3. PREFRRED VEGETABLE OIL 4. ORIGINS OF SUPPLY 5. LOCAL MARKET OVERVIEW

Transcription

1 POSITIONING PALM OIL IN VIETNAM MARKET POTS VIETNAM 1 JULY 2013

2 CONTENT 1. GREAT POTENTIAL 2.TRENDS 3. PREFRRED VEGETABLE OIL 4. ORIGINS OF SUPPLY 5. LOCAL MARKET OVERVIEW 6. CHALLENGES 7. RECOMENDATION 2

3 1. GREAT MARKET POTENTIAL With a population of 90 million, Vietnam is currently the 13 th most populated country in the world and also the 13 th largest importer of palm oil. The country economy has grown rapidly within 10 years period , GDP increased by 7.2% per year on average; and still growing healthy at 6.5% and 5.0% during difficult period from Per capita GDP in 2012 is USD 1540/month, which is three times as much as 2002, and the Government has projected to increase this to USD 2500 in 2015 and subsequently around USD 4200 by % GDP USD Av GDP Per capita GDP USD

4 2. TREND Table 1: Vegetable oil production for domestic consumption Unit est Population Million persons Consumption of vegetable oils Average consumption Growth of each stage Av annual Growth rate 1,000 tons ,080 Kg/ capita/ year / / / / / 2020 % Income growth + higher living standard = higher consumption demand Healthy benefits initiates strong switch from animal fats to vegetable oil Strong growth also driven by fast developing dairies, food processing (instant noodles, snack foods, bakeries, fast foods, canned foods, ready cooked foods, dried vegetable and fruits), animal feed production and other industrial chemical and cosmetics Ä Creating an increasingly exciting market for vegetable oils market in Vietnam 4

5 3. Palm Oil is the preferred vegetable oil in Vietnam Domestic vegetable oil Volume share: % 2% Palm 83% Soya Others Reason: Affordability and versatility 5

6 4. Origins of supply 100% of Palm Oil and Plam oil Products are imported Major import is from Malaysia (75%), followed by Indonesia (25%) 6

7 5. Major Producers for domes8c market Vocarimex Calofic Tuong An Golden Hope-Nhabe VOCARIMEX Group 80% Market share Nakydaco Other Players An Long, Minh Hue, Acecook Vietnam, Vinacommodities 7

8 Vegetable oil products in Vietnam comes in PET bottles, jerry can, BIB, in various pack sizes to suite food safety regulations and consumer demand 8

9 Domestic categorization of vegetable oils There are 4 main categories of vegetable oils products as recognized in local common names as follows : 1/ Cooking oils (majority Palm): - This is the most common type of oil as recognized in the market - undifferentiated but Includes products formulation with major component mainly pure refined palm olein but also includes blended olein/soya oil - Usage: for normal household and Horeca frying, baking, vegetarian, also used in food processing industries. 2/ Salad oils: - Including pure sesame oil, peanut oil, soybean oil, rice bran oil, imported olive oil, canola oil, corn oil etc.. - This is considered high quality and high valued oil. - Usage: salad dressing, mayonnaise, vegetarian and gourmet food processing. 3/ Nutritional oils: target for kids and children, supplemented with nutrients as vitamins A, D, DHA. 4/ Solid oils (Vegetable Fats majority Palm): - Including frying shortening, bakery shortening, margarine, imported BOS, CBE, CBS, Creaming/filling fats etc.. - Usage: production of instant noodles, bakeries, coffee roasting, bread spreading, etc.. 9

10 6. Challenges Ahead Recent changes in Export Duty structure for Palm Oil in Malaysia and Indonesia is a challenge to major local vegetable oils industry players The recent changes in export duties structures of Palm oil in origin countries has challenged the profitability of Vietnam refiners. Palm Oil Prices CNF HCM 28 June 2013 CNF HCMC Import duty Direct import Landed cost CPO 825 0% 825 Local converted cost from CPO RBD Palm Oil 815 5% RBD Olein IV % RBd Olein IV % RBD Stearin 745 5% Even with Vietnam Government implementing WTO self-defense measure to protect local refiners beginning 7 May 2013 by increased the import duties for refined palm oil to 5%, it still favors trades to import refined oil directly instead of importing feedstock materials for refining 10

11 Challenges to local Palm Oil refining Industries Low profitability discourage further investment and development in vegetable oil industries in general. There will be further implication to greater social economic consequences such as employment, supporting industries and trades etc. Current duties structures favors trades to import, sell and directly consume commodity grades refined oil in Vietnam. This may be risky to consumer heath in term of food safety control. 11

12 7. RECOMMENDATION FOR CONSIDEARTION TO PROMOTE MALYSIAN PALM OIL TO VIETNAM The key factor to promote growth of Malaysian Palm Oil usage in Vietnam is that the refiners interests need to be taken care of. TO MPOC Malaysia may give special consideration to provide export duty exemption for CPO export to Vietnam refiners TO VIETNAM AUTHORITIES From the local refiners point of view, we may want to propose to the Government to extend and/or further increase the self-defense duties rates for refined oils. We may also want to propose to the Government to impose more technical barriers and food safety control for direct consumption of commodity grades refined oils. 12

13 The above presentation represent only personal view of the speaker Thank You