a main product," said Puneet Goyal, CEO at Ricela Group, the country's biggest producer of rice bran oil.
With a vegetable oil shortage, oil mills are ready to pay record high prices for bran, said B.V. Krishna Rao, president of the All India Rice Exporters Association.
Rice bran prices have jumped to Rs 30,000 to Rs 36,000 per tonne compared with paddy prices of around Rs 19,000, which is milled for rice extraction.
However, a shortage of oil processors in rice milling areas remains a key limiting factor on bran oil supply, as rice bran must be processed into oil within 48 hours of being separated from chaff in order to be fit for human consumption.