Growing Dependence for Palm Oil in World Trade and Consumption

Transcription

1 Growing Dependence for Palm Oil in World Trade and Consumption POTS Philippines, 6 7 August 2015, at the Shangri-La Hotel Makati, Manila there somebody to pick me up tomorrow at the airport Thomas Mielke, ISTA Mielke, Oil World, Global Market Research on Oilseeds, Oils and Meals thomas.mielke@oilworld.de

2 Company Profil and Services ISTA Mielke GmbH publisher of OIL WORLD - was founded in 1958 ISTA = International STatistical Agricultural Information Leading private authority for global research and market analyses for oilseeds, oils & fats and oilmeals Independent, not involved in trading, unbiased information there somebody to pick me up tomorrow at the airport Providing monthly and quarterly world supply and demand balances Daily, weekly and monthly publications on We are also providing individual studies and customer support If I can be of any assistance to you <Thomas.Mielke@oilworld.de>

3 On Aug 3 palm oil futures falling to their lowest level since Sept 10, 2014 Additional downward potential limited Palm oil prices may soon bottom out - - getting support from rape oil and soya oil (rising oil share) Upward potential in Oct/March 2015/16 and beyond MALAYSIA: Crude Palm Oil Futures Close First position in Malaysian Ringgit/T Nov Dec Jan15 Mar Apr May Jun Jly Aug Prices from 1 Nov 2014 until 3 Aug 2015

4 Competitiveness of Palm Oil on Energy Market Monthly Prices of Palm Oil & Crude Mineral Oil (US-$/T) Crude mineral oil 150 Palm oil, crude 0 Ja03 Ja04 Ja05 Ja06 Ja07 Ja08 Ja09 Ja10 Ja11 Ja12 Ja13 Ja14 Ja15 Monthly prices from Jan 2003 until July 2015

5 Daily Prices of Crude Palm Oil & Brent Oil (US-$/T) Crude palm oil, cif Rott. 500 Brent crude oil, Brent/ICE Jan13 Mar May Jly Sep NovJan14Mar May Jly Sep NovJa15 Mar Jun Jly Prices from 2 Jan 2013 until 29 July 2015

6 Feed requirements 30.5 Mn T 2014: Palm oil usage 9.6 Mn T (32% of all feed-stock used) and 16% of world PO usage Soya oil 8.0 Mn T and 18% of total use Rapeseed oil 7.3 and 27% Tallow 2.1 Mn T and 24% Other (corn oil, used oil) Biodiesel Use of Major Feedstock (Mn T) 35 others used oils 30 tallow 25 rape oil palm oil 20 soya oil F

7 BIODIESEL: World Production by Country ( Mn T ) J a n u a r y / D e c e m b e r 2015F EU * 12.00* U.S.A * Argentina * Brazil * Colombia....53* Singapore...70* Indonesia * * Malaysia....80* *.17 Thailand * *.79* Oth. ctries * 2.89* 2.65* Total * Change in ( Mn T ) -1.50* World Production of Biodiesel (Mn T)

8 In the short and medium term, palm oil can hardly react to declining prices High price volatility of vegetable oil prices in the past 15 years But producers of sun oil and rape oil have done that (farmers and crushers resonding) Supply response Monthly Prices of 4 Oils (in US-$/T) SB O D utch Su n oil EU '98 '99 '00 '01 '02 '03 R ap e oil D utch C PO cif R'd am '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 January 1998 until July 2015

9 Soybeans: World Stocks as of end-august (Mn T) 100 World stocks of soybeans likely to rise to a record Mn T at the end of 2014/15 season Are we at the beginning of a longer period of surplus stocks and depressed prices? Farmers haver started to react to the low prices

10 Soybeans: World Stocks as of end-august (Mn T) 100 We are probably close to a turning point: After 3 years of sharp increases, world stocks of soybeans will probably decline slightly in 2015/16 Ongoing strong global demand for soybeans & products Shortage of other oilseeds

11 10 Oilseeds: World Area and Production 580 Production (Mn T) World production of 10 oilseeds doubling in the past 20 years. Is this trend sustainable? Strong demand Most recently, protein demand much stronger than that of oils Production falling in 2015/ Area (Mn ha) 88/89 91/92 94/95 97/98 00/01 03/04 06/07 09/10 12/13 15/16

12 Monthly Prices of Soybeans, US (in US-$/T) there 350 somebody to pick me up tomorrow at the 300airport S oyb ea ns, US, cif R'd m yea r a ve ra ge ( ) January 2004 until July 2015

13 1100 CBOT: Daily Soybean Futures (c/bu) Aug 2015 position Nov 2015 position Nov Dec Ja15 Feb Mar A pr May Jun Jly Daily futures from 1 Nov 2014 until 30 July 2015

14 1100 CBOT: Daily Soybean Futures (c/bu) CBOT: Daily Soya Oil Futures (c/lb) Aug 2015 position Nov 2015 position Nov Dec Ja15 Feb Mar A pr May Jun Jly Daily futures from 1 Nov 2014 until 30 July Aug 2015 position Dec 2015 position Nov Dec Ja15 Feb Mar A pr May Jun Jly Daily futures from 1 Nov 2014 until 30 July 2015

15 SOYBEANS World Production (Mn T) and Area (Mn ha) Soybeans: setback in world production in 2015/16 (- 6 Mn T) BUT: Opening Stocks +23 Mn T Production Harvested Area 95 /96 97 /98 99 /00 01 /02 03 /04 05 /06 07 /08 09 /10 11 /12 13 /14 15 /16F

16 Mn T Soybean Crop Trend U.S.A. Argentina, Brazil & Paraguay 85/86 91/92 97/98 03/04 09/10 15/16F 82/83 88/89 94/95 00/01 06/07 12/13

17 In China farmers shift more land into corn and other crops Chinese soybean imports continue to rise CHINA, P.R. : Soybean Area and Production Production (Mn T) 11 Harvested Area (Mn ha) /91 93/94 96/97 99/00 02/03 05/06 08/09 11/12 15/16F

18 USA (42%) Soybean Trade Flows in 2014 China (62%) EU-28 (12%) Brazil (39%) Mexico (3%) Paraguay & Uruguay (7%) Argentina (6%) Exports Imports

19 RAPESEED & CANOLA World Production (Mn T) and Area (Mn ha) Production Harvested Area / / / / / / / / / / / /1 6F 92 / / / / / / / / / / / /1 5

20 CANADA : Supply & Demand of Canola ( Mn T ) A u g u s t / J u l y 15/16F 14/15 13/14 12/13 11/12 Op. stocks 1.60* Output * 15.75* 18.28* 14.02* Imports *.07* Exports * 9.04* Crushings * 7.30* Other use....28*.32* End.stocks...63* 1.60* ICE : Daily Canola Futures (Can-$/T) November 2015 position 400 Jun14 Jly Aug Sep Oct Nov DecJa15 Feb Mar Apr MayJun Jly Daily futures from 4 June 2014 until 30 July 2015

21 Rapeseed Crush in Key Countries (Mn T) EU-28 China Canad a India /96 97/98 99/00 01/02 03/04 05/06 07/08 09/10 11/12 13/14 15/16F J u l y / J u n e

22 Mn 2,5T 1,5 0,5-0,5-1 -1,5 Rapeseed Oil: Change of World Production /02 03/04 05/06 07/08 09/10 11/12 13/14 15/16

23 44 40 SUNFLOWERSEED World Production (Mn T) and Area (Mn ha) Production Harvested Area /94 95 /96 97 /98 99 /00 01 /02 03 /04 05 /06 07 /08 11 /12 09 /10 15 /16F 13 /14

24 Growing global dependence on soybeans due to insufficient supplies of softseeds Oct/Sept 2015/16: Crush of soybeans +16 Mn T of other oilseeds -4 Mn T Oilseeds : World Crushings (Mn T) Soybeans 9 other seeds 97/98 00/01 03/04 06/07 09/10 12/13 15/16F O c t o b e r / S e p t e m b e r

25 World Production of 12 Oilmeals 2015/ Mn T 1995/ Mn T Soya meal 64,9% Soya meal 52,7% Others 17,5% Rape meal 10,8% Sun meal 6,3% Others 26,3% Rape meal 11,0% Sun meal 5,2% Fish meal 1,4% Fish meal 3,9%

26 Price implications of sharply rising soya meal supplies again in 2015/ OILMEALS : World Production Change from Previous Season (in Mn T) Soyameal 11 Other Meals 06/07 07/08 08/09 09/10 10/11 11/12 12/13 13/14 14/15 15/16F

27 38 CBOT : Daily Soya Oil Share in % of total product value 36 Soya oil will have to finance a larger share of the crush value in the 2015/16 season Nearest forward position Jan14 Feb Mar Apr MayJun Jly Aug Sep Oct Nov DecJan15Feb MarApr May Jun Jly Daily share from 1 Jan 2014 until 29 July 2015

28 70 17 OILS & FATS : World Production (Mn T) Dominance of Palm Oil: In 2014/15 PO & PKO account for 33% of world output (68 Mn) 62% of exports (49 Mn) On only 6% of the area Animal Fats Palm oil Soya oil 9 Other oils Rape oil Sun oil 0 93/94 96/97 99/00 02/03 05/06 08/09 11/12 14/15F

29 PALM OIL : Exports of Key Countries (Mn T) 50 Malaysia Indonesia 40 Rest of W orld SOYA OIL: World Exports (Mn T) there somebody to pick me up tomorrow at 20 the airport /01 02/03 04/05 06/07 08/09 10/11 12/13 14/15 O c t o b e r / S e p t e m b e r 0 00/01 02/03 04/05 06/07 08/09 10/11 12/13 14/15F O ctober/septem ber

30 35 INDONESIA: Palm Oil Production & Exports (Mn T) Production Exports there somebody to pick me up tomorrow at the airport F J a n u a r y / D e c e m b e r

31 22 20 MALAYSIA: Palm Oil Production & Exports (Mn T) P roductio n E xports there somebody to pick me up tomorrow at the airport F J a n u a r y / D e c e m b e r

32 PALM OIL: Market Share in Sel. Countries in % of 17 Oils & F ats China India EU /95 98/99 02/0 3 06/0 7 10/11 14/15 92/93 96/97 00/0 1 04/0 5 08/0 9 12/13

33 INDIA: Oilseed Crops and Imports of Oils (Mn T) Crops Imports of Oils /01 04/05 08/09 12/13 98/99 02/03 06/07 10/11 14/15F

34 IN DIA: Imports of 17 Oils & F ats (M n T) Others Soya oil Palm oil 00/01 02/03 04/05 06/07 08/09 10/11 12/13 14/15F 99/00 01/02 03/04 05/06 07/08 09/10 11/12 13/14

35 12 10 CHINA: Imports of 17 Oils & Fats (Mn T) Others Soya oil Palm oil /01 0 2/03 0 4/05 0 6/07 0 8/09 1 0/11 1 2/ /1 5 F 9 9/ /02 0 3/04 0 5/06 0 7/08 0 9/10 1 1/12 1 3/1 4

36 In 2014/15 below-average growth in supplies in the 2nd consecutive year - Result in rel. high price premiums of palm oil over crude mineral oil - Higher seed oil output required, most of which has to come from soybeans (a meal seed) 5,5 5 4,5 4 3,5 3 2,5 there somebody to pick me up tomorrow at 2 the airport 1,5 1 0,5 0 PALM OIL : World Supplies Annual Change (Mn T) 00/01 02/03 04/05 06/07 08/09 10/11 12/13 14/15 O c t o b e r / S e p t e m b e r

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38 250% INDONESIA: Average Rainfall in % 200% 150% 100% normal 50% 0% JULY 2015 JUNE 2015 MAY 2015 SUMATERA UTARA RIAU SUMATERA SELANTAN KALIMANTAN BARAT JAMBI ACEH SUMATERA BARAT

39 160% MALAYSIA: Average Rainfall in % 140% 120% 100% normal 80% 60% 40% 20% 0% JULY 2015 JUNE 2015 MAY 2015 SABAH JOHOR PAHANG PERAK SARAWAK SELANGOR KELANTAN

40 Palm Oil Trade Flows in 2014 EU-28 (16%) China (13%) India (13%) Malaysia (39%) Indonesia (52%) Exports Imports

41 World Production of 4 Major Oils 4 Change on Year in Mn T Palm Oil Sun Oil Soya Oil Rape Oil 10/11 11/12 12/13 13/14 14/15 15/16 O c t o b e r / S e p t e m b e r

42 Daily Prices of 3 Oils in Rotterdam (US-$/T) there somebody to pick me up tomorrow at the airport Coconut oil,phil/indo,cif Rott Palmkern oil, Mal./Indo., cif Rott. Palm oil crude, cif N.W. Eur Feb13 Jun Aug Oct Jan14 Apr Jun Aug Oct Ja15 Mar May Jly Daily prices from Febr 2013 until 29 July 2015

43 8 7 6 LAURIC OILS : World Production & Exports (Mn T) PKO exports CNO exports Palmkern oil production Coconut oil production there somebody to pick me up tomorrow at the airport 99/00 01/02 03/04 05/06 07/08 09/10 11/12 13/14 15/16 O c t o b e r / S e p t e m b e r

44 Coconut Oil Premiums/Discounts of average prices in Rotterdam US-$/T vs Palm Oil vs Palmkernel Oil January / December Ja/Jly Philippines: Use of Coconut Oil & Palm Oil 1200 Thd T palm oil consumption CNO consumption 0 00/01 02/03 04/05 06/07 08/09 10/11 12/13 14/15

45 Trade of 17 Oils & Fats in 2014 EU-28 (14%) USA (6%) North Africa (5%) Russia & Ukraine (9%) China (12%) India (16%) Malaysia (24%) Indonesia (33%) Argentina (6%) Exports Imports

46 Substantial Growth in World Demand of the Oils/Fats!!

47 Oils & Fats : World Consumption biofuel Total Usage in Mn T food and other 89/90 92/93 95/96 98/99 01/02 04/05 07/08 10/11 15/16F

48 17 Oils & Fats Growth of World Consumption (Mn T) to co ve r P op ulation G ro w th a dditiona l pe r c a put fo od u se for B iofue ls /97 01/02 06/07 08/09 10/11 12/13 15/16F

49 8 VEGETABLE OILS: World Balance ( Mn T ) O c t o b e r / S e p t e m b e r 15/16F 14/15 13/14 12/13 11/12 Op g stocks 24.24* Production * * Change +2.9% +1.9% +6.6% +2.0% +5.4% Imports * 73.64* Exports * 74.07* Consumption * * Change +3.2% +2.6% +5.5% +3.6% +4.5% End g stocks 24.33* 24.24* Stocks/use ratio 14.0% 14.4% 14.6% 14.4% 14.7%

50 Future Challenges, Potential Risks & Opportunities

51 The Success Story of the past 30 Years Substantial growth in world production of palm oil In 1980: 4.6 Mn T or 8% of 17 oils & fats In 1990: 11.0 Mn T or 14% In 2000: 21.9 Mn T or 19% there somebody to pick me up tomorrow at the airport In 2010: 46.2 Mn T or 27% In 2012: 53.9 Mn T (plus 5.9 Mn T of Palmkern oil) In 2015: 62.1 Mn T or 30% (only 6% of area) In 2025 at least 90 Mn T of palm oil required

52 Oil palms the by far most productive crop How quickly can yields be raised? To produce 1 Tonne of soya oil requires 8 times as much acreage than in the case of palm oil 4 3,5 3 2,5 2 1,5 1 0,5 0 World Average Oil Equivalent (a) in Tonnes per Hectare Palm Oil Sun oil Rape oil Soya oil 10 years to years to years to 2015 (a) Calculated based on average crush and seed yield

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54 World Production Growth of 4 Oils Palm Oil Rape oil Cumulative Growth in Mn T Sun oil Soya oil years to years to years to years to 2015

55 Acreage limitations. It will be increasingly difficult to expand oilseed and grain production into new areas. Biggest growth is likely to occur in Brazil, Russia and, possibly, on the African Continent. Yield improvement essential Further growth in palm oil plantings in Indonesia, Africa, Brazil and Central America, but little potential for expansion into new areas in Malaysia, Thailand and Papua New Guinea. Labour shortage could become an issue Water is another limiting factor. The big challenge for the future is to raise yields per hectare (oilseeds, grains, tree crops). But how quickly can yields (in the field) be increased? Replantings in Malaysia sharply behind requirements. Logistics, logistics, logistics. Summary

56 Price Prospects - - amidst many uncertainties: Prices have to be suffiencently attractive for marginal producers -- to generate the required supply growth in the years ahead Fluctuating, but downward potential for veg oil prices is limited Veg.oil prices are likely to continue to divorce from mineral oils (as long as mineral oils are offered below US-$ per barrel). In the next twelve months likely downward pressure in meal to become bullish for oil. Seed oils will have to finance a larger share of the crush value (rising oil share). Key uncertainties: Weather and crop development ( duration & magnitude of the current El Niño), farmer selling, currencies, politics,

57 Palm oil prices may soon bottom out - - getting support from rape oil and soya oil (rising oil share) Upward potential in Oct/March 2015/16 and beyond Assuming some yield losses from El Nino, I expect upward potential of fob export prices for crude & processed palm oil by US $ in the next 6-7 months, mainly in Jan/March Monthly Prices of Palm Olein fob (US-$/T) R BD palm olein, fob M alaysia 10-year average from Jan until D ec 2014 Jan04 Jan05 Jan06 Jan07 Jan08 Jan09 Jan10 Jan11 Jan12 Jan13 Jan14 Jan15 Monthly prices from Jan until July 20 15

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