malaysian palm oil fortune 2014 volume 6
Post on 17-Nov-2014
248 Views
Preview:
DESCRIPTION
TRANSCRIPT
IntroductionIn early 2013, the state government of China report of 2013 projected that GDP for the country was expected to rise by 7.5% and CPI by about 3.5%. Based on latest data from National Bureau of Statistics it showed that the growth of China's GDP was at 7.7% in 2013, and the total import and export value was over US $4 trillion, thus China's economy showed a stead and optimistic trend. On the other hand, CPI in 2013 was 2.6% higher than 2012, whose amount of increase was basically equal to 2012 from 2011 and lower than estimated in the beginning of 2013 (Charts 1 & 2). What's more, the average price of pork in 2013 was only 0.3% higher than 2012, which was basically stable. As a basic necessity, oils & fats consumption in 2013 was not spared from the sluggish economy situation in China.
Oils and Fats – Controversies in ChinaIn 2013 much was reported about China's foods and oils & fats industry. Among the newsmakers are:
- Official Chinese banquets have come under greater scrutiny in recent years amid public anger at excessive government spending on such events.
- Nearly 6,000 dead pigs were found floating in the Huangpu River in Shanghai in last March.
- The bird flu H7N9 break out in April. - Thousands of tonnes of imported
rapeseed oil were found purchased by - Sinograin illegally.
The news about new purchase policy of domestic soybean was reported in the year end. On the other hand, there was also news in the international oils and fat market, such as the drought in Indonesia, which led to the declined supply of Indonesian palm oil to Chinese market.
Oils and Fats Situation in ChinaThese events caused some impact on China's oils and fat import business. Data from Chinese Custom showed that China's total oils and fat import volume was slightly decreased in 2013. On one hand because that the market price of
edible oil declined continuously, the financing difficulty rose and domestic demand for edible oil reduced, the import volume of soybean oil and palm oil decreased. On the other hand the import volume of rapeseed oil increased, mainly because the government purchase for
MPOC FORTUNE
MALAYSIAN PALM OIL COUNCIL KKDN PP 14669/05/2013 (032704) VOL: 6 2014
®
DIRECTOR
Faudzy Asrafudeen Sayed Mohamed faudzy@mpoc.org.my
MANAGERS
Muhammad Kharibi Zainal Ariffin kharibi@mpoc.org.my
Mohd Izham Hassan izham@mpoc.org.my
MARKET ANALYSTS
Asia Pacific Lim Teck Chaii (China) lim@mpoc.org.my
Asia Pacific Mohd Hafezh Bin Abdul Rahman (Excl. China) mhafezh@mpoc.org.my
South Asia Fatimah Zaharah Md Nan fatimah@mpoc.org.my
Middle-East Mohamad Suhaili Hambali msuhaili@mpoc.org.my
Africa Nor Iskahar Nordin iskahar@mpoc.org.my
Europe Azriyah Azian azriyah@mpoc.org.my
Americas Mohd Izham Hassan izham@mpoc.org.my
MARKETING & MARKET DEVELOPMENT DIVISION
For more information, please contact Tel : 603 - 7806 4097 Fax: 603 - 7806 2272
Continued on page 6
Source: National Bureau of Statistic, China
16.0%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
18.0%
20.0%
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
2011 2011 2011 2011 2012 2012 2012 2012 2013 2013 2013 2013
GDP Growth (%)
Chart 1: China GDP Growth (2011 - 2013)
Source: National Bureau of Statistic, China
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
CP
I
Chart 2: China CPI Performance (2011 - 2013)
Jan
- 11
Apr
- 1
1
Jul -
11
Oct
- 1
1
Jan
- 12
Apr
- 1
2
Jul -
12
Oct
- 1
2
Jan
- 13
Apr
- 1
3
Jul -
13
Oct
- 1
3
Jan
- 14
China - Oils and Fats Development in 2013
MPOC FORTUNE • 3
MARKETInsightsIns g
Palm oil scenario in South Africa
Most of the palm oil products imported are in the form of the RBD palm stearin and RBD palm olein. These two products accounted for more than 60 per cent of Malaysia’s exports in 2013. RBD palm olein mainly goes into edible applications such as production of margarine and for deep frying purposes, while RBD palm stearin and palm fatty acid distillate are imported for soaps and laundry soaps production. Besides these, South Africa also imports some finished palm oil products from Malaysia, such as shortening, soap noodles and margarine.
South Africa is basically a liquid oil market. Cooking oil accounts for about 40 to 45 per cent of the total oils and fats usage in the country, with sunflower dominating this market, followed by the soybean oil, corn oil and olive oil. South
Africa’s cooking oil market is estimated at 350,000 metric tonnes annually. The solid fat sector (margarine and shortening), accounts for about 20 to 25 per cent. Various types of margarine and shortening are produced in the country, basically table margarine, bakery and pastry margarine and shortening. Estimates from trade sources show that household margarine consumption estimated around 245,000 metric tonnes of various grades range from low fat to industrial grades.
Growing health concerns are likely to boost the sale of spreadable oils and fats at the expense of butter. The major oils are typically based on blends of palm oil, sunflower oil, soybean oil, cottonseed oil and fish oil. In the confectionery fat segment, market size is estimated at 40,000 metric tonnes annually and most of the requirement is imported from
Malaysia as the local manufacturers do not have the facility and expertise to produce it. The snack food industry is another growing consumer of oils, with between 50,000 to 70,000 metric tonnes being used annually. The food service industry is another sector which could provide greater opportunities for palm oil on the basis that food operators are actively seeking quality and competively-priced products. The soap sector accounts for nearly 150,000 tonnes of oils and fats annually, namely of palm oil and tallow but of late palm oil has replaced a large volume of tallow in this sector.
With the Gross Domestic Product continuing to grow, it is likely to result in rising disposable incomes and wider demand for food products (Table: 1). South Africa is expected to remain a net importer of oils and fats due to the
minimal increase in domestic production and growing demand for oils and fats.
Port of Durban as a GatewayThe southern part of Africa accounts for 22 per cent of the total population of
Africa. Its consumption of oils and fats, which amounted to about 2 million metric tonnes in 2013, made up one-third of the continent’s usage (Table: 2). Per capita consumption within Southern Africa is estimated at 12kg, which is still below the world’s average consumption of 26kg. South Africa has the advantage of having a well-developed transportation and communications infrastructure to support the efficient distribution of imported goods.
South Africa’s major port of Durban can serve as an important gateway for Malaysian export to regional markets, especially to the landlocked countries of Africa. South Africa can also produce its own finished products from palm oil for re-export to the neighbouring countries. In 2013, Malaysia registered about 370,500 metric tonnes compared to 360,070 in 2012 an increase by 2.9 percent. (Table: 3)
Market Drivers for GrowthThe size of the population and low per capita oils and fats consumption in this region provide a strong basis for increased demand in the coming years. The fact still remain that this region is not self-sufficient in producing its oils and fats
requirements underscores the importance of imports – and palm oil has an important role to play in this area. Palm oil has positioned itself as the one
Port of Durban:Reaching out toSouthern Africa Region
This key port occupies at vital crossroads on the trade routes between East and West, at the tip of Africa is also suited to take advantage of the growing maritime trade between the growing economics of South America and Asia.
Table 1: South Africa’s Macroeconomic Indicator
Indicator 2012 2013 2014f 2015f 2016f 2017f
Nominal GDP (US$bn) 384.4 360.4 361.3 429.8 522.3 584.8
GDP per capita (US$) 7,339 6,829 6,799 8,035 9,702 10,795
Real GDP Growth (%) 2.5 2.1 2.5 3.0 3.2 3.3
Source: South Africa Reserve Bank and Business Monitor
Table 2: Oils and Fats Requirement in Southern Africa
Population Consumption Imports Per Capita (mil) (‘000 MT) (000) Consumption (kg)
South Africa 50.7 1,291 926.8 25.5
Zimbabwe 13.0 175.7 135.6 13.5
Zambia 11.6 57 56 5
Madagascar 21.9 78 76.9 3.6
Namibia 2.0 na na na
Botswana 2.1 na na na
Angola 18.5 266.2 218.6 13.2
Mozambique 24.5 163.2 132.8 6.7
Malawi 14.0 63.7 13.2 4.6
Source: Oil World Annual 2013
Continued on page 12
Part 2 of 2
North Port, Port Klang
- Fima Bulking Services Berhad
- Fimachem Sdn Bhd
- Fima Liquid Bulking Sdn Bhd
- Fima Freight Forwarders Sdn Bhd
Butterworth
- Fima Palmbulk Services Sdn Bhd
Jalan Parang, 2nd Extension, North Port, 42000 Port Klang, Selangor, MALAYSIATel: +603 - 3176 7211 Fax: +603 - 3176 5641 Email: enquiry@fimabulking.com
http://www.fimabulking.com
Located in a free commercial zone offer excellent opportunities for• Import and export• Transhipment• MDEX tender (approved
delivery point)• Regional collection / distribution hub
Facilities available : • Carbonsteel• Coated & stainless tanks come
with heating facilities & nitrogen blanketing.
Malaysia’s Largest Independent Common-user Multi-purpose Liquid
Bulk Terminal Operator
Palm oil as a biofuelThe EU’s regulatory framework affecting biofuels is to be framed within the EU’s strategy to tackle climate change, which has required, and is leading to, the adoption of (inter alia) a classification of biofuels based on their production methods or carbon footprints.
Directive 98/70/EC of the European Parliament and of the Council of 13 October 1998 relating to the quality of petrol and diesel fuels and amending Council Directive 93/12/EEC (hereinafter, the Fuel Quality Directive) provides, in relevant part, a framework for EU Member States to reduce by 6% the greenhouse gas intensity of transportation fuels by 2020. In addition, Directive 2009/28/EC of the European Parliament and of the Council of 23 April 2009 on the promotion of the use of energy from renewable sources and amending and subsequently repealing Directives 2001/77/EC and 2003/30/EC (hereinafter, the Renewable Energy Directive) establishes a common framework for the promotion of energy from renewable sources in the EU by setting mandatory national overall targets and measures to promote the use of energy from renewable sources, in order to reduce emissions and to achieve the EU’s climate change and energy policy objectives. In relevant part, the Renewable Energy Directive establishes that 10% of the energy used for transport in the EU should originate from renewable sources by 2020.
While promoting the use of energy from renewable sources, such as biofuels, as a tool to combat climate change, the Fuel Quality Directive and the Renewable Energy Directive cater for sustainability criteria that apply to biofuels, which have a clear impact on international trade in such products, including on palm oil-based biodiesel. The sustainability criteria are directed at avoiding that an increase in demand for such energy sources, as well as the incentives provided for their use, lead to the destruction of biodiversity or result in other counterproductive effects for the environment. They are based on two drivers: 1) biofuels must reach a greenhouse gas emissions’ saving threshold of at least 35% with respect to the greenhouse gas emissions that would have resulted from using fossil fuels (as of 2017, this target will increase to 50% for existing installations and 60% for new installations); and 2) the land used to produce biofuels must have certain characteristics (i.e., not have high biodiversity value nor high carbon stock).
Biofuels that do not meet the sustainability requirements are still allowed in the EU market, but are not eligible for achieving compliance with renewable energy national targets set by EU legislation and are not entitled to financial support. This has a clear impact on the importation in, and marketing within, the EU of biofuels that are defined as ‘unsustainable’, operating as a barrier to trade (de facto if not de jure) and
resulting in trade discrimination, in possible violation of WTO rules. The actual implementation of the sustainability criteria may have clear discriminatory effects, inasmuch as compliance therewith may, in certain instances, be particularly burdensome for certain types of biofuels (i.e., those attributed default values that are lower than the 35% required greenhouse gas saving threshold, like palm oil-based biodiesel or soybean biodiesel) or for certain exporters (those that are not certified under a scheme recognised by the EU), as shown by the WTO dispute triggered by Argentina against the EU before the WTO.
Similar considerations also apply to the EU’s proposed amendment to the Fuel Quality Directive and the Renewable Energy Directive (the so-called ‘ILUC proposal’), which was aimed at addressing the emissions arising from the impact of indirect land use change (ILUC) on greenhouse gas emissions (i.e., those created as a result of increased land demand for the production of biofuels, where such land could have been used for food, feed or fibre production). This proposed amendment would operate a further classification of biofuels into ‘first generation’ biofuels and ‘advanced biofuels’, with the latter set to receive a more favourable treatment in the EU market. In addition, if approved, it would
“Palm Oil andEU Market: Key Issues and Actions by MPOC”
Part 2 of 2
MPOC FORTUNE • 5
Continued on page 9
MARKETInsightsIns g
6 • MPOC FORTUNE
domestic rapeseed oil was predicted to increase and then would increase the profit of trading the imported rapeseed oil. Notably, the import volume of sunflower oil rose nearly 3 times, even though its domestic production remained steady as 183 MT, basically equal to the early years.
Since China's oils & fats market is so large, China's domestic oils & fats production has to increase year after year. Data published by Oil World showed that China’s production was 25.34 million MT, the highest recorded in the last five years. The steady increase in production was mainly due to rising demand for oilmeals to produce animal
feed. As soybean’s protein content is most price competitive, this led to higher increase in soybean oil production. In recent years, China's oilseed planting areas and oilseeds production declined because of the high costs, low crushing profit and imperfect government management policy. The planting areas of soybean, rapeseed and cotton seed in 2012/2013 was 9.38%, which was 2.1% and 7.68% lower than a year ago respectively, and the domestic oilseeds production of soybean and rapeseed in 2012/213 was 10.64% which was 2.34% lower than a year ago.
Among all the oilseeds, rapeseed planting remained stable owing to the government policy of direct purchase. On the other hand, domestic soybean and cotton seed were squeezed by the imported soybean and sustaining the planting activities was more difficult. But it was reported in the beginning of 2014
that the government would implement a new purchase policy for domestic soybean and cotton seed, which attracted much attention. While production of oilseeds is stagnating, the
import volume of oilseed seems increased (Tables 1 to 3)
As Tables 4 and Table 5 illustrate, soybean oil import declined but soybean import increased in 2013. The decline in soybean oil could be attributed to two reasons. One was that the edible oil price was sharply reduced in 2013, and the purchasing price between the imported crude soybean oil and salad oil went on widening throughout the year, which reduced the traders' confidence and the trading amount of soybean oil. Another reason was Chinese Government's policy of reducing public expenditure on meals reduced the consumption and need for soybean oil.
Table 1: Planted Area of Oilseeds
(’000 Ha) 2011-2012 2012-2013
Soybean 7,780 7,050
Rapeseed 7,150 7,000
Groundnut 4,604 4,731
Cotton seed 5,037 4,650
Sunflower seed 960 950
Sesame seed 480 490
Linseed 322 350
Castor seed 180 100
Total 26,513 25,321
Source: Oil World
Table 2: Domestic Oilseed Production
(’000 MT) 2011-2012 2012-2013
Soybean 14,100 12,600
Rapeseed 12,800 12,500
Groundnut 11,280 11,813
Cottonseed 11,718 11,800
Sunflower seed 1,700 1,730
Sesame seed 587 600
Linseed 359 350
Castor seed 170 90
Total 52,713 51,483
Source: Oil World
Table 3: Domestic Oils & Fats Production
(’000 MT) 2009 2010 2011 2012 2013
Soybean oil 7,463 8,655 9,621 10,239 10,590
Rapeseed oil 5,305 5,380 5,178 5,452 5,603
Animal fat 4,305 4,462 4,541 4,670 4,755
Groundnut oil 1,904 2,034 2,015 2,029 1,955
Cotton oil 1,747 1,595 1,498 1,636 1,584
other 680 712 665 683 671
Sunflower oil 201 181 180 174 183
Total 21,605 23,019 23,698 24,883 25,341
Source: Oil World
Continued from page 1
MARKETInsightsIns gChina - Oils and FatsDevelopment in 2013
Continued on page 7
0
5,000
10,000
15,000
20,000
25,000
30,000
2009 2010 2011 2012 2013
1,00
0 M
T
Source: Oil World
Sunflower oil
Other
Cotton oil
Groundnut oil
Animal fat
Rapeseed oil
Soybean oil
Chart 3: Domestic Oils & Fats Production
MPOC FORTUNE • 7
0
2,000
4,000
6,000
8,000
10,000
12,000
1,00
0 M
T
Source: Oil World
Animal fat
Other
Sunflower oil
Lauric oil
Soybean oil
Rapeseed oil
Palm oil
2009 2010 2011 2012 2013
Chart 4: Imports of Oils & Fats in China
Continued from page 6
MARKETInsightsIns gChina - Oils and FatsDevelopment in 2013
As for the new high record of imported soybean, there were three reasons. First was that the domestic crushing capacity continued expanding, which led to the increase in demand for soybean crushing. Second was that the domestic soybean planting areas were less and less in recent years, which the domestic soybean production and supply also
stagnated, thus more imported soybean was need. Third was that the domestic demand for protein was increasing very fast. Soybean is the most suitable material to processing protein, thus this industry also stimulated the increasing demand for imported soybean.
The rapeseed import volume increased by 37.21% in 2013 than in 2012, which also hit the record after 2010. There were two reasons. One was that in 2013 rapeseed crushing capacity in South China continuously increased, where the main region of rapeseed crushing industry is. Another reason was that the
crushing profit of the imported rapeseed was much higher than that of domestic rapeseed, which stimulated the enthusiasm of crushing enterprises and the demand for imported rapeseed oil.
Over a period of time, there were three factors that impacted China's oil and oilseeds consumption. The first factor was the absolute demand growth for oils
and oilseed caused by the growing income and population. The second was the changing consumption structure between urban and rural caused by the growing urbanization, which directly contributed to the rapid growth of vegetable oil consumption since 2000. The last factor was the changing livestock industry structure, whose raised commercial proportion led to the rapid growing demand for protein meal.
In respect of domestic consumption, data from Oil World showed that edible and industrial consumption of three major oils and fats increased slightly, mainly due to the increased market supply and the financial pressure from the oil traders. The total port inventory in the end of 2013
Table 4: Imports of Oils & Fats in China
(’000 MT) 2009 2010 2011 2012 2013
Palm Oil 5,804 6,557 6,173 6,447 6,071
Rapeseed Oil 985 468 591 1,177 1,527
Soybean Oil 1,341 2,391 1,143 1,826 1,158
Lauric Oil 785 649 562 694 745
Sunflower Oil 137 153 72 107 416
Other 274 180 261 378 353
Animal Fat 424 412 365 299 249
Total 11,759 12,820 11,178 12,940 12,532
Source: Oil World
Table 5: Import of Oilseeds
(’000 MT) 2,009 2,010 2,011 2,012 2,013
Soybean 42546 54786 52,634 58,380 63,405
Rapeseed 3,284 1,600 1,262 2,820 3,663
Sesame Seed 311 391 389 396 442
Linseed 176 218 88 148 181
Groundnut 3 15 154 251 168
Cottonseed - 16 377 394 143
Castor Seed 20 11 13 15 19
Sunflower Seed 2 7 4 3 2
Total 46,342 57,044 54,921 62,407 68,023
Source: Oil World Continued on page 11
Table 6: Domestic Consumption of Oils & Fats
(’000 MT) 2012 2013
Soybean oil 11,670 11,810
Rapeseed oil 6,033 6,475
Palm oil 6,090 6,239
Lard 3,587 3,650
Groundnut oil 2,075 1,998
Cotton oil 1,630 1,592
Tallow & Grease 1,132 1,075
Palm kern oil 486 630
Sunflower oil 293 569
Castor oil 271 279
Corn oil 229 251
Sesame oil 217 217
Butter, as fat 181 184
Linseed oil 174 160
Coconut oil 208 138
Fish oil 48 72
Olive oil 46 40
Total 34,369 35,379
Source: Oil World
Contracts & ArbitrationW o r k s h o p
18th & 19th August 2014Monday & Tuesday
Jasmine Ballroom, One World HotelBandar Utama, Selangor Darul Ehsan
The Palm Oil Refiners Association of Malaysia
About the CourseThis 2 day workshop is designed to provide fundamental understanding of contracts, performance and enforcement of contracts and the practice of dispute resolution in the palm oil industry. The workshop will cover topics on:
• Understanding the Contract Terms & Clauses.• Charter Party• Contract Terms Related to Surveying• Common Disputes in the Sales & Carriage of
Palm Oil Trade• Trade Dispute Solving Mechanisms• PORAM Rules of Arbitration and Appeal• Case Studies
801C / 802A, Block B, Kelana Business Centre97, Jalan SS7/2, 47301 Kelana Jaya, Selangor
Tel: 03-7492 0006 Fax: 03-7492 0128E-mail: poram@poram.org.my
This workshop is beneficial for all oil/fats personnel who are directly or indirectly involved with contracts. This workshop is particularly tailored for traders, marketing executives, operations managers and executives, procurement officers, contract & legal department personnel and individuals wishing to familiarize themselves with the arbitration process and to receive training as arbitrators. Details of the workshop can be downloaded from www.poram.org.my.
MPOC FORTUNE • 9
MARKETInsightsIns g
have attributed distinctive ‘ILUC emission factors’ to biofuels, depending on whether they originate from: food crops, and, in such latter instance, whether they have been produced from cereals, and/or other starch-rich crops, sugar crops, or oil crops.
According to the amendment that had proposed, these ILUC emission factors would have been relevant for monitoring purposes only, but they would have most likely also been factored into the calculation of the overall ‘environmental impact’ of biofuels once the EU framework is revised (i.e., in 2020). Palm oil-based biofuel, which was attributed, together with other vegetable oils, the highest ILUC emission factor, stood to be particularly affected by this proposed framework. Such scheme has temporarily been put aside because of the new EU Parliament elections, but it is likely that a new proposal will be put forward in the months to come along the same lines.
Within such troubling regulatory context, EU biofuel producers have also taken initiatives of their own to drive palm oil-based (and other) biofuels out of the EU market. In particular, a number of trade defence proceedings have been triggered against imports of biofuels from a number of different countries, such as the United States, Argentina and Indonesia. These actions have recently led (inter alia) to the adoption of anti-dumping duties on imports of palm
oil-based biodiesel and soybean biodiesel into the EU, and pose an additional challenge for the sale of palm oil products into the EU. Argentina and Indonesia have already decided to take the EU to the WTO over these trade defence measures and the effects that they have on their exports to the EU.
What is most relevant, from the perspective of MPOC and the clear focus that it has placed so far on trade in palm oil to the EU as an ingredient to food, is that these legislative and regulatory initiatives and proposals inevitably reinforce the idea, which is growing in strength and conviction in the mind of the average EU consumer (and, therefore, of the average EU legislator and regulator), that all palm oil is environmentally unfriendly and unsustainable. If the EU regulator ‘says so’ and if EU regulatory schemes are set-up to discourage the use of palm oil as a biofuel for its poor environmental record, the private operators that are increasingly targeting palm oil with negative labels placed on food products will feel reassured that their environmental allegations and unsubstantiated generalizations are sound and would not be considered as deceptive and misleading vis-à-vis consumers. Therefore, the linkage with the food side of the trade equation is evident and a strong stand against the effects of these EU schemes, as applied to biofuel production, trade and utilization, should be taken by MPOC and
Malaysia. These EU criteria are arguably arbitrary, de facto if not de jure discriminatory and they harbour disturbing systemic implications for palm oil as a whole.
ConclusionsAs evidenced by the overview provided in the sections above, the issues and areas of concern to palm oil in the EU are many and keep changing in intensity, scope and consequences. MPOC has been engaging on a variety of fronts and with some initial successes and achievements. It is clear that challenges remain and palm oil’s competitors and detractors will continue to use all the legal (and, sadly, sometimes illegal) instruments in their possession to cast a bad image on palm oil and to gain competitive advantages.
There is no alternative, but to continue engaging at all levels (i.e., commercial, regulatory, legislative, administrative, judicial, scientific, marketing and educational) in order to address the misconceptions that are being fuelled, cooperate with regulators and legislators as they define schemes that stand to affect palm oil, challenge before the competent administrative or judicial authorities, when necessary, those operators that act illegally to mislead consumers about palm oil, and educate EU consumers and decision-makers about the realities and comparative advantages of palm oil vis-à-vis most vegetable oils and biofuel crops.
The Government of Malaysia must also continue assisting MPOC, as appropriate and in the relevant fora, with its diplomatic, political and negotiating instruments vis-à-vis the EU and selected EU Member States.
The size and the importance of the EU market, not only commercially, but also in light of the leading role that, together with the US, it plays at shaping international policies, is such that the idea of not taking action or of abandoning the fight in frustration from the slow pace of progress is simply not an option. The EU is a sophisticated and complex market. The competitors and detractors of palm oil are committing important resources to advance their causes. Clearly, the underlying commercial interests within the EU market and beyond are such that those investments are greatly exceeded by the economic returns. Kumar, MPOC Brussels
“Palm Oil and EU Market: Key Issues and Actions by MPOC”
Continued from page 5
MPOC FORTUNE • 11
0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
7,000,000
Other
CPO
RBD PST
RBD PL
2009 2010 2011 2012 2013Jan-Dec Jan-Dec Jan-Dec Jan-Dec Jan-Dec
Chart 5: Palm Products Imported in China (MT)
OtherIndonesiaMalaysia
0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
7,000,000
2009 2010 2011 2012 2013Jan-Dec Jan-Dec Jan-Dec Jan-Dec Jan-Dec
Chart 6: Malaysian and IndonesianPalm Oil Imported in China (MT)
Continued from page 7
MARKETInsightsIns gChina - Oils and FatsDevelopment in 2013
also increased the inventory growth rate even higher than that of annual consumption. The port inventory of palm oil in the end of 2013 was slightly lower than 2012, but still far higher than 2011. (Table 6)
Palm Oil MarketIn 2013, palm products imports reported slight downtrend as compared to 2012, mainly due to that China imported too much palm oil in December 2012. Late in 2012 Chinese government published a policy which at that time was considered would limit palm oil trades, thus Chinese traders imported higher volume to avoid the risk. As the policy was found to have minimum impact on palm oil trades in later months, palm oil import volume returned to normal in 2013.
Among all the palm products, the total import volume of crude palm oil (CPO) was much more than last year, as a result of huge import carried out in January and February due to the favorable CPO exported tax structure implemented by Malaysia. On the other hand, with RBD PL import declined significantly in December, its total import volume from January to December also declined from a year ago. In 2013, China purchased 3.5 million MT of palm oil from Malaysia, up by 2% or 68,684 MT over last year. Meanwhile, Indonesia shipped 2.43 million MT to China, lowered by 15.5% or 445,162 MT from last year. The decline import of Indonesian palm oil could be attributed to lower than expected production growth in the country, led to slowdown in export volume.
ConclusionAccording to the Chinese Government, China's GDP is likely to grow by 7.6% in 2014. The contribution from consumption, investment, imports and exports to the GDP is predicted to be 3.7%, 3.8% and 0.1% respectively. Oils and fats market in China is entering a new stage of stability with the rebounded macro-economy situation and growing demand. Year 2013 cannot be thought as a smooth year due to many negative news about the market and economy but these experience also forced the government to enhance the supervision of food safety, including the oils and fats
industry. Nevertheless, the market forces combined with business friendly government policies will help China's oils and fats market to strike a balance along the way. It is already reported that the soybean import business, which was nearly 5 million MT higher in 2013 compared to 2012, get cool down and this is reflected in the first quarter in 2014.
As for palm oil, while its business trend is impacted by many factors such as the price difference, the planting seasons, international supplies, the potential for
increase consumption remain intact. This could be attributed to the limited arable land to produce enough for local requirement, while does not want to solely rely on imported soybean to meet the supply-demand gap. The current average per capita oils & fats consumption is just at 25.5 kg, which remains far from what strong growing economy can achieve. Hence, it is foreseeable that palm oil demand will continue to grow in future. ■ MPOC Shanghai
Table 7: Palm Products Imported in China (MT)
2009 2010 2011 2012 2013
CPO 590,190 202,357 91,961 59,044 108,931
RBD PL 4,514,414 4,311,076 4,609,263 5,171,771 4,764,673
RBD PST 1,327,047 1,381,897 1,210,945 1,110,743 1,105,341
OTHER 9,940 3,473 347 421 749
Total 6,441,591 5,898,803 5,912,516 6,341,979 5,979,694
Source: General Administration of Customs, China
Table 8: Malaysian and Indonesian Palm Oil Imported in China (MT)
2009 2010 2011 2012 2013
Malaysia 3,923,823 3,433,783 3,780,091 3,430,954 3,499,638
Indonesia 2,505,599 2,245,164 2,119,214 2,872,800 2,427,638
Other 12,169 219,856 13,211 38,226 52,418
Total 6,441,591 5,898,803 5,912,516 6,341,980 5,979,694
Source: General Administration of Customs, China
MPOCOffices
WorldwideMalaysian Palm Oil Council (MPOC)2nd Floor Wisma Sawit Lot 6, SS 6, Jalan Perbandaran47301 Kelana Jaya, SelangorTel: 603-7806 4097Fax: 603-7806 2272www.mpoc.org.my
American Palm Oil Council 1010 Wisconsin Av, Suite 307Washington DC 20007Tel: +1 (202) 333 0661Fax: +1 (202) 333 0331www.americanpalmoil.comE-mail: haznita@mpoc.org.myContact: Haznita Hussin
MPOC Africa Regional Office5 Nollsworth Crescent, Nollsworth ParkLa Lucia Ridge Office Estate,La Lucia 4051, KwaZulu-Natal, South AfricaTel: +27 (31) 5666 171Fax: +27 (31) 5666 170E-mail: kazmi@mpoc.org.zaPostal Address:P.O.Box 1591M.E.C.C. 4301, South AfricaContact: Kamal Azmi
MPOC Bangladesh62-63 Motijheel Commercial Area,7th Floor, Amin Court Building,Dhaka, BangladeshTel: +88 (02) 9571 216Fax: +88 (02) 9551 836E-mail: fakhrul@mpoc.org.bdContact: Fakhrul Alam
MPOC ShanghaiShanghai Westgate Mall Co. Ltd.Room 1610B, 1038 Nanjing Rd. (w)Shanghai 200041, P. R. ChinaTel: +86 (21) 6218 2085 / 6218 2513Fax: +86 (21) 6218 1125E-mail: teah@mpoc.org.cnContact: Teah Yau Kun
MPOC Pakistan11 – 3rd Floor, Leeds CentreMain Boulevard Gulberg, 111 Lahore, PakistanTel: +92 (42) 3571 6600 / 3571 6601Fax: +92 (42) 3571 6602E-mail: faisal@mpoc.org.pkContact: Faisal Iqbal
MPOC India S-4, New Mahavir Building, Cumballa Hill Road Kemps Corner, Mumbai 400 036Tel: +91 (22) 6655 0755 / 6655 0756Fax: +91 (22) 6655 0757E-mail: bhavna@mpoc.org.inContact: Bhavna Shah
MPOC Europe Regional Office31 Avenue Emile Vendervelde1200 Brussels BelgiumTel: +32 (2) 7748 860Fax: +32 (2) 7794 371E-mail: kumar@mpoc.euContact: Uthaya Kumar
MPOC MoscowMoscow, 4th Dobrininskiy side-street,8 BC 'Dobrinya', 1st floor, Office R00-126Tel: +790 963 520 40Email: udovenko@mpoc.org.myContact: Aleksey Udovenko
MPOC Cairo3 Gamal E1-Din Afify Street, Nasir CityZone No.6, 11371 Cairo, EgyptTel: +20 (2) 2273 8108Fax +20 (2) 2273 8106E-mail: zainuddin@mpocegypt.comContact: Zainuddin Hassan
MPOC IstanbulGuzel Konutlar SitesiDilek Apartment Daire 3Balmumcu, Besiktas - Istanbul, TurkeyTel: +90 (212) 2668234Fax +90 (212) 2668236E-mail: msuhaili@mpoc.org.myContact: Muhamad Suhaili HambaliPublisher: Malaysian Palm Oil Council (MPOC)
2nd Floor Wisma Sawit, Lot 6, SS 6, Jalan Perbandaran, 47301 Kelana Jaya, Selangor
Printed by: Aktiara Corporation Sdn Bhd 1 & 3, Jalan TPP 1/3, Taman Industri Puchong Batu 12, 47160 Puchong, Selangor
COMPLETED
COMPLETED
COMPLETED
of the major oils to complement locally or regionally produced oils, including sunflower oil.
Although the demographic factors are favourable, other circumstances such as limited purchasing power, fluctuation in currencies and limited knowledge or negative perceptions about palm oil are crucial factors which need to be overcome. However, despite these challenges, MPOC will continue to carry out the right promotional efforts and disseminating the correct information about palm oil which will effectively play a vital role in generating awareness in the region about the good qualities of palm oil.
It is foreseen that palm oil trade will keep growing in view of insufficient production of edible oils among Southern Africa’s countries
and the growing acceptance of palm oil in these countries. With the existing up-to-date liquid terminal and bulking infrastructure, Port of Durban will continue to serve as the getaway and re-export market for palm oil trade to landlocked of Southern Africa countries. Although opportunities are available, there are constraints before the rising demands can be tapped. Among the constraints likely to be faced is the difficulty in shipping palm oil in bulk as most of the shipment is done on long term chartered vessels. Added to this is the lack of availability of shore tank facilities at port terminal which is low as most of the facilities have been contracted out in long term basis. Hence, new players may consider other options such as to ship the palm oil in flexi tank and consumer packed products.
Kamal Azmi Kamarudin, MPOC Durban
Port of Durban: Reachingout to Southern Africa Region
Continued from page 3
MARKETInsightsIns g
Table 3: Malaysia’s Exports to Southern Africa Region (MT)
Products 2013 2012 Change (Vol) Change (%)
Palm Oil 300,078 299,916 162 -
Palm Kernel 22,233 20,681 1,552 7.5
Oleochemical 41,174 29,766 11,408 38.3
Finished Products 7,092 10,007 -2,915 -29
Total 370,577 360,070 10,507 2.9
Source: MPOB
top related