MALAYSIA – RUSSIA PALM OIL TRADE FAIR & SEMINAR POTS RUSSIA 2013 MALAYSIAN PALM OIL: COMPLEMENTING RUSSIA’S OILS & FATS REQUIREMENTS DR YUSOF BASIRON CEO, MALAYSIAN PALM OIL COUNCIL 16 SEPTEMBER 2013 THE RITZ-CARLTON, MOSCOW, RUSSIA
PRESENTATION OUTLINE 1. Global Oils & Fats Scenario 2. Demand by Major Users 3. Growth Trend of Oils & Fats Supply 4. Palm Oil Health Facts 5. Bilateral Trade Malaysia-Russia 6. Role of Malaysian Palm Oil 7. Conclusions
GLOBAL OIL AND FATS SCENARIO
WORLD OILS & FATS PRODUCTION (1990 – 2012) 60,000 50,000 40,000 (‘000 MT) 30,000 20,000 10,000 - 1990 2000 2010 2012 Palm Oil 11,013 21,874 46,011 53,446 Soybean Oil 16,097 25,531 40,217 41,758 Rapeseed Oil 8,160 14,470 23,966 24,444 Sunflower Oil 7,869 9,700 12,551 14,831 Others 37,752 43,130 49,813 51,776
WORLD OILS & FATS CONSUMPTION (1990 – 2012) 1990 2000 2010 2012 Palm Oil 11.08 21.75 45.57 51.74 Soybean Oil 16.13 25.17 39.13 41.68 Rapeseed Oil 8.2 14.27 23.62 24.13 Sunflower Oil 7.89 9.47 12.8 14.52 Others 37.61 43.09 50.59 51.54 Total 80.91 113.75 171.71 183.61 Population (billion) 5.27 6.07 6.77 7.02 Gross World Product 27.54 43.61 74.54 83.12 (trillion USD)
WORLD OILS & FATS CONSUMPTION (1990 – 2012) 200 90 183.61 83.12 180 171.71 80 74.54 160 70 140 60 (US$ Trillion) 113.75 120 50 100 43.61 40 80.91 80 30 27.54 60 20 40 10 20 6.77 7.02 6.07 5.27 0 0 1990 2000 2010 2012 Consumption (Million MT) Global Population (Billion) Gross World Product (US$ Trillion)
OILS & FATS CONSUMPTION BY MAJOR COUNTRIES (2012) Consumption Country Population (Million) Kg/year (million MT) China 1,354 34,290 25.32 EU-27 504 23,540 46.71 India 1,241 18,870 15.21 USA 315 17,470 55.46 Indonesia 242 8,310 34.34 Brazil 197 7,840 39.80 Pakistan 182 3,880 21.32 Argentina 41 3,500 85.37 Russia 143 3,220 22.52 Egypt 84 1,950 23.21
CONSUMPTION – PALM OIL VS OTHER OILS 1990 2012 Palm Oil Palm Oil Others 14% 28% 28% Soybean Others Oil 46% 20% Sunflower Oil Soybean Rapeseed Sunflower 8% Rapeseed Oil Oil Oil Oil 10% 23% 10% 13%
WORLD OILS & FATS PRODUCTION (2012) 60,000 50,000 (‘000 MT) 40,000 30,000 20,000 10,000 - Palm Oil Soybean Oil Rapeseed Oil Sunflower Oil Others Series1 53,446 41,758 24,444 14,831 51,776
OILS & FATS EXPORTS (PALM OIL VS OTHER OILS) 1990 2012 Others 15% Sunflower Others Oil Palm Oil 34% 10% Palm Oil 36% Rapeseed 56% Oil Soybean 6% Oil 13% Sunflower Soybean Oil Rapeseed Oil 9% Oil 14% 7%
NET IMPORTING AND EXPORTING COUNTRIES FOR OILS AND FATS (2012) – REFLECTING REAL AVAILABILITY China EU-27 India Net Exporters North Africa Net Importers Pakistan Bangladesh Iran Mexico Indonesia Egypt Malaysia Japan Argentina Turkey Brazil South Africa Ukraine South Korea Canada Nigeria Philippines Taiwan Russia Other -15,000 -10,000 -5,000 0 5,000 10,000 15,000 20,000 25,000 30,000 ('000 MT)
TRACKING CPO PRICES AGAINST STOCK USAGE RATIO 4,000 16.00% 3,500 14.00% 3,000 12.00% 2,500 10.00% 2,000 8.00% 1,500 6.00% 1,000 4.00% 500 2.00% 0 0.00% 2006 2007 2008 2009 2010 2011 2012 2013F SUR CPO Price Forecasted CPO Average Forecasted CPO Higher Forcasted CPO Lower
GLOBAL OILS AND FATS SUPPLY AND DEMAND 2008 2009 2010 2011 2012E 2013F (‘000 T) 18,027 19,790 20,947 22,056 23,263 26,636 Opening Stock 159,891 164,776 171,917 178,833 185,935 188,830 Production 60,983 63,670 65,861 66,980 71,439 73,042 Import 60,944 64,168 66,560 68,115 71,525 73,208 Export 158,168 163,121 170,108 176,491 182,478 187,432 Consumption 19,790 20,947 22,056 23,263 26,636 27,869 Ending Stock 12.51% 12.84% 12.97% 13.18% 14.60% 14.87% Stock Usage Ratio Source : Oil World MPOC Estimates
WIDE DISCOUNT OVER SOYBEAN AND SUNFLOWER OIL Price (US$/MT) Source: Oil World 1,100 1,300 1,500 1,700 1,900 2,100 300 500 700 900 Jan-02 Jul-02 Jan-03 Jul-03 SFO, Rott CPO, Rott Jan-04 Jul-04 Jan-05 Jul-05 Jan-06 SBO, Rott Jul-06 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13
WORLD CULTIVATED AREA OF OILSEEDS Land Use Type Total Area (mil ha) As % Area Total Agricultural Land 4911 100 Oil Seeds 258.03 5.25 Soybean 103.88 2.12 Rapeseed 33.28 0.68 Sunflower 25.83 0.53 Oil Palm 14.14 0.29 Coconut 9.76 0.2 Other Oil Seeds 57.8 1.17 Malaysian Palm Oil 5.07 0.1 › 5.25 percent of total land area planted with oil seeds › Only 0.29 percent of world agricultural land is used for palm oil and Malaysian palm oil only took 0.1 percent Source: FAO, Oil World (2012), MPOB (2012)
SCARCITY OF LAND – EXPANSION VS PRODUCTIVITY 4.73 Higher palm oil yields – a solution to 0.73 land 0.58 0.40 scarcity Soybean Sunflower Rapeseed Oil Palm Production (Mn % of Total Average Oil Yield Total Area (Mn Oil Crop T) Production (t/ha/year) Ha) % Area Soybean 41.75 22.54 0.40 103.88 40.26 Sunflower 14.92 8.06 0.58 25.83 10.01 Rapeseed 24.21 13.07 0.73 33.28 12.90 Oil Palm 1 66.96 36.15 4.73 14.14 5.48 Total 2 160.21 258.03 Note: 1 for palm oil and palm kernel oil Source: Oil World, Dec 2012 2 for 7 major oils (groundnut, coconut, cottonseed and above oils)
The FAO Oils/Fats Price Index The FAO Food Price For 2012 as a whole, the index averaged 225, which For 2012 as a whole, the Index averaged 212, 7.0 percent less compares with 252 in 2011. The main reason for the fall than in 2011, with the sharpest declines registered by sugar(17.1 percent), dairy products (14.5 percent) and in December is the continued build-up of large global inventories of palm oil – as abundant production in oils (10.7 percent). The 2012 price falls were much more modest for cereals (2.4 percent) and meat (1.1 percent). Southeast Asia coincided with a protracted weakness of import demand. Source: http://www.fao.org/worldfoodsituation/wfs-home/foodpricesindex/en /
WORLD’S FASTEST GROWING ECONOMIES
Oil palm is the most efficient, effective and highest yielding among all vegetable oils produced Million ha / Million MT 120 103.88 100 80 60 52.81 41.75 40 33.28 25.83 24.21 14.92 20 14.142 0 Palm oil Sunflower oil Rapeseed oil Soybean Oil Land Area (mil ha) Production (mil MT) Source: Oil World, December 2012
MALAYSIAN PALM OIL EXPORTS (2008 – 2012) 18,500,000 18,000,000 17,500,000 17,000,000 (MT) 16,500,000 16,000,000 15,500,000 15,000,000 14,500,000 14,000,000 2008 2009 2010 2011 2012 (MT) 15,412,512 15,880,744 16,664,068 17,993,265 17,575,486
MALAYSIAN PALM OIL MONTHLY PRODUCTION, EXPORT & ENDING STOCK (2011 -2013) 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 500,000 0 Stock Export Prod Source: MPOB
PALM OIL HEALTH FACTS
AREAS OF OPPORTUNITIES FOR MALAYSIAN PALM OIL – A MALAYSIAN PRODUCT INNOVATION
INNOVATION COMES IN MANY FORMS, ALL SHAPES AND SIZES! The practice of frying foods to increase palatability and increase consumer appreciation is rated among the top 20 innovations in the food industry National Academy of Science, Royal Society, United Kingdom, Sept. 2012
FATTY ACID PROFILE & OXIDATIVE STABILITY Palm AOM 50 51 38 10 Lard AOM 25 43 47 9 1 27 18 54 Cotton AOM 25 Soybean AOM 15 15 23 54 8 Com AOM 25 14 28 57 1 Sunflower AOM 14 13 15 71 1 Canola AOM 18 7 62 21 10 Low Lin canolca (C5) AOM 30 7 62 26 3.5 Low lin Soy AOM 20 16 26 55 3 Natreon Sun AOM 53 8 87 4 Natreon Canola AOM 42 7 72 18 2 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Sats Oleic 18:1 Linoleic 18:2 Linolenic 18:3 Source:
OXIDATIVE STABILITY OF OILS 90 Soya bean 80 Lard PV or O2 uptake Palm Olein 70 60 50 40 30 20 10 hrs. 10 0 0 hrs. 0 hrs. 10 hrs. 15 hrs. 20 hrs. 25 hrs. 30 hrs. 40 hrs. 45 hrs. 50 hrs. Time taken for Peak Peroxide Development An animal fat such as lard, despite low linoleic acid has limited frying capabilities. Palm olein is highly stable and a blend of olein with soybean oil may help provide better frying characteristics and consumer acceptance.
Deterioration during Frying PALM OLEIN IS SUPERIOR TO PEANUT OIL FOR DEEP FRYING Oil hours FFA % Smoke Viscosity Polymers % Foam point ˚C (CP) Index * 0 0.02 235 50 0.2 Peanut Oil 82 0.28 229 102 12.6 10.2 0 0.03 222 49 0.4 Palm olein 82 0.32 182 72 6.3 9.4 Longer shelf life of fried food with no rancid or off flavors produced for longer period as compared to other oils. Fried Packaged Products: Minimum of 6 to 12 months shelf life, therefore can stay much longer on the shelf as compared to foods fried in other oils.
PALM OIL FRACTIONS WITH DIFFERENT IODINE VALUE RANGES FOR FOODS Palm Oil IV 51 - 53 Olein Hard Stearin IV 57 - 59 IV 32 - 36 Super Olein Soft PMF Super Stearin Soft Stearin IV 64 - 66 IV 42 - 48 IV 17 - 21 IV 40 - 42 Top Olein Hard PMF IV 70 - 72 IV 32 - 36 Various tailor made fractions from palm are ideal for direct applications or as blended products throughout the food and frying industries.
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