Nestle, PepsiCo in talks with Godrej Agrovet to buy palm oil
Packaged foods makers Nestle and PepsiCo are in talks with Godrej Agrovet, one of the country's largest producers of palm oil, to buy refined palm oil locally for some of their biggest brands such as Maggi instant noodles and Lay's potato chips, executives directly aware of the developments said.
Multinationals are sourcing locally amid rising global prices of the commodity as well as logistics costs and heightened scrutiny on the quality of edible oils by the government under the Food Safety & Standards Authority of India (FSSAI). They also aim to cut short months-long import buying cycles and circumvent any potential supply disruptions amid continued global geopolitical turmoil.
So far, Nestle and PepsiCo have sourced palm oil primarily from Indonesia and Malaysia for Indian operations.
«Packaged foods MNCs are in talks with us to source refined palm oil or palmolein and the deals are expected to be clinched within a year,» said Sougata Niyogi, CEO of the palm oil business of Godrej Agrovet. He declined to divulge the names of the food makers and said talks are at initial stages.
In scientific terms, the liquid fraction obtained by fractionation of palm oil after crystallisation at controlled temperatures is known as palmolein.
Two executives with direct knowledge of the developments said both the MNCs have been asked to increase sourcing of palm oil from India by their parent companies.
A spokesperson for Nestle India, which also makes KitKat and Munch chocolates, said in an email: «As a part of our
