malaysian palm oil: our role in the global oils & fats market 2015... · with the principles...

Copyright by Malaysian Palm Oil Council 2015

Malaysian Palm Oil:

Our Role in The Global Oils & Fats Market

Dr. Kalyana Sundram

Deputy Chief Executive Officer

M alaysian Palm Oil Council


Oils and Fats Production (1990 – 2014)

1990 Production : 80.89 million MT

2014 Production : 199.75 million MTSource: Oil World

0,00%

Rapeseed oil

10,09% Soybean oil

19,90%

Palm oil13,62%

Sunflower oil

9,73%

Others46,67%

Rapeseed Oil

13.61% SoyabeanOil

22.56%

Palm oil29.63%

Sunflower Oil

8.17%

Others26.04%

2014 Exports :78.58 million MT, with palm as major export


Global Consumption of Major Oils and FatsCONSUMPTION – PALM OIL VS OTHER OILS in 2014

Soybean oil

22,45%

Sunflower oil

7,37%

Palm oil

30,00%

Rapeseed oil

12,69%

Others

27,50%


Palm Oil Supply from Malaysia and Indonesia (‘000 MT)

Source : Oil World

2011(MT)

2012(MT)

2013(MT)

2014(MT)

Change 2014/

2013 (MT)

Change 2014/2013 (%)

Production

(Malaysia)18,912 18,785 19,216 19,500 284 1.48

Production

(Indonesia)24,300 26,900 28,300 30,100 1,800 6.36

Total 43,212 45,685 47,516 49,600 2,084 4.39


NET IMPORTING & EXPORTING COUNTRIES

FOR OILS AND FATS (2014)

Russia

Philippines

Canada

Ukraine

Brazil

Argentina

Malaysia

Indonesia

Taiwan

Nigeria

South Korea

South Africa

Turkey

Japan

Egypt

Mexico

Iran

Bangladesh

Pakistan

North Africa

India

EU-27

China

-15000 -10000 -5000 0 5000 10000 15000 20000 25000

Net Importers

Net Exporters

FAO estimates that by 2050, rising population and incomes

will require 70 percent increase in global food production

› Net exporters of oils and fats – Asia Pacific (palm oil) & Americas (soybean)

› The rest of the countries are net importers

Source : Oil World


Source : FAOSTATS

WORLD ARABLE & PERMANENT CROP LAND

PER CAPITA

Per capita crop land has declined since 1960 thus more pressure on farms to increase yields


DISTRIBUTION OF AGRICULTURAL AREA

Livestock , 71.27%

Other Crops, 23.17%Oilseeds, 5.25%

Oil Palm, 0.31%

Total Agricultural Area : 5 Billion HectaresSource : FAOSTATS


HIGH LAND PRODUCTIVITY OF OIL PALM YIELD – PALM OIL VS OTHER OILSEEDS

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

Soybean Oil Sunflower Oil

Rapeseed Oil

Palm Oil

0.36 0.420.59

Seed Oil

Palm Oil

Productivity of oil palm is:

• 11x more thansoyabean

• 10x more than sunflower

• 7x more than rapeseed

3.68

(Kernel Oil)

Source: * FAO ** Oil World *** MPOB

0

2

4

6

8

10

12

PresentHigh commercial

yield Best expt plotMax Biol. Yield 12

MEETING FUTURE PALM OIL DEMAND IS

DEPENDENT ON YIELD IMPROVEMENTS

Bad Karma reduces palm oil yieldsNature Reviews Genetics 16, 624-625 (2015) doi:10.1038/nrg4022

Oil palm genome sequence reveals divergence of interfertilespecies in Old and New worldsNature 500, 335–339 (2013) doi:10.1038/nature12309

* Both Nature publications from Malaysian Palm Oil Board (MPOB)


Source 2015 2030

Food 147.2 160.7

Biofuels 57 102

TOTAL 204.2 262.7

PROJECTED GLOBAL BIOFUEL REQUIREMENTS (MT) AND

PRODUCTION BY COUNTRIES

Source: Legge


Malaysia, ASSURING FUTURE

SUSTAINABLE SUPPLY OF PALM OIL

Consumer demand for palm oil in

Europe now requires it is sourced from

a sustainable source

The EU demand for CSPO will be fully

met as there is ample supply of CSPO

“Customers are always right” to this

end Malaysia will meet and supply

what the customers want

Apart from RSPO there are other

ongoing sustainable certification

schemes including ISCC, MSPO, ISPO

etc.


Year

Matured Land

Area

('000 Ha)

Production

('000 MT)

Efficiency

Ratio

1985 1,480 4,133 1: 2.79

1990 2,030 6,095 1: 3.00

2000 3,370 10,840 1: 3.22

2005 4,050 14,961 1: 3.69

2014 4,689 19,667 1: 4.20

MALAYSIAN PALM OIL PRODUCTION

EFFICIENT USE OF LAND

Source : MPOB


MALAYSIAN SUSTAINABLE PALM OIL (MSPO)

The Malaysian Sustainable Palm Oil (MSPO) standard is beingtested by the industry before its implementation by the end of thisyear

MSPO was developed to address the grouses of mid-range andsmallholder oil palm cultivators who face difficulty complyingwith the principles and standards of the Roundtable onSustainable Palm Oil (RSPO) certification due to exorbitantcharges, conflicting views of inspectors and changing criteria

A pilot run for seven palm oil mills and seven estates have beencompleted.

20% of the local palm oil industry adheres to the voluntary RSPOcertification


Rising demand for Malaysian palm oil due to health and sustainability

According to a Credit Suisse financial analysis, this versatile oil is expected to become much more prevalent in the coming years. Demand for Malaysian palm oil to increase by 2030 in line with the Credit Suisse projections. The worldwide interest in healthy, natural fats and the global recognition of Malaysia’s sustainable palm oil industry are part of the reasons for this potential increase in its usage.

Globally, fats to grow from current 26% calories to

31% by 2030.

SAFA % en. to increase from 9.4% to 13%.

Per capita fat consumption will grow 1.3% over

the next 15 years

•Among foods, winners are eggs, milk, dairy

products and nuts with annual growth of 2.5-4%.

•Meat consumption to grow at 1.4% and fish at 1.6%

So where will be the source for such

sustainable production come from?

Will you apply ILUC concepts?

Monounsaturates and Magic of Olive Oil!

•"Difficult to define "Mediterranean diet“

•"Monos are neutral from health perspective

and little to support that nuts and olive oil help

reduce CVD associated mortality"

http://publications.credit-suisse.com/tasks/render/file/index.cfm?fileid=9163B920-CAEF-91FB-EE5769786A03D76E


Malaysia, Indonesia To Establish Council Of Palm Oil Producing Countries (CPOPC)

Quote from Hon. Minister of Plantation Industries & Commodities, Malaysia,

Datuk Amar Douglas Uggah Embas

• Jointly promote the benefits of the oil palm industry while ensuring price stability along with downstream industry developments

• Indonesia and Malaysia to harmonise Indonesian Sustainable Palm Oil (ISPO) and Malaysian Sustainable Palm Oil (MSPO) standards

• Socio-economic development of smallholders will be championed

• Promote environmentally sustainable practices in the oil palm industry

• Improve cooperation in R&D to unlock potential across the value chain.

• Both countries will facilitate private sector initiatives in developing the Green Economic Zone in Indonesia, while promoting value addition to the palm oil industry


CONSERVATION EFFORTS: MALAYSIAN

PALM OIL INDUSTRY

Malaysian Palm Oil Wildlife

Conservation Fund (MPOWCF)

Launched in 2006

Euro 5 Million; direct PO industry

contribution was Euro 2.5 Million.

Euro 10 Million as grant from

Malaysian government

MPOWCF welcomes donations &

grants

Matches third party funding on a 1:1

basis


Sustainability is not an issue that cannot be managed by Malaysian palm oil.

Western environmental NGOs need to pool their resources with producers

to achieve realistic objectives

Palm Oil will continue to assist the developing countries promote poverty

eradication, improve income for small holders and uplift the economy of

developing nations

Palm oil production is fully gearing itself to meet sustainability certification

demands and adopts the 3Ps of sustainability – People, Planet and Profit.

CONCLUSIONS

malaysian palm oil: our role in the global oils & fats market 2015... · with the principles...

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