Valley Cottage, NY -- (SBWIRE) -- 07/14/2017 -- Cottonseed oil is an oil extracted from the seeds of cotton. Its production process involves pressing and extraction of oil from the cotton seeds followed by purification and refinement. The refinement of the oil is the key step as it helps in removing gossypol, a naturally occurring toxin that protects the cotton plant from damage. Cottonseed oil is essentially a by-product of the cotton industry along with cottonseed meal, hulls and linters. Over 10-15% of a cotton farmers income is expected to come from these by-products, making them considerably valuable products in cotton processing operations.

Market Dynamics of Cottonseed Oil Market:

The edible oil market is a highly competitive space occupied by numerous types of oils. The presence of many substitute products is a considerable drawback for the cottonseed oil market. From a consumer point of view, this represents a highly trend-driven market. The introduction of a new and healthy oils is bound to eat into the market of traditionally used oils, at least for a certain time period. This is regarded as a reason for the severe fluctuations observed in cottonseed oil retail demand and market values.

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One key advantage in this scenario is in regard to the industrial use of cottonseed oils. The product is widely used in various food and beverage products. Such large scale operations rely on a consistent supply chain, which is going to get disturbed in the event of a change of base ingredient, and as such are not impacted by volatile market trends. Cottonseed oil is a good source of antioxidant- tocopherol. The other advantages enjoyed by cotton seed oil are a low relative price and easy availability in cotton producing regions.

With the increasing public understanding of the composition of such oils, the fat and nutrient profiles of cooking oils become very important. Given the relatively high fraction of saturated fats in cottonseed oil, this becomes a significant constraining factor for the market.

Market Segmentation of Cottonseed Oil Market:

Cottonseed oil market is segmented by end-use application, raw material type and region. On the basis of end-use application, cottonseed oil market is segmented on the basis of retail, food processing, cosmetic applications and other industrial uses. The retail segment is centered on its use as a cooking oil. Given its high smoke point, cottonseed oil is mostly used for deep frying and baking. It is mostly used as a cooking medium and is also part of various fried and processed foods such as potato chips and French fries. Due to its ability to form a beta prime crystal, which enables a consistent texture and appearance, cottonseed oil is a major ingredient in whipped toppings, margarines, shortenings, spreads and icings. . Unlike other cooking oils cottonseed oil has a neutral taste, meaning it doesn't alter the natural taste of food being prepared over it. Due to this reason it is used as a salad oil, wherein enhancing the flavor of the salad ingredients is considered primal.

Cotton seed oil is also used in several personal care or cosmetic products such as soaps, cosmetics and detergents. As mentioned above, untreated cottonseed consists of gossypol, a toxin present in cotton. Due to this reason, untreated cottonseed oil is used as an insecticide. Other minor applications of the product include its use in making rubber and explosives.

On the basis of raw-material type, the market is segmented into genetically-modified (GM) cotton and non-GM cotton. The growing negative perception around GM crops makes this an important variable. Due to the promise of increased returns, many cotton farmers in the developing world switched to GM cotton over the last decade. It is estimated that GM cotton is cultivated in over 25 million hectares across the world, with over 75% of US cotton being genetically modified. This dominance of GM cotton is expected to decrease in response to growing consumer concerns and farmer protests across the world.

Regional Outlook of Cottonseed Oil Market:

Geographically, the global cottonseed oil market can be divided by major regions which include North America, Latin America, Western Europe, Eastern Europe, Asia Pacific excluding Japan, Japan and Middle East and Africa. Both on the production and consumption side, the market is heavily dominated by India and China. These countries produced and consumed over 55% of the total cottonseed oil made during the 2015-2016 period. Pakistan and Uzbekistan are the other major regions in the cottonseed oil market. This dominance by Asia countries is largely attributed to large amount of cotton cultivation in the region and the high domestic demand for low-priced cooking oil.

United States (U.S.) is a major producer and consumer of cottonseed oil in the North American region. Unlike the Asian countries, U.S. also exports a considerable portion of its cottonseed oil to other regions. Brazil and Turkey are the other important regions in the market. Eastern European nations such as Azerbaijan are also important but are limited by weak domestic consumption.

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Key Market Players in Cottonseed Oil Market:

Some of the key players of the market include, Cargill, Incorporated, Archer Daniels Midland Compan (ADM), PYCO Industries, Bunge Limited, Louis Dreyfus, Adani Wilmar (Fortune Foods), Maharashtra Solvent Extraction (P) Ltd, Oilseeds International, Ltd., maong the others.