palm oil - review and outlook fcr bank lending summary … · draft jnusbaumer:lcj may 1, 1973 palm...
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DRAFT JNusbaumer:lcj May 1, 1973
PALM OIL - REVIEW AND OUTLOOK FCR BANK LENDING
SUMMARY AND CONCLUSIONS
1. Palm oil accounts for a relatively small share of the total foreign
exchange earnings for the major producing countries in Southeast Asia and
West Africa. Its share in the value of total exports of Malaysia in 1967-
1969 was 3.0 percent, for Indonesia it was 2.5 percent and for west African
exporters as follows: Dahomey 9.5 percent, Zaire 6.5 percent and Nigeria
0.2 percent. In absolute terms, exports from the principal countries in
1967-1969 averaged $43 million for Malaysia, $19 million for Indonesia,
$22 million for Zaire and $2 million each for Dahomey and Nigeria. However,
palm oil production is important for the economies of these countries both
from the point of view of diversification of their exports and to meet in-
creased domestic requirements.
2. The world supply of palm oil is expected to increase rapidly in
:.::e ;oe:::_ac. '-O 1980, matching the 12 percent average per annUl'll increase re-
corded since 1967-1969. This projection mainly reflects the expected out-
come of intensive development programs implemented in Malaysia since the
middle 1960's, which comprised extensive plantings and considerable improve-
ments in yields. New plantings under high-yielding varieties covered 290
thousand ha. of land between 1961-71, and Malaysia plans to bring another 140
thousand ha. under oil palm in 1972-76. A smaller but yet significant increase
in output is expected in Indonesia, where new plantations amounted to 25 thousand
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ha. in 1961-71, and in addition there are plans for extension to another 25
thousand ha. during 1972-76, with an equally important contribution to addi
tional output from repantings and other forms of rejuvenation of old stands.
In West Africa, the Ivory Coast and Nigeria could also achieve considerable
progress in output, both in the subsistence and commercial sectors, by rehabil
itating smallholdings and planting new areas. The prospect of rapidly increasing
supplies of palm oil on the world market raises the question of the likely market
conditions which they will encounter and of the possitle consequences for the
p~~:e o: palm oil.
3. The outlook for palm oil in the decade to 1980 must be viewed in
the context of world demand for and supply of all fats and oils and, partic
ularly, of vegetable oils, in view of the high degree of substitution which
exists between different fats and oils in their end uses. World demand for
fats and oils in general is expected to grow rapidly enough to absorb the
prospective increase in output of these commodities in the decade ahead with
out any persistent downward pressure on their market prices. Demand for all
vegetable oils will grow faster than for other fats and oils, but as a result
-~ ~e:·A~~ :onstraints affecting the supply of competing oils, a la~ger sba~e
of this demand than in the past will be met by palm oil and soybean oil. In
the case of soybean oil, increasing supplies will result partly from the fact
that soybean oil is a by-product of soybean crushings for meal, so that, con
trary to what could be expected for an annual crop, the supply of soybean in
the form of oil cannot be readily adjusted to the demand for oil. Some down
ward pressure on the prices of both palm oil and soybean oil may be needed to
facilitate their substitution for other vegetable oils, but given the overall
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supply/demand situation of the latter this pressure is expected to be moderate.
4. In the case of palm oil the demand is expected to be strong enough
to absorb rapidly increasing supplies without the need for a sharp downward
adjustment of prices. Due to the gradual shift of consump"c.ion in the devel
oped countries towards products based on vegetable oils, including palm oil,
the foreign demand context appears a priori favorable. Palm oil consumption
is also projected to increase in developing countries due to rising incomes
and high income elasticities of demand for vegetable oils in these countries.
In addition, a number of factors make palm oil particularly suitable to meet
the growing consumer requirements in different end-uses. Though palm oil and
soybean oil supplies will both increase rapidly relative to supplies of other
competing vegetable oils, the market outlook for these two oils is fairly
similar and their relative prices are not expected to change markedly in the
decade ahead. Under these conditions, the projected price of palm oil will
continue to be high enough to warrant further investment in production, given
the high rates of return on palm oil projects. However, new investments in oil
palm plantings would generate additional output mainly after 1980.
5. The geographic distribution of world demand and the product composi-
tion of supply of vegetable oils after 1980 are likely to be less favorable
to exports of palm oil and more to production for domestic use. As a result,
there is a case for shifting the locus of future investment in palm oil ~
duction to areas where the potential growth of internal demand is greatest,
provided they have a comparative advantage in production. This shift of
emphasis would be in conformity with the policy of encouraging the diversifica
tion of output in the major palm oil exporting countries of Southeast Asia,
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while catering to the need for impro~ement in the productivity of palm oil
plantations in some other producing countries. The main area to be taken
into consideration in this respect is West Africa where, though the yields
and hence the rates of return on oil palm investments are lower than in
Southeast Asia, they are still high by comparison with production alter
natives in the countries concerned. The particular conditions of production
of palm oil in West Africa call for directing new investments primarily
towards rehabilitation of existing plantings and processing. This assess
ment is, of course, based on the present outlook for demand and supply of
vegetable oils. It should be pointed out, however, that the situation of
the vegetable oils market is changing rapidly and this calls for the neces
sity to keep the supply/demand outlook for palm oil under review.
I. INTRODUCTION
1. The world supply of palm oil increased very rapidly in recent years
following a long period of slow growth (Table 1). From 1950-1952 to
1967-1969 world production rose at an annual average rate of 1.2 percent,
while from 1967-1969 to 1971 the annual growth rate has averaged more than
12 percent. In the earlier period, output stagnated and in parts of the
period decreased in the main African producing countries and in Indonesia
and this was only partly compensated by rising output in Malaysia and in the
smaller producing countries in Africa and Latin America. In the period after
1967-1969 output rose in all the producing areas. The planting programmes
started in west Malaysia (the main producer) in the early 1960's were accel
erated in the second part of the decade and results began to show from the
mid-sixties onwards. Increased yields were obtained in Indonesia with the
operation of large-scale rehabilitation programmes, while extensive plantings
in the smaller African producing countries and the end of civil disorders in
Nigeria and Zaire led to a recovery of production in the African region.
2. World exports of palm oil also practically stagnated throughout the
1950's and early 196o's and began to increase at a 15 percent average annual
rate after 1967-1969 (Table 2). B,y 1972 the share of palm oil in
exports of all fats and oils had nearly reached the level at which it stood
in the early 19S0 1 s. However, of the major producing countries only Malaysia
and Indonesia recorded rising exports in the 1967-1972 period. In the main
countries of Africa most of the increase in output was absorbed domestically.
This was especially true of Nigeria, which became a marginal exporter after
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1967, whereas it previously accounted for a major share of African exports
of palm oil.
3. As will be shown below, world output of palm oil is expected to
continue to increase rapidly in the coming decade as a result of new plantings
coming to maturity, improved yields and the coming into operation of Bank pro
jects presently being implemented. Oil palm projects financed by the Bank
Group will contribute an estimated 14 percent of the total increment in out
put from 1970 to 1980 (Table 3). WOrld exports of palm oil are expected to
grow faster than output. Although the rate of domestic absorption of out
put will decrease in the producing developing countries as a group, largely
due to the slow rise of consumption relative to output in Malaysia and
Indonesia, consumption is expected to grow more rapidly in the 1970's than
in the 1960•s both in the developed and in the developing countries (Table
7).
4. The projections to 1980 presented in Section III indicate that
palm oil will represent a larger share of the total output of all fats and
oils than at present, and that the increase in the share of soybean oil will
be even larger. The relevance of output prospects for soybean oil and for
other vegetable oils to the future price of palm oil derives from the high
degree of substitutability of these commodities in consumption. Only insofar
as palm oil is specific to certain end-uses can the demand for the oil be
directly derived from the demand for the final productsin which it is incor
porated. In fact, however, most of the products made from palm oil can also
be (and are currently) manufactured from other vegetable oils and though the
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interchangeability of these inputs is far from absolute, it does mean that
the relative prices of different vegetable oils are very largely influenced
by the relative abundance of supplies. In addition, substitution for palm
oil in consumption extends to a number of animal fats and oils, so that changes
in demand for fats and oils in general affects a wide spectrum of commodities
of which palm oil is only one. The problem at hand is therefore to determine
what influence the future world demand for oils and fats is likely to exert
on the prices of these commodities as a group, given total projected supply,
and in this context to find out how the growth of supply of palm oil compared
with competing commodities is going to affect its price. This is the object
of Section II, which deals with demand and supply prospects for all fats and
oils, and Section III, which deals with the outlook for palm oil in particular.
5. The growth of demand for all fats and oils in the period to 1980 is
expected to be sufficient to absorb the increased marketed quantities of these
commodities without the need for severe price adjustments and the projected
faster growth of output of palm oil relative to other fats and oils will
probably not result in excessive pressure on the future price of palm oil
relative to other fats and oils. However, some downward pressure on real
palm oil prices may be expected and this raises the issue, discussed below
in Section I~ of the contribution which Bank lending can make to the economies
of developing countries in terms of economic growth and the balance of payments
by supporting plans for further expansion of output of palm oil in these
countries.
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II. FATS AND OILS - PAST TRENDS AND FUTURE PROSPECTS OF DEMAND AND SUPPLY
6. Total estimated consumption of fats and oils expanded steadily at
a trend rate of 2.9 percent from 1960 to 1970 (Table 4), but both the geo-
graphic and the product composition of demand changed during this period.
While total consumption in the developed and the developing groups of coun-
tries rose at the same trend rate of 3.2 percent, in centrally planned econ-
omies the trend rate of growth was only 1.8 percent. ,.,,ithin the developed
group, which in 1970 accounted for one-half of total world consumption and
which is the main export market for fats and oils produced in the LDC 1 s, the
most rapid increase in demand was recorded in Oceania, Japan and South Africa
combined (7. 0 per cent per annum), followed by Western Europe (3. 0 per cent per
annum) and the United States and Canada (2.6~ cent per annum). Among the
developing regions, Latin America recorded the greatest trend rate of growth
in consumption (4.3 percent) followed by Africa and Asia.
7. The product composition of demand also changed fairly rapidly during
the past decade or so. Consumption of animal fats and marine oils rose much more
s::nrly ":.!:an consumption of vegetable oils.!/ Within the vegetable oi1s grcq:-
1/ Data on world consumption by types of fats and oils is not readily available. In a recent USDA study, ''World Supply and Demand Prospects for Oilseeds and Oilseed Products in 1980 11 , Report No. 71, USDA, Washington, March 1971, total availability of animal fats and marine oils is shown to have increased by 1.9 per cent per annum from 1955-57 to 1963-65, against 3.7 per cent per annum for total availability of vegetable oils (oil equivalent basis).
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the composition of demand also changed in response to availabilities of the
different oils (see below) and to a number of economic and non-
economic factors affecting the use of the oils.
8. Though most fats and oils are highly substitutable in consumption,
the substitutability is low between industrial fats and oils as a group and
edible fats and oils. MOst of the oils in the latter group also have indus-
trial uses, mainly in the manufacture of soap, but the rise in consumption
c!' th€se oils mainly renected growing demand for them in hUll\8.ll cons'll.!!lpt.ion.
in fact as substitutes for animal fats.
Higher human consumption of vegetable oils in the form of margarine, short-
ening and other cooking oils as against animal fats reflect the growing con-
cern of consumers in developed countries with excessive cholesterol intake,
which is believed to be partly responsible for coronary heart diseases. This
concern has been particularly prominent in North America over the last decade in
and as a result consumption per head of vegetable oils /margarine and short-
ening has risen rapidly while consumption of butter fell (Table 5). The data
for the other major developed consuming area, i.e. the enlarged EC, show a slower
rise in the consumption per head of butter than of vegetable oils, though
margarine consumption per head fell on average from 1960 to 1968. In the EC
countries the evidence of a change in consumer preferences is thus less marked
and the replacement of butter by vegetable oil substitutes may be linked more
to the maintenance of artificially high support prices for the dairy product,
particularly in the countries constituting the old EEC.
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9. The shift of demand away from animal fats and oils and to vegetable
oils opens opportunities for virtually any of these oils in view of the high
degree of substitution between them, although for each individual oil the
relative rate of growth of supplies will influence the price of each oil
relative to its competitors.
10. According to Bank staff projections, world demand for all fats and oils
at 1972 prices will rise to 56 million tons in 1980. This is 31.5 percent
more than in 1970 (42.6 million tons) and represents a somewhat slower rate
of increase than in the preceding decade (33.1 percent). If the increase in
the share of vegetable oils in total demand for fats and oils for food uses
implied by recent FAO projections11is applied to the above figure, world
consumption of vegetable oils in 1980 would amount to about 39 million tons
(69.5 per cent of the total), an increase of 41 percent over 1970. In this
paper it has been assumed that the factors which have stimulated a more rapid
growth of consumption of vegetable oils than of other fats and oils in the
last decade will continue to operate in the period to 1980, namely: a con-
tinuing shift in consumer preferences away from animal fats and oils (and
from en-products based on these commodities), a growing demand for vegetable
~~:~~es and meal for livestock feeding, and a possible return to vegetable-
oil based manufacture of soaps and detergents in response to a slower growth
in demand for synthetic substitutes. The impact of these factors is likely
to be felt more in developed than in developing countries. However, future
Cf. FAO, "Agricultural Commodity Projections, 1970-1980 11 , Rome 1971. The FAO projects a total~rease in consumption of fats and oils to 53.6 million by 1980, and an increase in the Share of vegetable oils in demand for food uses from 66.6 percent in 1970 to 69.5 percent in 1980, using FAO's 11high11
projection which assumes the growth of income in developing countries will be in line with the targets of the UN Second Development Decade.
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demand for vegetable oils in developing countries is also expected to increase
considerably faster in the period to 1980 than in the previous decade, reflecting
the rise in incomes in these countries and the fact that the income elasticity
of demand for the oils tends to be relatively high at low income levels. The
assumed rate of increase of demand in developing countries is about 45 percent
from 1970 to 1980 against 38 percent from 1960 to 1970. On the assumption that
the rate of increase of consumption in Socialist countries will remain at
around 20 percent as in 1960-1970, total consumption of fats and oils in devel
oping and Socialist countries combined would reach 29 million tons in 1980.
Table 6 presents the estimated 1980 consumption for major consuming areas
and compares them with actual consumption in 1971.
11. The changing distribution of world demand between different fats
and oils as a result of shifts in consumer preferences over the last decade
or so has been reinforced by the supply availabilities of the different
commodities. Wbrld production of animal fats and oils has increased slowly
compared to vegetable oils (Table 7 and Chart I). The production of butter
has on the whole remained almost stagnant, though there were increases in
particular areas like the EC under the stimulus of high support prices which
merely led to stock accumulation and the need to subsidize consumption. The
growth of lard has also been very slow partly as a result of production prac
tices characterized by the emphasis on high-protein meal in feeding, which
has led to a decline in fat per animal. The output of marine products increased
rapidly in recent years, but these are mainly consumed as animal feeds. As to
the future, the rise in production of output of marine products and animal
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1/ fats and oils is expected to be slow in the decade to 1980.- For butter,
lard and marine oils combined, production is expected togrow at the rate of
1.9 percent per year.S/ Consequently, these products are not likely to exert
considerable pressure on the prices of vegetable oils with which they compete.
On the basis of past production trends, world supply of all fats and oils
combined in 1980 is expected to be roughly in balance with world demand at
the level of 56 million tons oil or fat equivalent. This in turn implies
that increased supplied of fats and oils will be absorbed in the market with-
o~t any peTsiatent downward pressure on the prices of these commodities as a
group.
12. Within the vegetable oil group the growth of production has been
comparatively slow except for sunflowerseed oil, rapeseed oil, soybean oil
and palm oil (Table 7). WOrld output of groundnuts increased at a diminishing
rate in the last decade, particularly after 1967, when the expansion in the
United States and in some smaller producing countries was offset by declines
in the major producing countries of west Africa. WOrld exports of groundnut
oil have been stagnant since 1955, except for an increase in the triennium
1966-68. Production is not expected to rise again at rates comparable to those
~ ~~e :95G's in the coming decade. World coconut production reaained stagnan~
from the middle of the 1950's to 1970, and the improvement noted in the last
two years, which was attributable to favorable weather conditions, is expected
to be short-lived. The development and use of high-yield hybrid varieties could
1/ Significant increases in the availability and catch of fish in the coming years are discounted by moat fishery experts.
gj Cf. USDA, op. cit. p. 98, where a summary of projections made by FAO and OECD is presented.
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increase production but the effect will not be felt until after 1980. The
production of cottonseed oil has grown slowly mthe past decade at the rate
of less than 1 percent a year. Though a rise in supply occurred in 1972 and
is expected to continue into 1973 due to favorable weather conditions and to
the diversion of cottonseed from direct feeding to oil extraction in some
countries, the long-term expected growth, which is linked to the growth of
output of cotton, is not expected to exceed 1.7 percent per annum. Sunflower
seed is produced mainly in centrally planned economies and the rate of growth
of output has tended to fall in the last decade. The reverse tendency was
shown by output of rapeseed, which originates mainly in Eastern Europe,
centrally planned economies in Asia, Southeast Asia and western Europe.
These recent trends in output are expected to continue in the period to 1980.
13. In contrast, the output of both palm oil and soybean oil, which has
grown rapidly in the 1960's is expected to follow a strong upward trend in
the coming decade. As will be shown in Section III, most of the important
producing countries planted large areas to oil palm in 1960's and have cur
rently on hand plans, supported in most cases by the necessary financial
arrangements, to plant more areas in the next few years, in addition to
carrying out other forms of rehabilitation of the oil palm industry. WOrld
soybean output has risen from 26.5 million tons in 1956-60 to 43 million tons
in 1966-70, a rise of 65 percent. The largest quantity increase was recorded
in the United States where production doubled, rising from 14.2 million tons
in 1956-60 to 28.7 million tons in 1966-70. Brazil's output of soybean rose
fastest in percentage terms during the same period (+521 percent), but this
country's total output in 1966-70 was still less than a million tons.
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The United States' soybean output is scheduled to rise to about 48 million 1/
tons- in 1980 and it is also expected that Brazilian output will continue
to increase sharply, reaching around 10 million tons in 1980. These produc-
tion increases are mainly in response to demand for animal feeds both in the
producing countries and in overseas markets, but they also result in a large
output of soybean oil as a by-product of bean crushing for cake manufacture.
The production of soybeans in China has remained at about the same level of
9 to 10 million tons throughout the last two decades and the expectation is that
future changes in output will be tailored to domestic needs:if this is so,
China will not become a net exporter or an irnpor tant net importer of soybeans
or soybean cake and oil in the next decade. Total world output including
that of China is forecast to reach roughly 70 to 75 million tons of soybeans
by 1980, or 11 millions tons oil equivalent.
14. As a result of these developments, it is clear that the greater part
of the increase in world demand for vegetable oils in the next decade will be
met by increased supplies of palm oil and soybean oil. The present (1971) and
projected shares of the different oils in world output of fats and oils in
1980 are shown in Table 8. To a large extent, therefore, the outlook for
palm oil prices on the world market depends on the relative demand/supply
situation for these two oils.
Cf. George W. Kromer, "An Economic View of Soybeans and Food Fats in the 1980 1 s", Speech delivered before the Institute of Shortening and Edible Oils, Inc., Scottsdale, Arizona, March 16, 1973. Figures given in bushels were converted into metric tons at the rate of 36.7 bushels = 1 metric ton.
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III. PALM OIL: PAST TRENDS AND FUTURE FROSPECTS OF DEMAND AND SUPPLY
15. As in the case of the other vegetable oils, there was a rapid
expansion of the demand for palm oil in the major consuming countries in
recent years. This was particularly noteworthy in the United States where
total consumption rose sixfold in the last five years after stagnating at
a very low level during the preceding two decades. In the other major
developed countries consumption of palm oil increased less rapidly on the
whole, though there was also a marked upswing in demand in the three main
consuming countries: the United Kingdom, Germany and the Netherlands. The
rise in demand for palm oil reflected both the general trend towards greater
proportional use of vegetable oils in consumer products and the fall in the
price of palm oil relative to competing vegetable oils.
16. Developments in the United States are symptomatic of the change
which has occurred in the end-use of palm oil. Until about the middle of the
1960's consumption of palm oil in the United States was mostly in non-food
uses and never exceeded 23 thousand metric tons a year. Since the mid-sixties,
however, the use of palm oil in shortening manufacture increased sharply, from
about 6 thousand tons in 1965 to 64 thousand tons in 1971 and an estimated 98 thousand
tonsin 1972. Non-food uses include the manufacture of soap and certain types
of lubricants. The main factor which has prevented a rapid growth of palm
oil in non-food uses in the past two decades has been the dynamic rise in
sales of syntehtic detergents and the concomitant fall in consumption of soap
in its traditional forms. This has occurred in all developed countries though
the switch to synthetic detergents probably took place earlier in the United
States.
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17. The price of palm oil relative to a weighted average of the prices
of competing vegetable oils has fallen markedly since 1967, after increasing
fairly steadily during the preceding ten years (Table 9, column 1). Given
price elasticities of demand close to 1 or higher in the main export markets
for the oil, the recent price behavior appears to be responsible for a large
part of the rapid rise in consumption in recent years.1/
18. Estimates of the future effective demand for palm oil are necessarily
based on assumptions concerning the demand for fats and oils and for vegetable
oils in general as well as the demand for palm oil in particular in its different
end-uses. As stated above, world demand for fats and oils is projected to con-
tinue growing steadily in the decade to 1980 and the gradual shift of consump-
tion in the developed countries away from animal fats and oils and towards
vegetable oils is also expected to endure. The foreign demand context thus
appears a priori favorable to palm oil. To this should be added the general
expectation of rising incomes in developing countries which would en-
tail a proportionally greater rise in demand for vegetable oils in view of the
high income elasticities involved.~ On the basis of these expected develop-
ments, projections of consumption of palm oil in 1980 have been calculated by
the Bank staff for the four major consuming areas, namely developed countries
as a group, socialist countries, non-producing developing countries and pro-
ducing countries (all LDC's) /Table 1Q7. Estimates of subsistence production
!I Roughly speaking, the price elasticity is higher than 1 in the United States, Canada and the United Kingdom, around 1 in Japan, Italy and the Netherlands and below one in other importing countries.
V Both the FAO in "Agriculture Commodity Projections, 1970-1980 11 , Rome 1971, and the USDA, op. cit., project a rapid growth of demand for vegetable oils in the LDC' s on grounds of income elasticity. Under one set of USDA projections the demand/output ratio for all LDC 1 s combined is expected to rise to about 92 percent compared with 75.7 percent in 1963-65.
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(which is equivalent to subsistence consumption by definition) have also been
made but in view of the uncertainties involved in this type of projection,
the corresponding 1980 figures are given separately in brackets. The table
shows that total demand for palm oil would reach 4,130 thousand tons in
1980 compared with 2,078 thousand tons in 1971 if the current 1980 price
stood at the same level as in 1972, i.e. $212 per ton, which assumes a 17
percent fall in the 11real 11 price of palm oil during the present decade!/ (see
below). At a current 1980 price of $200 per ton (see paragraph 26 below)
projected 1980 consumption of palm oil works out at 4,280 thousand tons. Of
this total, a little more than one half will take place in developed countries,
against 42 percent in 1971 and 35 percent in 1967. Total exports of palm oil,
at 2,660 thousand tons, will account for 62 percent of total output and 71 per-
cent of total commercial (i.e. non-subsistence) output, compared with 46 per-
cent and 81 percent respectively in 1971, 49 percent and 91 percent in 1967-69.
Malaysia will be the dominant exporter and Indonesia will take second place;
Zaire will be the only impor~ exporter in west Africa, although the Ivory Coast,
Nigeria and Dahomey will expand their markets further (Table 11). The share of
LDC's in total consumption will fall from 58 percent in 1971 to 46 percent in
1980, but the share of intra-LDC trade in total exports will increase from 9
to 14 percent.
19. In projecting the demand for palm oil in the context of expected
demand for vegetable oils as a group, account has been taken of the particular
factors which make the commodity suitable to meet the growing consumer require-
ments and would thus tend to facilitate the absorption of rapidly increasing
supplies. Palm oil possesses a triglyceride structure and as such it requires
less hydrogenation than other vegatable oils for the manufacture of margarine,
!( This calculation is based on the assumption of a 2 percent average annual rate of inflation in the prices of goods.
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shortening and other cooking fats. The price differential between hardened
and un-hardened oil, which reflects the cost of hardening, is lower by $7-10
per metric ton for palm oil than for other commonly used vegetable oils: this
is a considerable cost saving for the margarine and shortening industries.
Palm oil is also rich in vitamin A and its use in these two industries saves
the cost of adding synthetic vitamins. Further, "Palm oil has good non-foam-
ing properties and good oxidative stability. Both these properties result in
an oil which is highly suitable for use in commercial deep frying.'J/
20. Public sentiment against water pollution caused by the use of phos-
phates in detergents has been growing in developed countries, notably the
United States, where several states have passed laws prohibiting the use of
phosphates in washing materials in excess of certain prescribed percentages.
A change in consumer preference from phosphate detergents to fat-based soap
compounds will, if it is not reversed, increase the demand for palm oil, which
in the past was largely used in soap manufacture and whose good lathering
properties make it a suitable material for use in products competing with syn-
thetic detergents.
2:. Significant improvements in the quality of palm oil have taken pla~e
in recent years and are expected to continue in the future. The proportion
of free fatty acids, which is an important quality characteristic, has been
substantially reduced, and oil with 3 percent or less free fatty acid content
is now commonly available. Special quality oil with 1-2 percent free fatty
acid content can also be produced for a small price premium. As these and
Technical Bulletin No. 1 of Palm Oil Producers Association, Kuala Lumpur, 1973.
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other quality improvements become more widespread, the acceptability of palm
oil in different uses is likely to be greatly enhanced.
22. The rapid increase in the supply of palm oil since the middle 1960's
was overwhelmingly determined by the intensive development programmes implemented
in Malaysia, which comprised extensive plantings and considerable improvements
in yields. This country accounted for only 7 percent of world output of palm
oil in 1959-61 but its share rose to 13.8 percent in 1965-67 and 24 percent
in 1969-71. Of the total increase in world output of 788 thousand tons between
1960 and 1971, 496 thousand tons, or 63 percent, took place in Malaysia. The
long productive life of the plantings carried out in Malaysia and elsewhere
leads one to expect that total world output of palm oil will continue to rise
at a rate close to the one realized in recent years rather than along the lower
long-term trend. A major part of the future increase in output is, in fact,
expected to take place in Malaysia, because of its extensive new plantings
under high-yielding varieties, covering 290 thousand ha. of land between
1961-71, and its plans to bring another 140 thousand ha. under oil palm in
1972-76. A smaller but yet significant increase in output is expected in
Indonesia, where new plantations amounted to 25thousand ha. in 1961-7~ in addi
tion there are plans for extension to another 25 thousand ha. during 1972-76,
with an equally important contribution to additional output from replantings
and other forms of rejuvenation of old stands. In West Africa, the Ivory Coast
has planted 60 thousand ha. in 1961-71 and has plans covering another 10 thousand
ha. in 1972-76, thereby increasing its relative importance as a producer by 1980.
Nigeria could also achieve considerable progress in output, both in the sub
sistence and commercial sectors, by rehabilitating its smallholdings and by
- 16 -
planting new areas. On the whole, however, Southeast Asia is expected to
increase its total share of world output at the expense of the traditional
African producers on account of more extensive plantings and higher yields.!/
The expected output of individual countries in 1980 is shown in Table 12, together
with present and past production. Total output in 1980 is projected at 4.3
million tons, representing a growth rate of 12 percent in 1971-80, as against
14 percent a year between 1967 and 1971. Of this total, about 3.2 million
tons would be commercial output representing an increase of 20 percent, or 225
thousand tons, per year in 1971-80 period, compared with 21 percent or 130
thousand tons per year in 1967-71. The proportion of total palm oil output
to the expected production of all fats and oils (by weight, oil or fat equiv-
alent basis), which declined from 4.6 percent in 1950 to 3.2 percent in 1967
and recovered fully in 1972, would increase to 7.8 percent by 1980.
23. As discussed earlier, the price prospects for palm oil in the period
to 1980 will be influenced by the relative abundance of the oil in relation to
other vegetable oils with which it.is substitutable in consumption. Since palm
oil and soybean oil are expected to compete closely in the period ahead to meet
the demand for vegetable oils,~ the different conditions surrounding the supply
1/ The 1980 forecast figure for many countries like Malaysia, Indonesia, Ivory Coast, Dahomey and Cameroon are arrived at by estimating the oil palm areas by age distribution and multiplying them with yields for the corresponding ages. The yields used are mostly those available from selected areas, which could be higher than the average yields for the general run of the stands. The 1980 estimates would, therefore, seem to represent the upper limit of the likely output for most of the major producers including Malaysia, Indonesia, Ivory Coast, Dahomey and Cameroon, unless either the areas planted or the yields increase far beyond present expectations.
~/ Of the total increase in consumption of fats and oils (oil or fat equivalent) in the period to 1980, palm oil will account for about 17 percent and soybean oil for 30 percent.
- 17 -
of these oils must be given particular attention in evaluating the likely impact
of this competition on their projected prices. A certain degree of inflexibility
characterizes the supply of both oils, though for different reasons. In the ca~e of
palm oil the low supply elasticity is due to the perennial nature of the crop, while in the case of
/soybean oil it is a consequence of the fact that soybean oil is a by-product
of soybean crushings for meal, so that, contrary to what could be expected for
an annual crop, the supply of soybean in the form of oil cannot be readily
adjusted to the demand for oil because the demand for meal is considerably
larger and growing at a more rapid rate. The form in which the two competing
commodities are traded also differ. While palm products are mainly exported in
the form of oil, soybean trade takes place mainly in the form of beans for
crushing into oilcakes in the importing countries.
2h. In recent years, US exports of soybean have increased rapidly to
Europe and to newly emerging markets in the Soviet Union, Japan and Taiwan,
partly in response to growing needs for high-protein content animal feeds
linked to the growth of livestock production. One aspect of this development
has been the rapid expansion of crushing capacity in Europe. According to USDA
estimates,!! Us exports of soybean will increase by about 1 million metric ton
a year in the next 12 to 15 years, reaching about 22 million tons in 1980. In
the United States themselves, soybean crushings are projected to rise on average
by 750,000 tons per year, to reach about 26 million tons by 1980. US exports
of soybean oil are expected to increase relatively slowly, i.e. to 900,000 tons
(1971:800,000), in view of rising domestic demand for the oil. But the expansion
of crushing capacity in Brazil and especially in Western Europe is expected to
1/ See George W. Kromer, op.cit.
- 18 -
result in large soybean oil supplies to the world market from these sources.
European countries have recently appeared as net exporters of soybean oil,
indicating the possibility of saturation of the soybean oil market in these
countries if the trend in soybean crushings continues.
25. Given increased supplies of both palm oil and soybean oil in the
coming decade and the fact that, though highly substitutable, these oils are
not perfect substitutes either with each other or with other vegetable oils,
some pressure on their market prices will be exerted.l/ However, this is
likely to be moderate as the supplies of other vegetable oils are not expected
to react to any great extent to a favorable price differential in the period
to 1980 and, as stated earlier, world demand &nd supply for all fats and oils
are projected to be in balance by 1980, which excludes any serious risk of a
fall of the prices of fats and oils in general. The market outlook for both
palm oil and soybean oil is fairly similar, rapidly increasing supplies being
in line with prospective increases in demand with a likelihood of small and
temporary excess supplies developing in the period to 1980. Therefore, there
is no reason to suppose that the price ratio of palm oil to soybean oil will
change markedly in the decade ahead. On this assumption the projected prices
of the two oils are shown in Table 13 where prices of other competing oils and
corresponding price ratios are also given.
1/ Chart 2 shows that there is a fairly close relationship between the relative price of palm oil and the share of palm oil in exports of competing vegetable oils. The correlation coefficient between the two aeries is -.704 in the 1955-1967 period and -.491 in the 1955-1971 period. The fall in the correlation is an indication that the pressure on the price of palm oil is less in periods of greater scarcity of competing vegetable oils (in this case, 1968-71 was such a period).
- 19 -
26. With regard to the future price of palm oil the following factors
are relevant. The projected total world consumption of palnoil of 4,130
thousand tons in 1980 (at the 1972 average price of $212 per metric ton,
c.i.f. Europe) which includes 3,030 thousand tons in the commercial sector
and 1,100 thousand tons in the subsistence sector in the producing countries,
falls short of the 1980 forecast production of 4,280 thousand tons (3,180 +
1,100). With a projected excess of 150 thousand tons of "real" commercial
de~~nd over marketable supply, a fall in price of about $12 a metric ton
is deemed necessary to ba2nce demand and supply in 1980. The 1980 market
price would, therefore, be about $200 per metric ton, c.i.f. Europe.!/
1/ This is the projected nominal price. The "real" price, i.e. the price in 1972 dollars would be $160 a metric ton, using the projected United States wholesale price index as the deflator.
- 20 -
IV. IMPLICATIONS FOR BANK GROUP INVESTMENT POLICY
2 7. Oil palm is one of the areas in which IBRD investment has been very
active. The Bank Group has participated in the financing of plantations of
oil palm in Malaysia, Indonesia, the Ivory Coast, Dahomey, Cameroon and Papua
and New Guinea. Total loans sanctioned by the Bank Group on oil palm projects
(including the oil palm fraction of mixed projects) in the last 5 years or so
has amounted to US$ 100 million. In addition, the appraisal of a small project
in Ghana covering 5,000 ha. has been completed and a number of projects are
under consideration in Malaysia and Indonesia.
28. The economic rate of return on the Bank Group projects appraised in
the past 4 years or so has ranged from 7 to 13 percent in the West African
countries to 16 to 18 percent in Malaysia and over 20 percent in Indonesia.
These calculations were based on a projected palm oil price of $160/ton c.i.f.
Europe. According to the projections presented here; the price is expected to ~$160 in 1972 dollars)
be about $200 per ton c.i.f. Europe in 1980 dollars! i.e. higher in real terms
than the projected price previously used (which would be $128 per ton c.i.f.
~Jr~e). Moreover, yield rates on newer varieties of oil palm could possibly
be raised.l/ If this were so, the economic rate of return an future oil palm pro-
jects would be higher than calculated in previous appraisals, even allowing for
some increase in costs. Consequently, the price projection for 1980 is such
as to encourage further investment in oil palm production on the basis of rate
of return alone. MOreover, should the price behave less favorably than pro-
jected, the margin of maneuver is sufficiently wide to reduce the probability
of losses on new investments to a minimum.
1/ In Malaysia, for example, the yield rates on newer varieties are expected to be 6-7 tons of oil per ha. or even higher as compared with the average yield rates of 5 tons per ha. on the present generation of varieties.
- 21 -
29. New investments in oil palm plantings would generate additional
output mainly after 1980. The peak yield period of palm trees occurs around
the lOth year following planting, gradually diminishes until the 20th year
and falls further with aging stands.!/ The total production life of the tree
is more than 30 years. Given the present age distribution of trees, a large
proportion of the increase in world output after 1980 would come from new
plantings.
30 • Prospects of demand for palm oil after 1980 depend partly on the
future growth of total demand for fats and oils and partly on the growth
potential of competing commodities. Though it may be assumed that world
demand for all fats and oils will continue to increase at the same rate as
in the 1970-1980 decade, demand for vegetable oils and oilcakes will probably
grow less in the developed than in the developing countries,g/in particular
the major producing countries. Total import demand may thus represent a
diminishing share of world demand for vegetable oils and oilcakes in the 1980
to 1985 period. On the other hand, some recovery of output of competing vege-
table oilseeds, notably groundnut which is mainly a cash crop, may reasonably
be expected in the major producing regions in response to high prices and the
prospects of higher export earnings.
!/ For example, in Malaysia the yield rate per ha. on high-yielding varieties has been found to increase from 3,500 kgs. in the 6th year to 5,150 kgs. in the lOth year; thereafter there vas a gradual decline in yields to 4,350 kgs. per ha. in the 20th year and to even loweT levels later.
gj In a tentative USDA projection, demand for oilseed meal and fishmeal is scheduled to grow by 3.6 percent annually in ~stern developed countries in 1980-1985 against 3.8 percent in the period to 1980. In developing countries as a group the corresponding rates of growth are 3.4 against 2.8.
- 22 -
31. In total, therefore, the expectation of a slower rise in import
demand for vegetable oils and increasing export supplies of commodities
competing with palm oil after 1980 point to the need for shifting the locus
of future investment in palm oil production away from major export-oriented
countries to areas where the potential growth of internal demand is greatest.
Such a shift of emphasis would be in conformity with the policy of encouraging
the diversification of output in the major oil palm producers of Southeast
Asia. Although it would also entail the use of Bank funds in areas (mainly
West Africa) where yields and hence rates of return on investment are lowest,!!
nevertheless, taking into account the production alternatives in West African
countries, the case for expansion of palm oil output in these countries is,
on balance, stronger than for similar ventures in Southeast Asia. The main
benefits to be derived from increased investment in palm oil in the West
African countries would be a saving in import outlays in the longer run (as
suming continuing rapid growth of domestic demand) and a possible rise in
export earnings OI-ling to the diversion of competing local crops, notably
groundnuts, for export.
32 . The particular conditions of production of palm oil in ~st Africa
indicate the need to direct new investment primarily towards rehabilitation
of existing plantings and processing. Many countries in West Africa produce
considerable quantities of palm oil from wild groves. The oil is extracted
In Malaysia and Indonesia, the yield of modern stands at full bearing is almost 5 tons of palm oil per ha. (or over 2 tons per acre). In the West African countries, yields from plantations under modern varieties range from over 3 tons per ha. in Ivory Coast and certain parts of Zaire (upper reaches of the Zaire river in Equator and Haut-Zai:re Provinces) to about 1.8 tons per ha. in the remaining partsof Zaire, Nigeria, Dahomey, Cameroon and other countries (yields may of course vary consider~ within each country). lower yields in West Africa are due to inadequate rainfall and its uneven distribution over the year, and inadequate sunlight.
- 23 -
by hanipressing, boiling and other traditional methods. The extraction rate
by these methods is low and the free fatty acid content of the oil is high.
An oil mill can extract from the fruit much more oil than a hydraulic hand
press, which in turn is much more efficient than traditional methods. MOre
over, households in the area tend to harvest fruit only to meet their direct
requirements, because the transport of the fruit to distant factories is dif
ficult in the absence of good roads and the time taken in transporting it makes
it too stale to be used by the oil mills. The extraction rate and the quality
of the oil could presumably be greatly improved by establishing mills within or close
to the areas with thick wild groves. Cash payment for the palm fruit by the oil
factories m:iglt induce households to harvest the groves as fully as possible,
and to try to rehabilitate them. These factories could have some commercial
plantation of their own to ensure regular supplies of fresh fruit, but most of
their requirements should be met by stimulating a fuller harvesting of wild
groves. Such a system would permit the utilization of resources which are
partly going waste at present. MOreover, it would contribute to bringing the
subsistence sector of the countries concerned into the monetary system. Nigeria
is a particularly good example of a country where this type of encouragement
would be useful. In Nigeria, wild groves cover an estimated 2 million ha.,
accounting for 95 percent of the national output of palm oil.
As of now, the Bank's proposed palm oil projects and projects with
a palm oil component involve about 114 thousand ha. of pRntings, most of which
to be carried out in the second half of the decade (Table 14). Of this total,
close to 30 thousand ha. would be planted in Indonesia, about 5 thousand ha.
in Ghana and 2 thousand ha. in Costa Rica; about 77 thousand ha. would also be
- 24 -
planted in Malaysia. By far the greater part of the output from all these
projects would be available only in the first half of the next decade.
··- --- ~:.
:. ::...::.
-, )'
) ..
)<
~: WORLD PRO!JUCTIO:\ o~· t'AT3 A$ OILS, lYS:-::.~71
/ /
/ ./
/ s~ -/-~, ---
~~:
~
/...(
.:;::
•.(
;<
;~
Lt:
2[.~
~£
?ota: fat,:; and oi 1.8
/
,/ /
/ ./
/
Ard.m&.l r~ts fird marine ci ls
/ /
/ ·:/./
. . I . ! . j . i l·-~.!~. . '/ .... ,.
~·:.
'
• . I . • .
.
. / To~l veretable oics / ............. , 7----~-~ ·;··-·
18 ' ../i'' 2;.
" . ~,! ~~-.:
/ /
/
/ /
/. (56) /
18.1
/. (39)
/
11.9
(15.J)~
.,. ~(::;~1 ~..:......:....:-1
rf....~ t.r:.C:.:.U ::...:: of •c..::C. p::.C...:.c '"~..._~:l (:..:-. p:;;-::c:;.:.)
.:wdt· :-, ;:.-:l' l:. 67 -l ,--. ,·r4
£:1iJ'lfJ(-J~~· r-- •I \ /;.
7 :
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,..•.""' ('.r ~.
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"--......__} I .-/'/
7.'/ ~.j-- s.-;
./ 7.:
,.......-, E ~-; ~-3· z-~~ ~f:.- ; 71 I I I j_j_j ,...-
Anic:.;l Othar vegetable cd ls - :-:t-.;--i:le YCt:;e-: • .:-=:..e ~::.s
6 '
+1-~L~~-·--~-~--~-:-~~~~-r~~L.... : . 1 • • ..--. I . ' .. , + .. , ______ 1 ___ - . ..- _., . , < I , .. : i t_,- :-:---·--'·-··
' /"';-···! ~=--~~------ i .
i : I
--12' J~a"t.s
10 ~--- -----~--- -·!---· -- _.;._
6 i I
Soybean Oil 1
I . . • I 2 I ! ·: 1 . ! • · ---1--~ ---- ·-------- . . .---~---·. .... - . ___ j_;__. _ .. ___ :c;-,-iJ'a'f o~r ! • -~~--" ... ;sl 52 53 54 55 56 ~·1 '·" ;;1 6o 61 62 63 64 65 66 67 68 69 10 11 12 73 74 75 76 77 78 79 so
(-··--······--···············---~~···•··········Actual·-·····-··-·········--·······················)( ••••••••••••••• projected-·····-·--·--···)
4' ·-···• ·----r-~~~:~ ,_ -- .,-I--------·
i
(4.J)
:;ow: For projected "out[!J.t" ;,, l'i~~'•, proJections of 1980 consumption were used (assuming balance between supp],y and demand).
~ce: Unilever, Ltd., '"<lor-.., i'••·~ •r~l Oils Statistics".
oils l. 2. J.
·4.-· $. 6. 7·
.:;::.-"::n;:::.r. c:=..._ 3'~·.:~:::_,::,•,.; .::- c.:...: groundr.ut .Jil cottcnseed oil· r.:>.pesee.:i o~l p.;.l.""l oi"l. ct..>er cils
Percent
1'20
110
100
90 '-'· ' t-+ -~· r !
-•-t-·7-t"
'"' ~\1 111 DIITZG£"""1 Gf•'AJ'HF-'.4P£~ EUOfNE Olfil(H.-. CU. '' 0. ll, ~Lr..' INCH MAD£ IN U ., •
Char l.i!, I ReLATIVE ffiiCES OF PALM OIL AND SOYBEAN OIL AND SHARE Of PALM OIL IN EXPORTS OF COMPETING VEGETABLE OILS L!,
I I IiI
I I ,
I I 'I
Percent
e)
BO r-: ·- :- i-! 4
70 ~+----~30
60
50
40
30
20
10 ' i :!.5 =:::tn:r=t=t-:-r:=J--1t;++--r'·
1 ,, +--;
1 70 71 Ll The set of "competing oil•" 1ncludee palm, soybean, palm kernel, rapeseed, 1unnower, groundnut and cottonseed. Relative
prices are the ratio of individual oil prices to a weighted average price tor the competing set, using current export shares as weights.
Source: Table 9.
,:
Percent
rHJ :14l·lr. OlfTlCifN r;r~APH PAPf~
;;, o, ll, o'l J..<' dd.;H (lJOtNr OltT7U.
........ (J! 114 u. l; "· Chart 2: RELATIVE ffiiCES OF PAL'! OIL A!ID SOYSEAN OIL AND SEARE
OF PA!.:1 OIL IN EXPORTS OF COMPETING VEGETABLE OILS /1 Percent
lSi. · : : : : I r
1
-:- • I i : .. l~r:: .. : I . ' • • • • : •• : ~ • : : ~~~ .-.-.-_-,-;:-r:-: · ~ , , ; 1 : : ~ 1 i ; . : ~ : :: : ! · -· : · : ~ 1 --~· : • t.. ! . I I : : ; ! o o : • t : ~ • I • • ; 'I r , • • - -; ·- • • - • •· • • • • I i I • • '
1 • • ' I I 0
1 # ' " 00 ' " ' +1
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I ·t ' • : : , ' I ' ; " I ' ' j ' • I ' . . ~ l ' . .~- . . - • . ( r- ! J • • + . : . , t • I ' I , , I I I • ··1 ' ' ' 'I .. + ' I + I . ~ . ' I ~- ~..-., • -r- • -~. F"""•· ,"'' • • l ... l.t,-1 l-r-t·c••\ "'I·'" '11"" ., .. -t~•"l·t·--ol ·•~\----~,----~1
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110
~~il;-~~ :·t! ··:; \ ~~~~ ~~~-~r;. /-: 1
f f !; H2A·rt+;i·±; r-~~-:{: r\;~ ;-f~'f11:~8~-cT~~Tf::: :..:. j.: :~~~~~J 100
, ..... ~. ···li··_r(f ·-[~··· ..... _;r.~~~~t·-•·1··-·---4·LiW,r:. ,1_1 ... , ... t.-;·+··-t-- .... , ... , 1 .... , .• _,_
~··•j··-'-L\.·'-\~:1:~· . ...: t-·j·--;··.··-t:--:·• .. :.;.+r;--t-·.· ''t\l"t"T•'t- I\'- ...• ; .•.. !.·-·---·-; ~-:t·_;-_:[::: :'N/;·:-:-~i :i~ i! :~~~;.::: _:-~;~:j; j:: i: .. ·Gl: ~-: '_i -?~~[ oiicdiall"~ ---::
90 ---r--; • ---· -· ~-- . l------..--·----r-- ----,-1,- ..... .. 1 .. --+ , ...... a. ... --~ ,_ ~ --~: : t :.: .. LP- c:'E ... ' • • ~--r- .. - . ...,__ . · ·: · :-f-r-: i-··-~·~-~-f·i·r-~--; ·~~· i -i :-i ~; :-:-- ... ~ ,-t-! t :~\-: ~ 1 • I i .. :: 1 . ~ 1 •.• 1~ -l.1.;.oY-.bl:;;l~v. ,l£..!.'t. s:::&.Le.)
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70 rl--:-;-"-."7..;_"~~+-..:...+-J ~1-'--+:-•~- ;:>tt~r:: h~-rF~.t-~ 1 :-t-~-1-;..t -:--p-~·";-rZt:t~__:_q~'-;--c·· .-::- +-·--·--::-:-=-:-:--.r30
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.. .W: .i-l=t:.t .... ~H::!tttt ~Jr±--ut:tt H--H..r -t-h+ r+tH-++-t-- t+++·F-r:r- ...r;::i.I±i +-r± .:.;-:r:.-:.) t:i~t; _: }.~;~~f~~qr1tr.t,~i~7: ~ ~ ~:-tT+++ ,.-++-t .......__~J..:...L J.ZI:::i'K---r-+ LtH-lJ-++++ +-~+++++- p.:: t-1!--h-t-•-i-:+ '-' Li--t+---·lff- -~-; • ,..,1:'.-...... '"'· • · · t )
50 ~::;:)t-.~7~"":-I~[;A-++ i-~-~--:-~t++:-t--t-+++-r+-r+-r-:: I ITt l ~__:-t+;i+,:i;L;:ih "-+-·:r~'+ rJ.~h:.3;Cb 125 .. ~·-· ·r-r....._ -THt•+-+-J~--.;.., r•-\ ·-~1+~"-~-t·· o---t--r-:w· 1:i_+- rr-~±±i+ ·r· ··Qt1 1
_,, ····-•" • • r·~---+--·-•~t··--·r~~-j t~=r~~L1·+~-.~. ~:rtt-t--nii~t±+-;~.+~~:~- K -~;=-=-+--~tt~ -1-i-':~.+ +-~·~t-: ~-~-trtt-~=~~~ ~-=--~~~-:~ -2r1~ ~ -: ~--r:_t-~L~~:-1~::--f==~~_w-~=t=~~
40 t:·• H· · '----:--• -~,.--t;~.,..-f rirrT" :--, .. , f·r'\-·"7t-:-t-:-+ ·--~r--~L-:+;+-'-rt---+ ~1'--'>·;--•---- ... '"-:r ·--·-t~--,....,...r-:--..,.---·--h··r~,-t"T"----:--j +~t+n-r+' --r··:. tr;t---'- gmr-. ,· i H+ Lt-~. Lr :--t--:+ . .;.. ;....0--t-r•;-; ·'+~--i-++~+ i;ft·[-~-c;~-~-·. -. :. ; r: , ... ,_.L!-'~--:---l·;·T ·----+ ,, G l ....._.__t-t·, +-----·--+ ·- -.- ·--t H--r-r~~-- ---rf-t--+- 1'+1- -+--t·+ ,__ -rrr~·r-t---;---,-_._ _ ... __ ___._,_t_J.___._rt -t-_.·---t-- t-·•-·- -· . -~ ·--t·r --·- ·t--+-. _,__ ... r-~ "t-,--+ +-·~--r-r......-,---1~ I
~H-t: · · +-'-·.;. ·t r-t-9· ....,. -•+ . t-~-+ +-+- ·t+++ ' :, l-- rt-.:;. i-h -1-- ~-H+ t++-t- --t-+-+ t-F ~ i · r ,; + +-:-i ; ~-; ~ r i ~-+..;.. ~+ : ... r -,...:-·-'-
30 ., ... ,....,. r·r+· ·t-·:·+·r- ·t-t·-~ 'T-t--- 1 •-H- H-H ,, '~r--1 -~-r- --1+-h· --rrt-·l . .;..;.L,.j·· .... ~x L r··-rt++·· -·-·-· '1--->.l-·--~ ••. .....,.....l~.,.--. : , ....._... , I . , .--- . . ~~ . I ~· j • lt • Lt~} H .. t : ._'-._ -:---: . I L . t: , : :~; It t--~-:--+-t---7-~~ .: \ I : ! ! . ! . L 1 , : . + . ~ : . o· -•:~-·-- ··~·· ,, .. l•·h· t·jtl'to-t -'·-1-~f c-.--t. ·++ t-'··"tt·•·_·...:.•+t·t· •·+• •. ,,.,~ri·--,·------·•-+·•----,-·-~·-r-"--··t·+-~~--_-j":~"t.tt·~ r~-: -1·: ~: ~ ~ ~.t: -1~·~ - t ·~·t; ;~~ ~ ~--+~0~t~-r -~.- ~1-t:-:·~-~~:~-~ t;: r-~ r'~--~L L _; 1
t. -~-; 1- · ·t-. -~-:-:_~~\i:t-~:-·~· -:_-;_-~rt=:t ~ t :: .-::~:-~:::_~-~
20 r+c--t;--[-- t-•' ': '' t ·-+·+·I 'T1 "\--• •. , • i ~--~1 ... -;--r •·r---t·;---r--:----o-·-:r--:-···H •\-t , ... -:-~ ;·-'-·--~j· ·-·----·-c··-··' [··---:-. r;----·· t----:----:----·---·1 [1--~+; -~ t, • t' 1,,; ;----:- +. '1 ··r 't .. .;.. .. L\ + ;..,...:. -r-~....-o --i-+•-.Lj i- ~- ;..f&EJ. -~ ..,....J. ;_;·!- . , - ~ ..... + : ...... J: . ...,. - .. t· . ..;.... .:... ... ~ . E ~Ttf=ftl-+-·. :·tj#t. -~~· ~~J~1rH=;..~~,..f.--irtr-:-----n-+---r--ri--'- ~-a-- ·1- ~-- ... , .. f--n+r-1-.-·f--t-···t .. ,L~.,- ~----t...:...,... .•
H- •-h H' 1 t •- 1 ! H I -r+i-+ -ri 1 ·r· r+ ~-......-Trf +~ 'Tr · '--:-;- •+--r•-- · •+ -r +- r• 'r ·I,··~ ··-~-+-~1-· 10 M-"-t- - ~tlt_jh -• tJJi -Ji t . . + t 11 r-- +t-+· rt-+--- +·+--~-+--o-f--:-:-- •-r-·~..L..,.t .. ~:.,...1---r--+-'l._s
H-t:t.HmE· f 1 'll; llJJ4'i ±i j1 +t u: H-t+r+ 'I I ·ii . r+f i.;"i'-i=P=Ii :...t.+=t.:Pi;tH~ :+tr -::.:.;:.;..R+-~r-14 +-1 ' '· r l 1 - T t · +t ++-+ + 1 i , r -r-r 1 .fir- H-r -·-1-H- r+-+• H-+ + ·-t- ... + r--r:- -rt-- 't- · • LJ' t r + ·:i- , ~-++t++-~ · -+-. · 1 • • • o--+-+ ~.,. l~> · ;o 1 '" 59 ov o o 3 ol! o; t> 67 cB 69 70 71
L1 The set of "competing oils" includes palm, soybean, palm kernel, rapeseed, sunflower, groundnut and cottonseed. Relative prices are tt• ratio of individual oil prices to a weighted average price tor the competing set, using current export shares ae wo1(hta.
Sourcee TtDl~ 9.
,:
Table 1: PHOWGI'ION OF PAI11 OIL, BY COUNrRIES, 1951-72
(1, 000 metr; c tons)
Proouct~cn oi Paim O~I Year West Ea:st Ivory Sierra ~ -Total Total Total· v:orld
Malaysia M.:ll.aysia Indonesia Nigeria Zaire Coast Dahomey Cameroon Leone Ghana Asia Africa Latin Total /1 a America /1
1:151 49 - 121 * 191 * * * * * 170 930 - 1,100 lf$2 46 - 146 * 170 * * * * * 192 910 8 1,170 1953 so - 161 * 181 * * * * * 210 990 10 1,210 1954 55 - 169 * 196 * * * * * 224 1,040 15 1,280 1955 57 - 166 * 197 * * * * * 223 990 17 1,230 1956 51 - 165 * 221 * * * * * 222 1,060 18 1,300 1957 59 - 160 * 234 * * * * * 220 1,020 23 1,260 1Si)8 11 - 148 * 225 * * * * * 218 1,050 21 1,290 1959 73 - 138 * 245 * * * * * 210 1,030 22 1,260 1960 92 - 141 * 234 * * * * * 233 910 17 1,220 1CJ61 95 - 146 541 224 20 36 31 35 36 241 1,017 22 1,280 1962 108 - 142 509 229 23 35 37 35 40 2.50 1,002 26 1,277 1963 126 - 148 510 224 25. 36 51 31 42 27i~ 1,037 35 1,347 1964 122 - J.61 515 209 2.8 45 53 39 43 283 1,050 39 1,372 1965 149 3 1.57 530 162 27 43 44 39 37 309 996 1!2 1,348 1966 186 3 175 .508 168 28 30 39 40 44 364 973 45 1,383 1967 217 9 174 325 149 3o 27 60 41 56 400 807 51 1,258 1968 265 18 188 370 196 31 31 46 42 54 471 894 60 1,425 1969 326 26 189 425 179 36 33 52 45 55 .541 947 69 1,556 1970 402 29 21.5 488 180 52 37 54 53 60 6u6 1,046 10 1.762 197J.I2 551 31 225 500 200 69 40 56 60 60 813 ,1,110 85 2,008 19122'] 6oO 72 250 100
-* The figures are included in the regional totals.
{l An adjustment bas been made to the figures for Nigeria before 1961 to make them comparable with the f:\.gures from 1961 onwards. Tbie adjustment has been cazried into the regional and wrld totals •
. '/1. Provisionel.
~urce: FAO, Prodaction Yearbook (Annual).
c
Table 2: EXPORTS OF PAUl OIL FROM THE PRG!ltlCING COUNTRIES, 19.50-72
(1,000 metric tons)
Exports of paJ m oil from producing countd~" Share of naJ m Ivory Total Total Total Horld oiJ in ,wrJ d
Year Malaysia Indonesia Nigeria Zaire Coast Dahomey Cameroon Anuola ARia Africa Latin Total exrorts of America fats <'lr.d_Qils
19~0 19Sl 19')2 19')3 19~h 195''1 19~6 19S'7 19.58 1959 1960 1961 1962 1963 196h 1965 1966 1967 1968 1969 1970 197111 197271
52 L7 47 h9 so 56 60 6J 81 77 97 9S
107 117 J26 1u3 Jll4 189 286 357 ho2 572 670.
97 1o6 120 132 1uo 116 ):?c) 129 132 103 1Q9 118 100 no 133 126 177 133 152 179 1'55 190 200
176 152 170 20h 212 J R5 Jfl8 1 flo 173 157 186 167 121 128 136 152 145
)0 4
23 8
20
*
130 120 137 132 137 11t9 ] t:;l 154 Jf,3 186 167 154 152 1h2 129
79 84
116 1.59 133 1?4
. 112 110
1 1 1 l l l 2
1 2
1
1 1 1
2 13 28 55
13 8
15 13 17 16 10 12 6
16· 11 9 9
J2 13 10
9 10 13 14 15
*
* Figures are included in the regional and world totals.
/1 Provisional.
Sourcesi
3 1 2 1
10 10
7 10
6 13
6 10
7 6 8
* *
18 ll
7 13
8 9 9 9 9
13 15 15 17 18 15 14 15 12 11 11
*
FA.O, Trade Yearbook (Annual)· Unile.,.r Ltd., London, "World Oils and Fats statistic•" (Annual).
•
149 153 167 181 190 172 185 190 213 180 2o6 213 207 227 259 269 361 322 438 .536 557 762 870
360 326 3h0 371 387 367 377 366 369 397 402 367 3lh 313 309 261 266 188 197 192 182 200 225
-l 1 l 1 2 L. L. 4 3 2 3 3 3 3 3
509 h79 507 5~2 577 539 562 ')56 583 578 609 581 523 5u4 572-554 630 512 638 731 742 965
1,098
9.) ll.) 9.8
10. :J 9.0 7.8 7.7 7.5 8.1 7.4 7.3 7.0 5.9 5.13 S.7 5.6 6.2 u.s 5.7 6.7 6.2 7.9 8.7
'
~: Ii.Jlt~ P.Ar~':IC:P::rro~ !!l r·r:~lA!;c.::~;o Ol-' PAlY. OIL AND PA.l.M K~{.·'J 1-::\).J.,/,_'fiJN
Pro_~~r:te F1:r.-;nd 31 DA t.a Ter:hr.ic-a1 Dlt.J /1. 'total co:; t. A..":':>Ullt 1-\::·io.J. ov.:r Ar••:1~ ••• 1.. • .!.
ProJectQ Loan/Cre<litQ Purpose which pl.Jnt1ng3 l'.l:~ .t.:..tlr:-..:..t.':!d ::<~x.
Countq c.ur1ed ov.t. Totd ond 1971 !~·u -, ·,~d Prorlal"'ticn Ar_:;u~l f>'r,-,:-;::~t!on
l.!Ji• -l.t/!;1 J..:I::HJ lco.r ,r,...,..:.~:u.d
metric \.one
(US$ 11111llonl (US$ :.J.Uior) (Thousand ha. ) ( Thaunr>i ha. ) (Thou. met.ric tona)
Ya.ll·:::.h ~to·.e ot Pa.hanc
9.) 1967~1970 40.0 $6.0 )7.0 lst Jengl<a 20.0. Produ.:tion 11.1 u.~ - 1981 2rA Jenglca 20.0 8.6 Production 1!111·1972 6.7 ).2 . 6.$ )2.0 1982 )).0
l.r. ~oce~s. 1?73-76 8.6 45.0 1985 ;r~ Je~a 23.9 11.9 !'r-:>r;•.:ctinn - - - 50.0
!r.t.:-:-:~sia & prc.c~••·
1.s;. ;;orth Su.u t.ra 24.0 12.7 Production 1969-1973 13·7 11.7 0.) 18.4 68.) 1960 68.S &. trocess.
2n.:! ::ert.h Su. .... aW'a 20.) 1).2 Pro<...'\:cUon 1970·1974 8.0 4.) - 9.) )9.6 1982 42.0 4 proceae.
?at· .. l.:. ar.~ r:,..., C•1inea i ·t') :.e·.; ~r:..t~ lat. Sta&• ).) 1.) Prcduction 1968-1972 1.7 - ).7 6.4 1981 8.)
lie"J 3ri tal.n 2nd St&p ).9 2.2 &. proceaa.
Prod01ction l970.l97S )ol• · 0.6 - 0.1 12.6 1964 14.1. '"
C.~·=:~cn \
10.9 9.0 Production 1?67-1974 7.9 7.2 - 7.4 20.7 1$84 22.4 .• Eaa~ 14.1 1.9 Prod;.;.cUon 1!168-1973 9.0 4.) . ).0 22.0 1982 2).)
!ihc~eT
li:i:r.rl 8.2 4.2 ?reduction 1966-1970 6.0 6.0 - 4.) 10.1 1960 lO.l & process.
!von '?'ast 24.0 14.1 Production 1968-1971 l6.o 16.0 - 2).2 )9.0 1919 )9.0 l.o• noject
2nd Project 6.$ 2.6 & process.
Prod·-Jction 1972-1914 4.S - - . 1·9 1982 9-9 &: process.
~.) s~~rr& !.~or.e iJ. ).1 /}; 2.4 Production lgr3-l975 0.9 . - 2.1 4.3 .• ., c & proe:esa.
TOTAL 1.82.4 99.8 97.4 68.5 0.3 123.3 362.3
J:! Oil p&la ;>ortion ot. eost. ot -project and of' IBRD lO&n or c:redit. 1 ea.cb 1nelud.lng inter11t.
11 Are& and production :t'11Ure• exclude I.JZIO\lnt• ruulting f~ rehabilitation an4 tertllhe'J" which are include4 in ve.lue ot lo.,l/credlt.
J:J. Iocldes the produotion rrooa 1,077 ha. planted in tha period 1S68-l972 prior to ·-"""'"""t ot IBRD project.
f:. Ioclu4u one-thir4 ot tl1o project w>it coo~.
a..&. • not available.
Souz-a•• lli!D Projects \opor'-nt. \
•
:"'<. 2:'1. :.t· •. ~ .. ~ :i ~-
i:..:i~i..-.. t..,.: j,.-.,;.:, • t '"1 ·tt•i P!"nlu~t '.0"1 A z:...~ ·.:..<! P: .-.. ~ .·- :.1 c:. :/:~-,- 197> l)..;,J Year 'lin·l~-..t.(l
:r:.etr.l c lone
(TJ,ou. autric tons)
. ' ' 11.0 1).0 1961 :u..o . " 2.0 8.0 1962 8.2
- 8.5 1985 10.0
. 7.8 17.6 1980 17.8
. 2.) 9.9 1982 10.2
. l.l 1.) 1981 1.4
- 0.1 2.1 1964 2.2
. 2.1 6.) 1984 7.1 - l.) 5.) 1982 6.0
. l.k 2.4 1979 2.4
. s.r 9.4 1979 9:4 . . - 1.9 1962 2.4
- 0.8 0.9 1981 0.9
. 35.-6 86.8
~
s1-.arc of Production Ec~-no..~1e rate a-::-:<..lari,. fo~· .. ::-:r"'!'t __ e!' rc~"ccrn r .. ..:r. .i •1.~ cil kernela
(P(:reerrt.a&e)
100 100 16 100 100 17
100 50 16
75-to 15-80 29 75-60 15-80 29
100 100 a.. a ..
100 100
)0 )0 n.& .. 2$ 2$ 7
100 100 12
So-GO S0-60 12
100 100 D.~
0 100 1?
Table 4• ESTIMATED \o.O!U.D OO~UMPTION OF OilS AND FATS, BY MAJOR RIDIONS
(million metric tons - oil equivalent)
-J"\·vc},JDL'C; G~:\:D n~vt;}ooinr; G.:--:-,·,:o Cvntrall;r Plarc":rl r.,·o·J o
"Til \ ~ ~3) \1:) (::) H (ij \b) (·ll (lll/ \ ll2 .JE2. u.s. & \·i..:.:st.crn L~ti.n
C<;nt.cia £-~rope Other~ Total Asiu. Africa America Total U.S.S.R. Ot.hcrs Total 'r!ORLD
1··::'0 ).l! "., .J•( 0.5 D.6 3.0 1.0 1.3 5.3 1.9 3.2 5.1 22.C 5.0 6.1 0.7 ll.8 ).0 0.9 1.1.> 5.3 2.0 ).6 5.6 ?:: . 7 ~.l G.ti 0.6 12. 1 3. ~~ 0.8 1.7 5.7 2.2 3.6 5.& 2J.S 5.2 6.5 (;,8 12.5 3.4 1.0 1.1 6.1 2.2 3. 8 6.0 ~L.0
.l;.:;.; 5.3 6.8 0.9 13.0 3.6 1.1 1.7 6.4 2.4 3.9 6.3 .... ~.- "? "-....'•1 ,, .. - 5.5 7.0 1.0 13.5 3.7 1.0 1.9 6.6 2.4 4.1 6.5 2!~.6 ....... :;;:;
::.;06 5.7 7.3 1.1 14.1 3.7 0.9 2.1 6.·r 2.8 4.5 7.3 2~.1 :-) ~ 7 5.7 7.7 1.2 lti .6 4.0 1.1 2.0 7.1 2.9 ).9 6.8 (:~ . . :; ~ ~~;c :;.8 7.G 1.1 11:.7 3.8 1.4 2.2 7.4 3.0 4.0 7.0 2;!.::.
6.:!. 7.9 1.2 lS .2 4.5 l.h 2.4 8.3 3.2 4.h 7.6 ---·· 6.1 8.2 1.2 15.5 4.7 1.5 2.4 8.6 3.3 4.6 7.9 )~·. ·~ J
__ ::):.. 6.1 8.h 1.3 15.8 4. 7 1.6 2.5 8.8 3.4 4.7 8.1 :.~.7 J)::2 6.5 8.6 l.h :16.5 5.1 1.5 2.5 9.1 3.5 4.8 8.3 33./ J lc:; 6.6 8."( 1.6 :16.9 5.1 1.6 2.6 9.3 ).6 4.8 8.4 ]' .. 6 :Jr~!.. 6.9 9.1 1.8 17.8 5.2 l.S 2.8 9.5 ).8 5.0 8.8 )6.1 l7() 6.9 9.5 1.9 18.3 5.5 • 1. 7 2.8 10.0 4.0 5.2 9.2 37.5 19~6 1·3 9.8 2.C 19.1 5.1 1.8 ).2 10.1 4.1 4.9 9.0 J8.2 2.Yc./ 7.2 10.0 2.1 1$1.3 5.6 1.9 ).2 10.7 4.2 4.9 9.1 3~.1 17~3 7.6 10.) 2.2 20.1 5.9 1.8 ).2 10.9 4.3 4.9 9.2 ~.~ .,
JO~
lJ67 7.7 10.6 2.3 20.6 5.7 1.9 3.6 11.2 4.4 4.9 9.3 Ll . .i lj(O 7.8 10.9 2."4 21.1 6.2 2.J. 3.6 n.9 4.5 5.1 9.6 4Z.6
'Irend GrC>-~th Rate 1960-1970 2.6 3.0 7.0 3.2 2.5 3.1 4.J 3.2 - - 1.8 2.9
(l) A~t;;al consur.ption figures for the t:ni ted States a::rl apparent estimated consu:nption for Canada. (2) A~tt:.&l ccr.51ll".ption figurea 1'or \-iestern Ecll'Ope, including France, Federal Republic of Germany, Netherlands, Italy, BelgiurrJLuxembourg, Denmark, Norway, Sweden, Switzerland, Austria,
?ortue;al, Finl&r.d., Republic of Ireland, Greece arrl Spain. Yugoslavia is included from 1965 only. (3) Ot~ers include apparent consumption for total Oceania, actual consumption for Japan ani apparent consumption for the Republic of South Africa. (5) Apparent consumptior. figures for Asia, excluding Japan and l-lainland China. (6) Apparent con~,pt1on f1eures for Africa, excluding Republic of South Africa. (7) Apparent consunption figures for area. (9) Actual cOnsUITlption figures. (10) Others include Eastern l'urope and Mainland China; all the figures are estimated apparent conswnption.
Sources; Fats and Oil Sit .. !:!£.!:!., April 1971, uSDA; various issues of World Oi1B and Fats Statistics, Unilever Ltd., London and Oil World Weekly, l:!a.'llburg; Pilot StuSor :·• :.s arrl Oils, second progress report prepared 'by the Food ani Agriculture Organization of the United Nations,. COJTilliBsion on International Commod:i. ty Trade, E/CN.l3/L, 6, 'E"March 1958,
-·--· -------------
Tub_l..£.21 CONSUMP'l'lON Pm fn;AD Or' SEJ::~TED F1HBLE OILS A!JD FAT:>, OECD COUrll'Rll'.S, 1;/C0-1968
(kilos per head per year)
1960 1961 1962 1963 1?64 1965 1966 1967 1968
United States Vegetable Oils 5.? 5.1 5.3 0::.9 6.1., 6.4 6.7 6.8 7.? Shortenings 5.7 s.s ( •• 1 6.1 6.2 6.1., 1.? 7.2 7., Margarine (fat content) 3.5 J.S 3.4 3.5 3.6 3.6 3.9 ).8 3.9 Butter 2.7 2.7 ?.7 ?.5 ?.5 ?.4 ?.1 2.0 2.!
Japan /1 Vegetable Oils and Fats 3.2 3.6 4.2 4.7 5.1 5.1 s.e 6.2 6.!. Animal Oils and Fats 1.1 1.0 1.1 1.4 1.7 1.7 1.9 2.1 2.1
Belgium-LuxembourE /1 VegEtable Oils and FPts 1?.4 13.1 1).1 1J.L 1).8 1).6 12.5 ll.6 Fish Jils and Fats 2.1 2.2 ::>.6 1.8 2.:> 1.4 1.7 ).2 Butter 7.5 8.1 8.7 7.9 7.5 7.2 7.2 e.? Margarine (prcduct ~ight) 11.9 11.8 12.1 1? .9 13.? 1).1 1).) llt.6
Den.~.ar Y./1 V<:oget~ble Oils and Fats 8.1 8.0 7.1 6.8 7.h 7.0 7.0 1.0 7 .c /2 Fist Oils and Fats 4.6 5.4 5.1 6.4 6.) 6.1 6.0 6.2 6.C 72 Butter 8.9 6.8 8.6 8.7 8.6 8.3 8.1 7.9 7.7 1'2 Margarine (product weight) 16.9 18.8 18.2 18.5 18.6 16.0 17.9 17.9 18.0
France 11 Veget;ible Oils ar.d Fats 10.5 10.7 11.0 u.s 12.1 12.1 12.0 12.3 13.1 /2 Fish Oils and Fats o.s 0.6 0.6 0.7 0.7 0.6 o.s 0.6 Butter 6.3 6.4 6.6 6.7 7.1 7.4 7.3 7.8 7.5 12 ¥.argarine (product weight) 3.0 3.2 3.3 3.4 3.3 3.3 3.1 3.2 3.3
<krranv /1 Vegrtable Oils and Fats 1?.0 11.7 11.7 1? .s 12.7 1?.5 12.6 12.2 Fi~h Oils and Fsts 1.6 1.7 1.6 1.0 1.1 0.9 1.1 1.4 -Butter 7.0 7.2 7.4 7.3 7.0 7.1 7.1 7.1 7.0 /? Margarine (product weight) 10.7 10.0 9.7 9.8 9.9 9.4 9.6 9.4 9.3 7?
Ireland Vegetable Oils and Fats 3.9 .7 3.5 4.1 4.5 4.0 4.3 la.8 4.3 Butter 1).2 1 ') 13.2 13.0 12.9 12.2 11.5 11.2 lO.S Lard 0. 7 0." 0.7 0.7 o. 7 o.8 0.7 0.7 0.8 Other Oils and Fats 0.7 0.7 o. 7 o.s l.h 1.7 1.8 2.0 ?.1
Italy /1 V€F;etable Oils and Fats L.O 3.6 5.1 5.2 5.1 6.la 6.9 8.5 6.:; ~~ !l'Jtter 1.5 1.4 1.5 1.5 1.4 1.5 l.la l.S 1.~ !'ergar!:-."= (prG<i'J-: ... ..-.e ::.¢. t) 1.6 1.7 1.9 1.9 1.8 1.8 1.7 1.8 1.~ +--
NetJ·lErle-~1-js ~ -
VegEtable Oils and Fa t.s 16.0 15.6 14.7 16.1 16.2 17.0 16.8 17.3 Fish Oils and Fats 5.6 6.5 7.6 6.9 7.3 6.4 7.1 7.6 Butter 4.6 4.4 4.8 u.s ).7 3.6 ).0 2.la Margarine (product weight) 19.L 19.5 19.4 20.0 20.3 19.L 19.6 19.5
United Kingdom /1 Oils and Fats, rEfined 3.9 4.0 L.l 4.2 4.3 1.,.7 4.7 s.o 5.1 I? Animal Fats (incl. lard) ).8 4.1 4.4 s.o 3.6 3.5 ).7 ).6 3.6 T? Butter 7.1 7.5 7.0 7.2 7.1 7.2 7.5 7.0 7.4 T? ~largarine (product weight) 6.4 5.8 6.0 6.0 5.9 5.4 5.3 5.2 5.2 7?
Economic Comrr.uni t.ie s /) Vegetabl<: Oils and Fat.s 8.2 9.9 Butter 5.6 6.0 Margarine (product weight) 6.6 6.4
/1 Two-year avcra~e 1960-1961 to 1967-1968. 72 Avt·rage 1968-1969. 73 Weighted average consumption per head, using 1967-1968 for last year for countries where data is in two-year average. For
Ireland consumption of "other oils And fats" was used as proxy for margarine. For the UK "oils and fats, refined" was USE'd as proxy for vcget.able oils and fats.
Source a OECD Food Consum[!tion Stati ~ti cs 1 1960-1961\, Paris, 1970.
Table 6: CONSUMPI'ION OF FATS AND OILS IN MAJOR CONSUMING AREAS, 1971 AND 1980
(1,000 metric tons)
1971 1980 Change Actual Projected 1971 to 1980
United States 7,410 9,500 2,090
~stern Europe 10,870 13,800 2' 930
Japan 1,600 L1 3,000 1,400
Canada 400/1 620 220
Total OECD Countries 20,280 26,925 6,665
All Other Countries 24,150 29,130 4,980
Total World 44,430 56,050 11,620
/1 Provisional.
Source: Unilever, Ltd., "Vk>rld Oils and Fats Statistics".
Percentage Change
1980/lm
+28.2
+27.0
+87.5
+55.0
+29.3
+20.6
+26.2
Table 7: HORLD OUTPUT OF FATS AND OILS, 1960-1970
( 1, 000 metric tens oi 1 or fat equivalent)
---l96J 1961 1962 1963 1/tl 1965 1966
Ve~~table Oils 18,580 19,000 20,230 20,540 22,035 22 '775 23,285 or' ::r.:~r.: Ea:.ble oils 16,770 17,225 18,545 18,765 20,135 20,790 21,420
A~-..~~.:;:2. ?c.:.s c.;.C: ~~arine Cils 13,540 13,945 14,135 :.4, 04J 14,250 14,4~5 14,690 c.:.' ·"t.!.c;,: ...:.:-• .:;.~~j_ fats 12,5&5 ::.2,830 12,980 12,995 :3,125 13,3~5 13,545
!'.a.~"ine oils C,.....""" ,,, 1,115 1,155 1,045 ., ... ~C' ~,J.?..; 1,110 1,145
A:l Fc.t.s ~~:-.C C-:..ls 32,120 32,945 34,365 34,580 36,31.5 37,230 37,975
Sunflower seed 1,180 1,345 2,045 2,195 2,2!..0 2,750 2,730 Scybe:.r.. 4,020 3,750 4,250 4,395 4,545 4,855 5,230 Rope seed 1,075 1,235 1,240 1,245 1,160 1,510 1,545 ?a:.~ 1,220 1,280 1,277 1,347 1,372 1,348 1,333 Gro~d.nut 2,680 2,920 2, 700 2, 765 2,850 3,115 2,960 Cocor.ut 2,110 2,120 2,115 2,180 2,230 2,220 • 2,365 Cottc::seed 2,275 2,270 2,290 2,380 2,520 2,635 2,575 PaL"l! Kernel 440 430 440 455 460 !_.{·' 455
Srurce: Unilever Ltd., "World Oil.s and Fats Statistics"; FAO Production Yearbook (for palm oil).
..
1967 1968 196;;
2), 795 24,635 24,800 21,930 22,845 22,930
15,270 15,460 15,135 13,890 14,140 ~,03S 1,360 1,320 1,105
39,045 40,095 39' 935
3,285 3,420 3,400 5,520 5,649 6,090 1,625 1,785 1,660 1,258 1,425 1,556 3,020 3,195 2,775 2,150 2,220 2,065 2,2to 2,260 2,455
370 375 375
1970
26,365 24,425
15,5:.:5 14,3:..5 1, 2~0
41,9l0
3,360 7,400 1,810 1,762 2,985 2,120 2,360
,. ~
375
r'arc,.::--.:.~ z;e incro::-Lr.t. l9:'i) ~0 19? J
+41.9 +45.6
+:;.;...e +~.)
+25. 7
<iJ.5
+1e4.3 .,.5L.l +6J.L +~.~ .,.ll.l + 4. 7 + 3.7 -ll.. 8
Co11111odity
Edible Veget~ble Oils Soybean Sunflower Ground nut Cottonseed Rape sPed Coconut PALM Olive Sesane Palm K~>rnel (incl. babassu)
Animal Fats Tallo;;/Greases Butter (fat content) Lard
Industrial Oils Linseed Castor Tung
Marine Oils
!£1!l
Table 81 \IOR.LD OUTPUT OF FATS AND OILS, 1971 AND 1980 PROJECTIONS, RANKED BY ~RCENTAGE SHARES
(million metric tons, oil or fat equivalent)
1971 Col!l!l!Odity Output % of Total
26.00 60.46 Edible Vegetable Oils 7.10 16.51 Soybean 3;55 8.26 Sunflower 3.05 7.09 PAUl 2.50 5.81 Groundnr' 2.50 5.81 Cottonse•i 2.)0 5.35 Rapese!'d 2.10 4.88 Coconut 1.55 ).60 Olive 0.70 1.63 Palm Kernel (incl. babassu) 0.65 1.51 Sesame
14.10 32 .?9 Animal Fpts 5.00 11.6) Tallow/Greases 4.90 11.39 Butter (fat content) 4.20 9.77 Lard
1.70 ).95 Industrial Oils 1.25 2.91 Linseed 0.35 0.81 Castor 0.10 0.2) Tung
1.25 2.90 l".arine Oils
43.00 100.00 ~
Output
37.0 11.0 5.o* 4.3 4.0 3.3* 3.0* 2.9* 1.9* 0.9* 0.7*
15.8 5.4* 4.5* 5.9
2.0 1.)* o.s* 0.2*
1.4*
56.2
Sources 1971 Production: Unilever Ltd. "World Oils and Fats Statistics" and FAO Production Yearbook.
1980 % of Total
65.83 19.57
8.90 7.65 7.12 5.87 5.33 5.16 3.38 1.60 1.24
28.11 9.61 8.00
10.50
3.56 2.)1 0.89 0.)6
::>.49
100.0
1980 Projections: TI1e estimates for oils marked with asterisks are those msde by FAO and published in their Study, "Agric'ultur-al Commodity Projections, 1970-80", Rome 1971. Others are Bank staff estimates.
Year
1955 1956 1957 1958 1959 1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971
Table 9: RELATIVE PRICE OF PALM OIL AND SHARE OF PALM OIL IN EXPORTS OF A SEIECTED GROUP OF
COMPETING VEGETABLE OILSL!, 1955-1971
(percent)
Relative price of Palm Oil /2
99.1 87.9 91.2 97.9
103.7 103.6
92.9 104.4 109.4 109.3 110.7 102.1 112.7 92.4 91.2 96.2 91.8
Share of palm oil in world exports of
competing oils
25.1 24.7 25.4 25.9 24.9 26.5 24.2 20.7 20.3 21.1 19.4 19.3 15.3 17.9 20.6 22.1 27.9
/1 Soybean, groundnut, sunflowerseed, rapeseed, cottonseed and palm kernel oils.
/2 Calculated in percent of a weighted average of the prices of the competing oils, using current shares in world exports as weights.
Source: Prices as in Table 12. Exports: Unilever, Ltd., "World Oils and Fats Statistics".
Country or Group
I. Developed Countries
II. Socialist Countries
III. Developing Countries
A. Non-producing
B. Producing
IV. \o.ORLD
Table lOt PALM OIL - ACTUAL CONSUXPTION/l IN SELECTED YEARS AND DEMA.'ID PROJECTIONS FCR 1980
(1,000 metric tons)
A"tuaT- Consu,-,ntio~ 1980 Pro iectio:ls 1951-SS 1956-bO 1961-65 1967 1971 $?12 At curre-=-r.""t"'l'""9"'"8"'"o
per ton price o!' $?00 re- ton
492
4
18
667
1,181
508
4
57
688
1,257
447
5
74
770
1,296
450
6
80
101 (+666)
637 ( +666)
878
6!J...
90
214 ( +890)
1,188 ( +890)
2,100
50
360
520 (+1,100)
3,030 (+1,100)
2,250
so
360
520 (+1,100)
3,180 (+1,100)
Note: Figures in brackets represent subsistence conslli~tion.
Share in total
52.6
1.2
8.4
37.8
100.0
/1 Consumption !or the developed countries, non-producing developing countries and socialist countries represents net imports.
fl. 1970 data,
Sourcesr FAO Production Yearbook; FAO Trade Yearbook; Unilever, Ltd., ~rld Oils and Fats Statistics•.
"
Table 11: EXPeRTS OF PALM OIL AND SHARE OF EXPORTS IN OUTPUT, ACTUAL AND PROJECTIONS TO 1980, BY COUN'IRY
(1,000 metric tons}
Country Actual/1 Projected/1 1901-o~ 19o7-ti9 19>1->> 19~0-00 1971 1980
Malaysia so 75 118 277 573 1,910 ·(98 .0} (100.0) (94.4) (96.5) (97.3) (97 .0)
Indonesia 123 120 117 135 190 375 (80.4) (80.0} (77.5) (73.4) (84.4) (78.9)
Nigeria 185 220 141 34 20 95 (n. a.) (n.a.) (27.1) (9.4) (4.0) (12.3)
Zaire 135 164 131 p6 115 75 (72 .2) (70. 7) (62.4) 63.0) (50.0) (31. 9)
Ivory Coast 1 2 1 1 28 120 (n.a.) (n.a.) (4.0) (3 .0) (36.4) (54.5)
Dahomey 13 12 11 11 17 65 (n. a.) (n.a.) (28.2) (28.2) (36.2) (61. 9)
Cameroon 2 9 8 10 20 (n.a.) (n.a.) (20.9) (25. 0) (17. 9) (20.0)
World Total ttb 578 1ct9) =fffh> 930 2~660
_) ~4>.7) ~42. 7) ro2.1>
/1 In brackets: share of exports in output, in percent. Percentages are calculated on the basis of average exports and average output in calendar years 1956-1960 and crop years 1956/57-1960/61.
Sources: Actual Exports: Unilever, Ltd., "World Fats and Oils Statistics" and FAO Trade Yearbooks.
Projections IBRD: Commodities and Export Projections Division, Economic Analysis and Projections Department.
I
Table 12: PALM OIL - PllliSENT l'llOJJJ!7flOll, PROlliCTION IN SElECTED EARLIER YEARS A.';D PROJECTED OUT!'I.iT IN 1980, BY COU!'."TitY
(1,000 melric tons)
. Actlliil ~(,cf,[cTfon-z:;r- -l9ifc5Forecast ~- Shares inl980 Oucput. 1951-55 1956-66 1961::6$ l9CJ7-69 Ml Cour.tr;
S c T S C T S C T C 'i'
!-:C. in h o--:·~.: t~ s 1. 1-:.U ..... ay.;:;J.a
2. ). 4. s. 6. 7. 8. 9.
(,rest East Total
Indonesia n;;e::ia Zaire Ivory Coast ::.a:-.c~ey
C:a.:r.eroon Colombia Sierra Leone Total
Ct!'~er ?r~d:'.tcers '; ~.Jo
" ...... 12.
Afr.J..ca kt.in k'.erica Otr.ers Total
World To+,al
51 75 153 lSO .. .. 187 232
~ 1,266
125 151 521 210
25 39 43 -37
1,151
174
~
338 53 17 28 24 -40
500
162
162
~
287 287 134 184 20 358
163 216 16 33 11 39 8 32
lS 15 1 41
7CE 1,205
25 187 35 35 - -&:J 222
122. 1,427
S 3 subsistence production. C m corr.mercial production. T 3 total production.
- 589 589 - 225 225
470 30 500 60 170 230 16 61 77/2 30 17 4772 36 20 56 - 34 34
6o - &:J 672 1,146 1,818
155 - 155 59 - 59
1 - 1 215 - 215
~ 1,146 2,03/2
1,700 270
- 1,970 - 475
625 150 60 175 25 195 30 75 10 90 - so 60 -
810 3,180
200 -78 -12 -
290 -1,100 3,180
1, 700 270
1,970 475 775 235 220 105 100 50* 6o*
3,990
zoo* ?j* 12*
290*
4,280
62.0 ::.s.o 4.7 5.5 6.1 2.4 2.8
l.SL1
!QQ.&.
* FAO esti::u;t<;s, as given in the article "Prospects for Supplies of Pam Oil and Palm Kernels in 1980 1~ FAO !l.onthly Bulletin of Agricultural Economics arrl Statistics, April 1972. ':r.is sign implies tl'.at figures are nPt separately sh:lwn but are included in the world total.
/1 72 a
Source: FAO Prodlction Yearbook; ''West African Production sn:i Export Prospects for Palm Oil an:i Palm Kernel Oil to 1980", FAS, USDA, Wa.shington, September 1972. These figures differ BOl'IBWhat from trose given in FAO Product.ion Yearbook, because of differences in estimates of subsistence production. · All producers except. hose list.ed above.
46.0 11.1 18.1 5.5 ).1 2.5 2.)
9.4L1
~
Years
1954-56 1957-59 1960-62 1963-65 1966-68 1969-71 1972 1973 (mid-March)
1980 (Projected)
1954-56 1957-59 1960-62 1963-65 1966-68 1969-71 1972
1980 (Projected)
Table 13: FRICES AND PRICE RATIOS OF SOME VEGETABLE OilS, PAST AND PROJECTED
Palm Groundnut Cottonseed Sunflower seed Oil Oil Oil Oil
A. Actual Prices ($ per metric ton)
238 343 286 324 236 312 289 294 2?5 310 269 267 245 303 257 262 209 283 305 216 235 385 346 306 212 426 324 327 261 456 349 342
200 312 - -B. Price ratios (Palm Oil = 100)
100 144 120 136 100 132 122 124 100 138 120 119 100 124 lOS 107 100 135 135 103 100 164 147 130 100 200 153 154
100 156 - -
Coconut Soybean Oil Oil
270 331 309 262 272 240 314 238 339 219 360 264 235 270 329 349
288 230
113 139 131 111 121 107 128 97 162 105 153 112 123 127
144 115
Sources: 1960-l~/2r FAO, Document CCP:OF/ST 72/CRS. 3 dated February, 1972 as amended and supplemented. Earlier years: Van Doorn and Co. N.V. - Rotterdam and USDA.
•
Country
Malaysia
Malaysia
Indonesia
Indonesia /1
Indonesia /1
Table 14: IBRD: PROPOSED PALM OIL PROJECTS AND PROJECTS WITH A PALM OIL COMPONENT
Project Area in ha.
Jahore Tengara 60,250
Agricultural 16,667 Credit Project
Estates IV 9,400
Estates v 10,000
Estates, Rubber 5,000
Planting Period
1971/72-1986
1974-1976
1974-1976
After 1976
After 1976
Indonesia /1 Credit Projects 5,000 After 1976
Ghana Production and 5,300 1975-1978 processing
Costa Rica /1 Crop development 2,000 n.a.
/1 The data for these projects are only notional.
Source: IBRD Regional Departments.