The Bhutanese Leading the way.
With higher dependence on imported edible oils, the local vegetable oil industry faces an uphill battle. Local producers advocate for healthier, chemical-free oils amidst a market flooded with cheaper, imported alternatives.
The World Health Organization’s (WHO) 2023 deadline for eliminating industrially produced trans fats looms, our local vegetable oil industry struggles with challenges in a market dominated by imported products.
Healthline News reports that refined vegetable oils became accessible only in the 20th Century, coinciding with advancements in extraction technology. These oils are typically derived from plants using chemical solvents or oil mills, followed by purification, refining, and occasionally chemical modification.
Consumers focused on health prefer oils extracted by crushing or pressing plants or seeds, avoiding those processed with chemicals.
PW Oil and Fodder produces organic groundnut and mustard oils using cold-pressing methods to preserve natural nutrients, promoting health and wellness.
PW Oil and Fodder’s CEO, Pema Wangchuk, which produces the Zukham brand said cold pressed oil has better health benefits over chemically processed refined oils. “The oils crafted by our company stand apart from adulterated imported refined oils in every aspect. Firstly, our oils are pure, organic, chemical-free, and cold-pressed, ensuring the preservation of natural nutrients and flavors. Unlike refined oils, which pose risks to human health due to their chemical processing, our groundnut and mustard oils offer numerous health benefits that help prevent non-communicable diseases.”
However, his goods also face market difficulties due to the influx of cheaper, adulterated imported oils.
He said, “Navigating the current market landscape is challenging due to the influx of adulterated, cheaply imported refined oils that undercut prices and attract cost-focused consumers. Our dedication to producing pure, organic oils results in higher production costs due to expensive raw materials. Furthermore, essential commodities, including edible oils, are supplied through FCB for government needs, but FCB only import oils and doesn’t purchase our local products.”
WHO’s 2018 call for a trans fat free world aimed to reduce heart disease and promote healthier alternatives such as mustard, sunflower, rapeseed, groundnut, and soybean oils.
Meanwhile, Kenpa Private Limited stands as the sole domestic manufacturer of vegetable oils, producing fortified soybean and palm oils which are chemical free at their Pasakha facility.
Tenzin Tshering, CEO of Kenpa Private Limited, highlights the company’s commitment to quality, stating, “Our oil is different from imported oil because we do not mix it with other harmful chemicals. Buyers needing large quantities for frying have noted a superior finish with our oil.”
Kenpa Private Limited imports raw materials from third countries, ensuring their oils are fortified with vitamins A and D and free from argemone oil, a harmful contaminant.
Despite these advantages, he points out significant market challenges, particularly the competition from untaxed import of edible oils.
“Indian oils have a huge price advantage. We face higher costs due to imported raw materials and packaging, which are taxed,” he explains. “They also sell at a cheaper price since their quality is not as good as what we supply. I believe other harmful chemicals are being mixed due to which they can supply at a cheaper price. The fixed cost for the Indian oils manufactured in India is relatively less compared to Bhutan. Also, customers always look for the cheaper price but do not care about the quality. This decision can impact their health a lot. I believe if oils being imported from India are taxed, then we can compete at the same level.”
Several edible oils from India have faced bans or restrictions in the US and Europe primarily due to concerns over health, safety, and quality standards. Oils such as Mustard Oil, Argemone Oil and Vanaspati Ghee.
These oils have been restricted due to health risks associated with their components or due to adulteration concerns. Regulatory bodies, like the US Food and Drug Administration (FDA) and the European Food Safety Authority (EFSA), enforce these bans and restrictions to ensure consumer safety.
Pema Wangchuk said there has to be government support for local producers through policies limiting refined oil imports. He stresses that without such measures, domestic businesses will struggle to compete and survive. He also highlighted the need for a fair competitive environment to boost the economy and promote healthier consumer choices, stating that government intervention is crucial for the industry’s and the nation’s economic well-being.
The current price for Kenpa’s oils is Nu 69 per liter, but that prices fluctuate daily based on market supply and demand. PW Oil and Fodder’s groundnut oil is priced at Nu 449 and mustard oil at Nu 299, yet the company still incurs losses due to rising raw material costs.
Despite carefully setting these prices, the soaring costs have outpaced their pricing structure. As a result, covering raw material expenses is challenging, and achieving profitability seems out of reach for them.
In 2023, Bhutan imported 13,852.6 tons of edible oil valued at Nu 1.6 billion. From January to May of this year alone, the country imported 5,619.45 tons of edible oil, totalling to Nu 596.37 million.
