Industry observers feel that the situation is expected to be translated into capacity additions by companies. "The capacity utilisation at Marico Industries is close to 100 per cent. The company will be looking at creating more capacity. However, this will not happen over night," said Marico Industries Ltd chief executive officer (health care), Pranab Datta.

The move to ban loose oils and the fear psychosis involved with the dropsy attack accentuated pressure on the branded and packaged oils market with a shortage emerging at the retail level. However, this is not likely to become grave since the government has made packaging mandatory from December 15, said analysts.

The beginning of the year witnessed a severe shortage of oil due to crop failure. Now, with the sudden upsurge in the number of consumerstaking to packaged edible oils, a vaccum has been created wherein the packaged edible oil makers are finding it difficult to meet the growing demand, said an industry source."Our product stocks are moving very fast. As against a build-up in stock position of a normal one or two weeks, there is actually no stock build up now," said Datta.

With the Dropsy attack, manufacturers of packaged and branded edible oils comprehend an opportunity with the conversion rate increasing. Analysts estimate the conversion rate to go up to 8-10 per cent this year leading to a volumes growth of almost 10 per cent this year in the packaged goods market.

The total volume of the packaged branded edible oils is close to 1.77 lakh tonnes per annum. The loose oils market in India is huge and forms 90 per cent of the total market.

Major players in the branded packaged edible oils market are ITC, Marico Industries with brands like Sweekar and Saffola, Hindustan Lever with Flora and Godrej Foods with Godrej Sunflower and the latestlaunch of Cooklite.In the consumer packed refined oil market, the combined market share of Marico brands Saffola and Sweekar increased to 16.4 per cent from 15.7 per cent in March. Saffola and Sweekar contribute 18 per cent and 16 per cent to the sales of Rs 490 crore.

Datta said that with an expected surge in demand these brands would garner over a percentage point in market share during the year.

Godrej has a combined market share of 11 per cent in the market, while ITC's Sundrop sunflower oil is the single largest selling brand.

With the recent decision to make packaging of edible oils mandatory, the unorganised sector will have to incur higher costs in packaging. The only other option for them is to close down operations. With this, the price gap between the currently branded edible oils and the unorganised segment will narrow to some extent.

The proposed ban will also necessitate the unorganised players to install the necessary systems in place complying with the PFA (Prevention of FoodAdulteration Act of 1954) standards. "The manufacturers of branded and packaged edible oils, to whom the brand equity is of utmost importance, are taking all the care to avoid contamination," according to Marico Industries Head -Technology R&D (Foods) JI Lewis.

Check points have been maintained at various levels to test for traces of contamination of any kind right from the raw material stage till the brand is packaged and dispatched.

The raw material stage is the first stage wherein a check is done for any contamination in the containers also. The second stage is that of refining of the oil where tests are conducted. Finally, tests are conducted both before and after packaging. There are two levels of checks, one at the factory level and the other at the corporate level. u