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Rice Bran Oil and Economic Diplomacy in South Asia

For most households across South Asia, rice is life. It is the stable source of carbohydrates for the more than 1.7 billion citizens of the region who consume it morning, noon and night; and a vital source of income for the 50 million or so farmers who cultivate it across India, Pakistan and Bangladesh. However,...

A view of part of the rice bran oil plant that has recently started production outside Lahore, Pakistan with technological cooperation from India. Photo by Saleem H. Ali

For most households across South Asia, rice is life. It is the stable source of carbohydrates for the more than 1.7 billion citizens of the region who consume it morning, noon and night; and a vital source of income for the 50 million or so farmers who cultivate it across India, Pakistan and Bangladesh. However, the rice plant has now more to offer than just the grain. Across super markets worldwide, a new product is showing up rather unobtrusively called “rice bran oil” (RBO). For the healthy shopper, the labeling on the product will usually reveal its health benefits in terms high omega fatty acids which promote cardiovascular stability. The origins of this new product can be traced back to Asia as well but not any particular traditional diet but to a salubrious confluence of resource economics and chemical engineering. The diminutive rice grain has multiple layers. The outer layer is referred to as the hull and is often discarded for animal feed. There is also an inner layer of bran, which is only 8% of the weight of the grain capsule but contains over 75% of the oil content. Over the past three decades, Indian and Chinese scientists have developed complex chemical engineering processes to extract this oil in edible form.

India can claim ascendancy in developing rice bran oil as a commercially viable alternative to other high temperature oils from soybeans, cottonseeds and peanuts.  The country is now the world’s largest producer and the Indian rice bran oil market size was valued over $600 million in 2014. This market is likely to continue growth as the country has 1.4 million tons of RBO production potential of which only around 900 kilotons is currently produced. In 2015, Government of India lifted ban on RBO exports, thus opening the way for major international competition for world markets.

Regionalizing Rice Bran Technology: The Power of Entrepreneurship

The rice bran industry in India has added considerable value to the most ubiquitous of agricultural products but the other major rice producer of South Asia – Pakistan (the world’s fourth largest producer of rice) – has not been a beneficiary of this new growth opportunity. Enter, Abid Butt, a self-made serial entrepreneur from Karachi and a World Economic Forum “Young Global Leader.” When Abid saw the rise of RBO products on his grocery store shelves, he saw an opportunity for growth in this sector for Pakistan. Moving from his usual comfort zone of logistics supply chain commerce, he took the plunge in developing Pakistan’s first rice bran oil extraction plant.

Soon, Abid was on a steep learning curve in complex solvent extraction technologies and industrial catalysts that are needed to extract the precious oil from the thin layer of rice bran that coats the kernel of the grain. The complexity of the process was daunting but the nearest supplier of the equipment was of course in neighboring India. The only challenge was that the lack of trust between India and Pakistan at the political level made technology transfer between the two countries highly contentious. Yet, Abid was not deterred by the saber-rattling that warrior hawks from both countries frequently display. He managed to work through a business visa process to get Indian engineers to Lahore over a period of several months to literally build the RBO plant in Pakistan on a fair contract for the Indian suppliers.

Earlier this year, I had a chance to visit the facility an hour’s drive from Lahore, near Muridke, which is in the heart of northern Punjab’s rice growing district. The facility stands as a beacon of hope for economic diplomacy between these two acrimonious nuclear powers. If commercializable chemical engineering technology can be shared and developed between the two countries, there are clearly many other opportunities for knowledge-sharing that can bring mutual benefit. All we need is a willingness to see creative synergies of cooperation rather than constant fear-mongering of competition and discord.

Agricultural and environmental research, more broadly for ecosystem conservation, is another win-win area for cooperation between both countries, since both countries share watersheds, airsheds and cannot avoid transboundary pollution no matter how many fences and missiles they may build. Indeed, even within the context of the rice bran oil plant, there are opportunities for collaborative research on some potential pitfalls, that can be faced by such technologies.

Managing Health  and Environment Concerns through Cooperative Research

Despite its demonstrable health benefits as a heart-healthy oil, there have been some concerns raised about the bioaccumulation of arsenic  in the rice bran which deserves greater attention and monitoring. In addition rice grains are susceptible to attack by fungi that can produce the potent aflatoxin and need to be monitored for its presence. Polyarmomatic hydrocarbon solvents used in the extraction of the oil also need careful management and monitoring. These are all areas where research cooperation between rice bran producers could be mutually beneficial for planetary health and consumer safety assurance of the product itself.

The Pakistani plant is also aspiring to follow industrial ecology principles by using rice husk and other waste materials to generate energy. There is also potential to use the RBO for biodiesel production, which would potentially add another product stream that has more environmental and health value. Growth in sun-protection cosmetics is also likely to favor RBO market growth over the forecast period. The Oryzol component in RBO protects against the UV light and can be used as sunscreen agent. Here too research collaboration can be helpful in expanding the market for this product. The RBO market is still in its infancy stage, globally, but particularly in Pakistan and much remains to be seen about its ultimate success.

Yet despite these cautionary elements, RBO is an example of an innovative value-added product which has the potential for augmenting livelihoods for millions of rice farmers and producers in South Asia. Technological cooperation and coordination of environmental health and safety research has much potential for furthering gains in this area for even the most acrimonious of national players in the region!

Acknowledgements: The following have played a pivotal role in the success of this venture and are duly acknowledged: Mujib ur Rahman; AP Sharma; Ayesha Aziz and team; Khalid Tirmizey and team; Danish Elahi and team; Samad Dawood; Ali Shabber; Asif Ansari; Ibrahim Shamsi; Ali Almakky and Muhammad Kamran

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Meet the Author

Author Photo Saleem Ali
Saleem H. Ali is Blue and Gold Distinguished Professor of Energy and the Environment at the University of Delaware (USA) and a Professorial Research Fellow at the University of Queensland, Australia. He is also a Senior Fellow at Columbia University's Center on Sustainable Enterprise. Dr. Ali is a National Geographic Emerging Explorer for 2010 and World Economic Forum "Young Global Leader" (2011). His books include "Environmental Diplomacy" (with Lawrence Susskind, Oxford Univ. Press) and "Treasures of the Earth: Need, Greed and a Sustainable Future" (Yale University Press). He can be followed on Twitter @saleem_ali.