Imagine being a sales representative for Coke in a foreign country that refers to your product as soda.
That’s the conundrum facing the Canola Council of Canada in India.
The regulator in charge of India’s food imports has deemed that canola oil should be labelled as low erucic acid rapeseed oil on raw product entering the country and processed products on grocery store shelves.
“I think it’s just a misunderstanding of what canola is and the difference between it and rapeseed,” said Bruce Jowett, vice-president of market development with the canola council.
Read Also
Avoid bargain-basement canola markets to ease tariff damage
China’s canola tariffs aside, the global oilseed complex has eased to a lower price level and is likely to stay there for now — that is, unless problems develop with crops in the U.S. or South America.
The issue was brought to light recently when federal agriculture minister Gerry Ritz met with influential Indian cabinet ministers during a trade mission to India and China.
“I raised some key market access issues, including canola oil labelling,” Ritz said during a conference call with reporters.
The mislabelling of canola oil is hampering marketing efforts in a country the council believes holds huge potential for the product.
“India is what we refer to as a wave two country for us,” said Jowett.
It is the world’s second largest consumer of vegetable oil behind China and the world’s largest importer of the product.
The U.S. Department of Agriculture expects the country to import 12.33 million tonnes of vegetable oil in 2014-15, led by palm oil at 8.75 million tonnes. Canola or rapeseed oil imports are expected to be tiny by comparison at an estimated 50,000 tonnes. The country does not import oilseeds.
Jowett said sales are low because canola oil is a high-priced commodity in a price-sensitive market, but it’s also a function of a lack of consumer awareness of the product and its health benefits.
“It isn’t a word that is common in the Indian vocabulary,” he said.
“Canola is something very new to them.”
The council believes canola oil is a good fit for India’s growing middle class, which is estimated to be 200 to 300 million people, depending on how middle class is defined.
Indians consume a lot of animal fat, which is leading to health problems in a country of 1.3 billion people.
“It is estimated that by the year 2020, India will have 60 percent of the world’s coronary disease problems,” said Jowett.
He believes that will eventually lead to increased interest in healthy oil such as canola.
“That’s why we see a great success in China is that people are becoming more health conscious.”
The council has been working on a consumer education program in India for the past three years but still has plenty of work to do to boost awareness of canola oil. It doesn’t help that the small amount of product trickling into the country is being mislabelled as rapeseed.
