13/03/2008 (Commodity Online), New Delhi - India holds the distinction of the largest producer, importer and consumer of edible oil in the world. To some it is a dubious distinction while to others it is a business opportunity. World over, oil producing countries look towards India’s demand and supply to ascertain their prices which means India virtually decides the world prices of edible oil.

But for an importer, it doesn’t matter who the purchaser is as long as they realize good prices. A recent report on consignment destined to India being diverted to China is the best illustration. Whether the prices increase or not is not a business proposition, what matters is the price realization of the consignment. And with a sufficient supply domestically and the prices in countries like China much higher than what is available in India, it makes sense to see the business first.

With a huge requirement in the offing to feed millions of people visiting China for Olympics, matters can get only worse for India as China will pay extra to get the oil from across the world. Indonesia, Malaysia, Brazil and Argentina will now deal directly with China to get their orders. Indian depends heavily on Malaysia and Indonesia for its supply of Palm oil while Argentina is the destination for sunflower oil.

Investors need to look beyond the Brics (Brazil, Russia, India and China) for future growth opportunities, according to a new report from PricewaterhouseCoopers (PwC).

‘The World in 2050: Beyond the BRICs’ concludes that long-term prospects for China, India and other so-called ‘E7’ economies (Brazil, Mexico, Russia, Indonesia and Turkey) are still upbeat, but the report looks for the first time at an additional 13 emerging economies that also have the potential to grow significantly faster than the established Organisation for Economic Co-operation and Development (OECD) countries.

Earlier, in March 2006, PwC published a report highlighting the rapid growth and increasing global significance of what are called the `E7’ emerging economies: the `BRIC’ economies of China, India, Brazil and Russia, plus Mexico, Indonesia and turkey.

Meanwhile, John Hawksworth, head of macroeconomics at PricewaterhouseCoopers said: “The global centre of economic gravity is already shifting to China, India and other large emerging economies and our analysis suggests that this process has a lot further to run.

“Our latest projections suggest that China could overtake the US in around 2025 to become the world’s largest Economy and will continue to grow to around 130% of the size of the US by 2050. India could grow to almost 90% of the size of the US by 2050. Brazil seems likely to overtake Japan by 2050 to move into fourth place, while Russia, Mexico and Indonesia all have the potential to have economies larger than those of Germany or the UK by the middle of this century. But the fastest mover could be Vietnam, with a potential growth rate of almost 10% per annum in real dollar terms that could push it up to around 70% of the size of the UK Economy by 2050.”

As per the report, India rather than China, tops the growth league table, a reflection of India’s working age population which is projected by the UN to continue to grow at a healthy rate unlike China, and the fact that there is greater scope for productivity and education levels to rise across Indian population, enabling the country to catch up with OECD countries in the long run.

The key to achieving the growth potential, indicated by the report, will be establishing and maintaining a macroeconomic, legal and public policy environment conducive to trade, investment, increased education levels and hence economic growth. After 2030, the younger and faster growing Indian population is expected to age, experiencing a gradual deceleration.

The E7 emerging economies will by 2050 be 50% larger than the current G7 (the US, Japan, Germany, the UK, France, Italy and Canada). China is expected to overtake the US as the largest Economy in around 2025 in these updated projections, while India is now assessed as having the potential nearly to catch up with the US by 2050.