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Palm Oil the Leader in Global Oils & Fats Supply
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Presentation at the Malaysia / Myanmar Palm Oil Trade Fair & Seminar in Yangon on June 28, 2013
Thomas Mielke, Executive Director of ISTA Mielke GmbH,
Global Market Research on Oilseeds Oils and Meals
28 June 2013
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Global Market Research on Oilseeds, Oils and Meals,
E-mail <Thomas.Mielke@oilworld.de>
ISTA Mielke GmbH – publisher of OIL WORLD - was founded in 1958
ISTA = International STatistical Agricultural Information
Who is OIL WORLD?
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g
Independent, not involved in trading
Leading private authority for global research and market analyses for oilseeds, oils & fats and oilmeals
unbiased information on the past and current global supply, demand and price developments as well as forecasts
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Daily, weekly and monthly publications
2
Introductory statements on how palm oil is linked within all oilseeds and oils & fats on the world market
The Outline of my Presentation
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The dynamics of world supply & demand of oils & fats (edible & ined.)
Biodiesel production has fallen below expectations
Outstanding growth in world palm oil and palmkernel oil production
Consumers worldwide are getting more dependent on palm oil, owing to
28 June 2013
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insufficient supply growth of other oils & fats
Price Outlook
2012/13 -- 187.4 Mn T
Palm Oil 15.9%
1992/93 -- 84.7 Mn T
World Production of 17 Oils & FatsWorld Production of all oils & fats more than doubled in the latest 20 years to 187 Mn T in 2012/13
Soya Oil 22.6%
Palm Oil 29.9%
Rape Oil 13.0%
Sun Oil 7.3% Others/An.Fats 22.1%
Soya Oil 20.3%Rape Oil 10.7%
Sun Oil 9.1%
PKO&CNO 5.5%
Others/An.Fats 38.5%
Palm oil to account for 30% of world production in 12/13
And has become the by far largest
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Sun Oil 7.3%
PKO&CNO 5.1%
Others/An.Fats 22.1%vegetable oil
3
40
45
5055
6017 Oils & Fats: World Production (Mn T)
Palm oil
Insufficient production of seed oils coincided with a slowdown of demand from the biofuel sector in 2012/13+ ample palm oil supplies
For 2013/14 we expect a
15
20
25
30
3540
Rape oil
Soya oil
9 Other oils4 Animal Fats
For 2013/14 we expect a major recovery in the output of seed oils led by sunflower and soya oils if weather cooperates
But the uptrend of palm oil production is likely to slow
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91/92 93/94 95/96 97/98 99/00 01/02 03/04 05/06 07/08 09/10 11/12 13/14
05
10Sun oil
p ydown next season from the exceptional growth rates in the most recent 3 seasons
50
60In % of all 17 oils & fats
Palm Oil: Share of World Market
Share of exports
%
10
20
30
40
Share of production
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O c t o b e r / S e p t e m b e r
99/00 01/02 03/04 05/06 07/08 09/10 11/12 13/140
10
4
420
460
500Production (Mn T)
Area (Mn ha)
10 Oilseeds: World Area and ProductionIn the past 20 years world oilseed production doubled
On rising acreage and yields
About half of the acreage increased came from grains
220
260
300
340
380increased came from grains
But this shift has come to an end and agricultural land has become increasingly tight
Land values more than doubled (partly more than trebled) in the
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88/89 91/92 94/95 97/98 00/01 03/04 06/07 09/10 12/13140
180
220past 10 years
2012/13 -- 463.2 Mn T
S b 1 %
1992/93 -- 229.2 Mn T
World Production of 10 Oilseeds
Soybeans 57.4%
Rapeseed 13.5% Groundnuts 5.9%
Other 5.7%
Soybeans 51.5%
Rapeseed 11.1%
Sunseed 9.5% Groundnuts 7.7%
Other 6.2%
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Rapeseed 13.5%
Sunseed 7.8%
Cottonseed 9.7%Cottonseed 14.0%
5
100
120
140
Soybean Crop Trend
Mn T
World supplies of soybeans were tight in the past 2 years (drought in USA and S.Ameri.)
World supplies of all oilseeds will only stagnate at around
40
60
80
100
U.S.A.
o y stag ate at a ou d530 Mn T in 2012/13.
World oilseed consumption will decline to 457 Mn T in 2012/13, down 6 Mn T y-o-y.
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76/7779/80
82/8385/86
88/8991/92
94/9597/98
00/01 03/04
06/07 09/10
12/13
0
20 Argentina, Brazil & Paraguay
4
5Palm Oil Soya Oil
Sun Oil Rape Oil
Change on Year in Mn T
World Production of 4 Major OilsWorld palm oil production set to rise by 3.5 Mn in 12/13 while the other 16 oils/fats decline 1.9 Mn T combined
Early outlook 2013/14
0
1
2
3Early outlook 2013/14
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O c t o b e r / S e p t e m b e r
07/08 08/09 09/10 10/11 11/12 12/13 13/14
-2
-1
6
10 OILSEEDS: World Production (Mn T)
13/14F 12/13 11/12 10/11
Avg.Change15 Years
to 12/13Soybeans . . . . 284.00* 265.91* 239.10 264.94 +3.5%Cottonseed 42 60* 44 84* 47 12 43 55 +1 8%
More ample oilseed supplies in 2013/14. Biggest increases in soybeans, sunflowerseed, rapeseed and palmkernels
These 4 oilseeds were also the Cottonseed . . . 42.60 44.84 47.12 43.55 +1.8%Grdnuts,shelled 28.00* 27.49* 27.15 27.75 +2.0%Sunflowerseed 38.75* 35.98* 39.44 33.61 +2.9%Rapeseed . . . . 63.48* 62.60* 60.62 61.06 +4.3%
Sesameseed . . 3.93* 3.71* 3.83 3.83 +2.3%Palmkernels . . 14.59* 13.92* 13.29 12.54 +7.4%Copra . . . . . . . 5.33* 5.34* 5.26 4.80 +0.4%Linseed . . . . . . 2.44* 2.04* 2.13 1.82 -0.8%
ese o seeds e e a so t egrowth leaders in the past 15 years
In 2013/14 world production to rise by 21 Mn T and opening stocks up 6 Mn T, boosting
ld li b 27 M T
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Castorseed . . . 1.32* 1.40* 2.03 1.56 +1.3%Total. . . . . . . . 484.43* 463.23* 439.96 455.45 +3.3%
world supplies by 27 Mn T
6
8Annual Change from 2012/13 ( in Mn T)
10 Oilseeds: Estimated Production Change in 2013/14Significant improvement in production in most countries ahead next season
Major exception is China, resulting in much higher
-2
0
2
4
g gChinese import requirementsof oilseeds and products in the2013/14 season.
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EUC.I.S.
CanUSA
ArgBra
AustraliaIndia
China
-4
2
7
50
60
70CHINA: Imports of Oilseeds and Oils & Fats
Mn T
Oilseeds
CHINA: Rapidly risingimport requirements
Mainly of soybeans, but also of rapeseed, groundnuts
20
30
40
Oils & Fats
g ou d utsand many otheragricultural commodities
Following a stagnation ofoilseed imports (at the ex-pense of stocks in 12/13), big jump in imports by 8-9M T i lik l i 2013/14
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94/95 97/98 00/01 03/04 06/07 09/10 12/130
10Mn T is likely in 2013/14
8
10
12Soya oil
Palm oil
Others
CHINA: Imports of 17 Oils & Fats (Mn T)
4
6
8
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96/97 98/99 00/01 02/03 04/05 06/07 08/09 10/11 12/13 0
2
8
1 6 51 8 01 9 5
1 11 21 3
T o ta l U s ag e an d A n n u al C h an g e (M n T )1 7 O ils & F a ts : W o rld D is a p p e a ran c e
Demand Growth doubled in past 10 years (up 63 Mn T)
Rapidly Rising World Consumption of Oils & Fats
6 07 59 0
1 0 51 2 01 3 51 5 01 6 5
4567891 01 1
A n n u a l C h an ge
W o rld D is a p pe a ra n c e
biofuels population income
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88 /89 91 /92 94 /95 97 /98 0 0/01 0 3/04 0 6/07 0 9/10 13 /140
1 53 04 56 0
01234
But major slowing down since mid-2012
160180200
Total Usage in Mn T
17 Oils & Fats : World Consumption
- The year-on-year consumption growth of the biofuel sector has
6080
100120140160the biofuel sector has
slowed down in 2012/13
- The sluggish trend is likely to prevail in 2013/14with little scope for further growth of veg. oil demand
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89/90 92/93 95/96 98/99 01/02 04/05 07/08 10/11 13/140
2040
biofuel food and other
for biodiesel production
9
20
25World Production of Biodiesel (Mn T)
Rising needs of feed-stock for biodiesel production (soya oil, palm oil, rape oil and others) as well as for ethanol (corn, sugar) require additional agricultural land
5
10
15
ag cu tu a a d
This has contributed to a sizeable increase prices of most agricultural products as well as land values
But the growth in biodiesel ti h tl
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2004 2005 2006 2007 2008 2009 2010 2011 2012 20130
5consumption has recently slowed
2013/14 - - 193.8 Mn T
Palm Oil 14,2%
1991/92 - - 83.5 Mn T
World Production of 17 Oils & Fats
Soya Oil 22,7%
Palm Oil 30,0%
Rape Oil 12,6%
Soya Oil 20,1%Rape Oil 11,4%
Sun Oil 9,9%
PKO&CNO 5,2%
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Sun Oil 7,6%
PKO&CNO 5,0%
Others/An.Fats 22,1% Others/An.Fats 39,2%
10
8
10Production Demand
Change From Year Ago in Mn T
17 OILS & FATS: Production & Demand
2
4
6
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O c t o b e r / S e p t e m b e r
00/01 01/02
02/03 03/04
04/05 05/06
06/07 07/08
08/09 09/10
10/1111/12
12/1313/14
0
8
10Production Ending stocks
Change From Year Ago in Mn T
17 OILS & FATS: Production & End'g Stocks
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0
2
4
6
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O c t o b e r / S e p t e m b e r 06/07 07/08 08/09 09/10 10/11 11/12 12/13 13/14
-2
0
11
20
22Palm Oil Sun Oil
Soya Oil 17 Oils & Fats
Annual Stocks / Usage Ratios (%)
17 OILS & FATS World stocks of palm oil were boosted to a record 11.7 Mn T as of end-Dec 2012, Thereof:Malaysia 2.6 Mn T
12
14
16
18a ays a 6
Indonesia 4.0 Mn T
But with consumption picking up sharply, stocks declined by 1.6 – 1.8 Mn T in Malaysia & Indonesia
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99/00 01/02 03/04 05/06 07/08 09/10 11/12 13/14
8
10
24
28
32
12
14
1617 Oils & Fats: Stocks & Stocks/Usage
Stocks/Usage (%)
%Mn T
4
8
12
16
20
2
4
6
8
10Stocks (Mn T)
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E n d - S e p t e m b e r2000
20012002
20032004
20052006
20072008
20092010
20112012
20132014
0
4
0
2
12
Growing Dependence on Palm Oil
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The Success Story of the past 30 Years Substantial growth in world production of palm oil
In 1980: 4.6 Mn T or 8% of 17 oils & fats
In 1990: 11.0 Mn T or 14%
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In 1990: 11.0 Mn T or 14%
In 2000: 21.9 Mn T or 19%
In 2010: 46.1 Mn T or 27% (only 6% of area)
In 2011: 50.8 Mn T or 28% (57% of exports)
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In 2012: 53.7 Mn T (plus 5.9 Mn T of Palmkern oil)
In 2020 at least 78 Mn T of palm oil required by consumers worldwide
13
4
5Annual Change (Mn T)
Palm Oil : World Production
0
1
2
3
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O c t o b e r / S e p t e m b e r
99/00 01/02 03/04 05/06 07/08 09/10 11/12-1
0
222426283032
Malaysia Indonesia
Palm Oil Production in Key Countries (Mn T)In 2013 production of palm oil is set to rise to
close to 29 Mn T in Indonesia and
68
10121416182022
to 19.2 Mn T in Malaysia
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J a n u a r y / D e c e m b e r 1996 1998 2000 2002 2004 2006 2008 2010 2012246
14
Price Attractiveness of Palm Oil
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3400
3600
3800
First position in Malaysian Ringgit/TMALAYSIA: Crude Palm Oil Futures Close
2400
2600
2800
3000
3200
3400
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Prices from 1 Jan 2012 until 21 June 2013
Jan12 Mar May Jun Aug Oct Dec Jan13 Mar MayJun
2000
2200
15
1200
1400
1600
Palm oil, crude cif Rott.
Soya oil, Dutch fob ex-mill
Soya Oil & Palm Oil: Monthly Prices (US-$/MT)
200
400
600
800
1000
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Monthly prices from Jan 1972 until 21 June 2013
72 77 82 87 92 97 02 07 '130
200
Competitiveness of Palm Oil on Energy Market
1200
1350Crude m inera l o il
Pa lm o il, crude
M o n th ly P rices o f P a lm O i l & C ru de M in era l O i l (U S -$ /T )
300
450
600
750
900
1050
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M onth ly pr ice s from J an 20 03 until 21 J une 20 13
Jan03 Jan04 Jan05 Jan06 Jan07 Jan08 Jan09 Jan10 Jan11 Jan12 Jan130
150
300
16
1000
1200
1400Monthly Prices of Tallow & RBD Palm Olein (US-$/T)
400
600
800
1000
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Monthly prices from July 2002 until 21 June 2013
Ja03 Ja04 Ja05 Ja06 Ja07 Ja08 Ja09 Ja10 Ja11 Ja12 Ja13200
400Tallow, Edible, US, fob Gulf
Palm olein RBD, Mal, fob
12
14Production Consumption
Growth Rates in %
Palm Oil : World Output and Consumption
4
6
8
10
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O c t o b e r / S e p t e m b e r 03/04 05/06 07/08 09/10 11/12 13/14
0
2
17
200palm oil + palmkernel oil15 other oils & fats
World Consumption of 17 Oils & Fats
Mn T
Growing Dominance of Palm Oil & Palmkernel Oil Worldwide
50
100
150
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97/98 00/01 03/04 06/07 09/10 12/130
50
40
50
Malays ia
Indonesia
Palm O il Exports (Mn T)
10
20
30Rest of W orld
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O c t o b e r / S e p t e m b e r96/97 98/99 00/01 02/03 04/05 06/07 08/09 10/11 12/13
0
18
8
10Argentina Brazil
U.S.A.
Soya Oil Exports (Mn T)
2
4
6
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96/97 98/99 00/01 02/03 04/05 06/07 08/09 10/11 12/13
0
2
1200
1400
1600
750
900
1050Daily Prices of Soya Oil & RBD Palm Olein (US-$/T)
Soya oil, Arg.fob
G-3 : Exports of Soya Oil ( Mn T )October / September
From: 12/13F 11/12 10/11 09/10 08/09U.S.A. . . .97* .66 1.47 1.52 1.00Argentina 4.59* 4.04 4.67 4.50 4.83Brazil . . . 1.54* 1.89 1.67 1.45 1.91
G-3 : Exports of Soya Oil ( Mn T )April / September October / March
From: 2013F 2012 2011 12/13 11/12 10/11U.S.A. . . .23* .42 .39 .74 .25 1.07Argentina 3.12* 2.20 2.54 1.47 1.84 2.13
200
400
600
800
1000
0
150
300
450
600RBD palm olein, Mal.fob
Soya oil Premiums/discounts
Brazil . . . 1.54 1.89 1.67 1.45 1.91Total . . . 7.10 6.59 7.81 7.47 7.74
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Argentina 3.12 2.20 2.54 1.47 1.84 2.13Brazil . . . 1.08* 1.10 .98 .46 .79 .69Total . . . 4.43* 3.71 3.92 2.67 2.88 3.89
Daily prices from 1 Jan 2010 until 21 June 2013Jan10 Jun Sep Ja11 May Sep Ja12 Jun Sep Ja13
0 -150
19
Rising Dependence on Palmoil
3639424548
Soy, Rape, Sun O ils
4 Anim al Fats
P l O il
World Exports in Mn T17 Oils & Fats
1997/98 - 2011/12:
Palm oil exports +243%
Exports of all 16 other
121518212427303336 Palm O il
9 OtherOils/Fats + 50%
In Oct/Sept 2012/13:
PO exports likely to be up by 3.4 Mn T to 43.7 Mn T
Combined exports of soya
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97/98 99/00 01/02 03/04 05/06 07/08 09/10 11/12 13/140369
12 Combined exports of soya, rape & sun oils down by 0.2 Mn T to 20.3 Mn T
20
2517 Oils & Fats: Exports of Major Countries (Mn T)
IndonesiaIndonesia & Malaysia
expected to export 43.5 Mn T of oils &
there somebody to pick me up tomorrow at the airport10
15
Argentina
Malaysia
fats in 2012/13,
. . thus accounting for 57% of total world exports all oils &
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90/91 92/93 94/95 96/97 98/99 00/01 02/03 04/05 06/07 08/09 10/11 12/130
5U.S.A.
CanadaUkraine
pfats this season.
20
The global dependence on palm oil will continue to rise in the years ahead owing to insufficient production of other oils & fats
Palm oil has competitive advantages over other oils and fats e g much
Concluding Statements
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Palm oil has competitive advantages over other oils and fats, e.g. much higher yields and lower production costs
Palm oil is generally priced at quite sizeable discounts versus other oils & fats
Higher investments are necessary to raise oil palm plantings and yields to get ready for rising palm oil demand in the future
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But this has to done in a sustainable way, in line with the regulations of the Round Table of Sustainable Palm Oil (RSPO)
1200
1400
1600
Soya oil, Dutch, fob ex-mill
Sun oil, EU, fob
Rape oil, Dutch, fob ex-mill
Palm oil, crude, cif N.W.Eur
MAJOR OILS : Annual Average Prices US-$/TPrices of most vegetable oils to fall to a 4-year low inJuly/June 2013/14
RBD Palm olein to $ 840
400
600
800
1000RBD Palm olein to $ 840 Arg soya oil to $ 980
In Rotterdam:Crude palm oil $ 860Soya oil $ 1050
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J u l y / J u n e93/94
94/9595/96
96/9797/98
98/9999/00
00/01 01/02
02/03 03/04
04/05 05/06
06/07 07/08
08/09 09/10
10/1111/12
12/13F13/14F
200Sunflower oil $ 1100Rapeseed oil $ 1100
21
Thank Youfor Your Kind Attention !
If I can be of assistance to you in the future, you are invited to contact me any time.
More details and background information are given in the Oil World Weekly & Monthly Reports, which can all be obtained from the
Internet.
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Thomas.Mielke@oilworld.de
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