Palm Oil the Leader in Global Oils & Fats Supplympoc.org.my/upload/Plenary_Paper-Thomas-Mielke.pdf · Palm Oil the Leader in Global Oils & Fats Supply ... The dynamics of world supply

1

Palm Oil the Leader in Global Oils & Fats Supply

there somebody to pick me up tomorrow at the airport

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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28 June 2013


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2

Introductory statements on how palm oil is linked within all oilseeds and oils & fats on the world market

The Outline of my Presentation


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


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

28 June 2013


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

28 June 2013


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

28 June 2013


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

28 June 2013


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%

28 June 2013


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.

28 June 2013


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

28 June 2013



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

28 June 2013


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.

28 June 2013


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

28 June 2013


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

28 June 2013


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

28 June 2013


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

28 June 2013


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%

28 June 2013


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

28 June 2013



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


0

2

4

6

28 June 2013


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

28 June 2013


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)

28 June 2013


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

28 June 2013


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%


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)

28 June 2013


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

28 June 2013



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

28 June 2013


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

28 June 2013


3400

3600

3800

First position in Malaysian Ringgit/TMALAYSIA: Crude Palm Oil Futures Close

2400

2600

2800

3000

3200

3400

28 June 2013


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

28 June 2013


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

28 June 2013


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

28 June 2013


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

28 June 2013


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

28 June 2013


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

28 June 2013


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

28 June 2013


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

28 June 2013


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

28 June 2013


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 &

28 June 2013


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


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

28 June 2013


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

28 June 2013


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.

28 June 2013


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28 June 2013


Documents

Palm Oil the Leader in Global Oils & Fats Supplympoc.org.my/upload/Plenary_Paper-Thomas-Mielke.pdf · Palm Oil the Leader in Global Oils & Fats Supply ... The dynamics of world supply