Palm Oil the Leader in Global Oils & Fats Supply Presentation at the Malaysia / Myanmar Palm Oil Trade Fair & Seminar in Yangon on June, 13 there somebody to pick me up tomorrow at the airport Thomas Mielke, Executive Director of ISTA Mielke GmbH, Global Market Research on Oilseeds, Oils and Meals, E-mail <Thomas.Mielke@oilworld.de> Who is OIL WORLD? ISTA Mielke GmbH publisher of OIL WORLD - was founded in 195 ISTA = International STatistical Agricultural Information Independent, not involved in trading Leading private there somebody authority to for pick global me up research tomorrow and at market analyses for oilseeds, oils the airport & fats and oilmeals unbiased information on the past and current global supply, demand and price developments as well as forecasts Daily, weekly and monthly publications 1
The Outline of my Presentation Introductory statements on how palm oil is linked within all oilseeds and oils & fats on the world market The dynamics of world supply & demand of oils & fats (edible & ined.) Biodiesel production has fallen below expectations there somebody to pick me up tomorrow at the airport Outstanding growth in world palm oil and palmkernel oil production Consumers worldwide are getting more dependent on palm oil, owing to insufficient supply growth of other oils & fats Price Outlook World Production of all oils & fats more than doubled in the latest years to 17 Mn T in 1/13 Palm oil to account for 3% of world production in 1/13 And has become the by far largest vegetable oil World Production of 17 Oils & Fats 1/13 -- 17. Mn T 199/93 --.7 Mn T Palm Oil 15.9% Palm Oil 9.9% Soya Oil.% Rape Oil 1.7% Soya Oil.3% Sun Oil 9.1% Rape Oil 13.% PKO&CNO 5.5% Sun Oil 7.3% Others/An.Fats.1% Others/An.Fats 3.5% PKO&CNO 5.1%
Insufficient production of seed oils coincided with a slowdown of demand from the biofuel sector in 1/13 + ample palm oil supplies For 13/1 we expect a major recovery in the output of seed oils led by sunflower and soya oils if weather cooperates But the uptrend of palm oil production is likely to slow down next season from the exceptional growth rates in the most recent 3 seasons 55 5 17 Oils & Fats: World Production (Mn T) 5 35 3 5 Animal Fats 15 1 5 Palm oil 9 Other oils Sun oil Soya oil Rape oil 91/9 93/9 95/9 97/9 99/ 1/ 3/ 5/ 7/ 9/1 11/1 13/1 % 5 Palm Oil: Share of World Market In % of all 17 oils & fats Share of exports 3 1 Share of production 99/ 1/ 3/ 5/ 7/ 9/1 11/1 13/1 O c t o b e r / S e p t e m b e r 3
In the past years world oilseed production doubled On rising acreage and yields About half of the acreage increased came from grains But this shift has come to an end and agricultural land has become increasingly tight Land values more than doubled (partly more than trebled) in the past 1 years 5 3 3 3 1 1 Oilseeds: World Area and Production Production (Mn T) Area (Mn ha) 1 /9 91/9 9/95 97/9 /1 3/ /7 9/1 1/13 World Production of 1 Oilseeds 1/13 -- 3. Mn T 199/93 -- 9. Mn T Soybeans 57.% Soybeans 51.5% Rapeseed 11.1% Other 5.7% Rapeseed 13.5% Groundnuts 5.9% Sunseed 9.5% Other.% Groundnuts 7.7% Sunseed 7.% Cottonseed 9.7% Cottonseed 1.%
World supplies of soybeans were tight in the past years (drought in USA and S.Ameri.) World supplies of all oilseeds will only stagnate ate at around 53 Mn T in 1/13. World oilseed consumption will decline to 57 Mn T in 1/13, down Mn T y-o-y. 1 1 1 Mn T Soybean Crop Trend U.S.A. Argentina, Brazil & Paraguay 79/ 5/ 91/9 97/9 3/ 9/1 7/77 /3 /9 9/95 /1 /7 1/13 World palm oil production set to rise by 3.5 Mn in 1/13 while the other 1 oils/fats decline 1.9 Mn T combined Early outlook 13/1 World Production of Major Oils Change on Year in Mn T 5 Palm Oil Soya Oil Sun Oil Rape Oil 3 1-1 - 7/ /9 9/1 1/11 11/1 1/13 13/1 O c t o b e r / S e p t e m b e r 5
More ample oilseed supplies in 13/1. Biggest increases in 1 OILSEEDS: World Production (Mn T) Avg.Change soybeans, sunflowerseed, 15 Years rapeseed and palmkernels 13/1F 1/13 11/1 1/11 to 1/13 These oilseeds were e also the Soybeans.....* 5.91* 39.1.9 +3.5% Cottonseed....*.* 7.1 3.55 +1.% growth leaders in the past 15 Grdnuts,shelled.* 7.9* 7.15 7.75 +.% years Sunflowerseed 3.75* 35.9* 39. 33.1 +.9% Rapeseed.... 3.*.*. 1. +.3% In 13/1 world production to rise by 1 Mn T and opening stocks up Mn T, boosting world supplies by 7 Mn T Sesameseed.. 3.93* 3.71* 3.3 3.3 +.3% Palmkernels.. 1.59* 13.9* 13.9 1.5 +7.% Copra....... 5.33* 5.3* 5.. +.% Linseed.......*.*.13 1. -.% Castorseed... 1.3* 1.*.3 1.5 +1.3% Total.........3* 3.3* 39.9 55.5 +3.3% Significant improvement in production in most countries ahead next season Major exception is China, resulting in much higher Chinese import requirements of oilseeds and products in the 13/1 season. 1 Oilseeds: Estimated Production Change in 13/1 Annual Change from 1/13 ( in Mn T) - - EU C.I.S. Can USA Arg Bra India Australia China
CHINA: Rapidly rising import requirements Mainly of soybeans, but also of rapeseed, groundnuts uts and many other agricultural commodities Following a stagnation of oilseed imports (at the expense of stocks in 1/13), big jump in imports by -9 Mn T is likelyl in 13/1 7 5 3 1 CHINA: Imports of Oilseeds and Oils & Fats Mn T Oilseeds Oils & Fats 9/95 97/9 /1 3/ /7 9/1 1/13 1 1 CHINA: Imports of 17 Oils & Fats (Mn T) Soya oil Palm oil Others 9/97 9/99 /1 /3 /5 /7 /9 1/11 1/13 7
Rapidly Rising World Consumption of Oils & Fats Demand Growth doubled in past 1 years (up 3 Mn T) biofuels population income But major slowing down since mid-1 17 Oils & Fats : World Disappearance Total Usage and Annual Change (Mn T) 195 1 15 15 135 1 15 9 75 5 3 15 World Disappearance Annual Change /9 91/9 9/95 97/9 /1 3/ /7 9/1 13/1 13 1 11 1 9 7 5 3 1 - The year-on-year consumption growth of the biofuel sector has slowed down in 1/13 - The sluggish trend is likely to prevail in 13/1 with little scope for further growth of veg. oil demand for biodiesel production 1 1 1 1 1 17 Oils & Fats : World Consumption Total Usage in Mn T biofuel food and other 9/9 9/93 95/9 9/99 1/ /5 7/ 1/11 13/1
Rising needs of feed-stock for biodiesel production (soya oil, palm oil, rape oil and others) as well as for ethanol (corn, sugar) require additional agricultural a land This has contributed to a sizeable increase prices of most agricultural products as well as land values But the growth in biodiesel consumption has recently slowed 5 15 1 5 World Production of Biodiesel (Mn T) 5 7 9 1 11 1 13 World Production of 17 Oils & Fats 13/1 - - 193. Mn T 1991/9 - - 3.5 Mn T Palm Oil 3,% Palm Oil 1,% Soya Oil,7% Rape Oil 11,% Soya Oil,1% Rape Oil 1,% Sun Oil 7,% Sun Oil 9,9% PKO&CNO 5,% Others/An.Fats,1% Others/An.Fats 39,% PKO&CNO 5,% 9
1 17 OILS & FATS: Production & Demand Change From Year Ago in Mn T Production Demand 1/ 3/ 5/ 7/ 9/1 11/1 13/1 /1 /3 /5 /7 /9 1/11 1/13 O c t o b e r / S e p t e m b e r 17 OILS & FATS: Production & End'g Stocks Change From Year Ago in Mn T 1 Production Ending stocks there somebody to pick me up tomorrow at the airport - /7 7/ /9 9/1 1/11 11/1 1/13 13/1 O c t o b e r / S e p t e m b e r 1
World stocks of palm oil were boosted to a record 11.7 Mn T as of end-dec 1, Thereof: Malaysia aaysa. Mn T Indonesia. Mn T But with consumption picking up sharply, stocks declined by 1. 1. Mn T in Malaysia & Indonesia 1 1 1 1 1 17 OILS & FATS Annual Stocks / Usage Ratios (%) Palm Oil Sun Oil Soya Oil 17 Oils & Fats 99/ 1/ 3/ 5/ 7/ 9/1 11/1 13/1 3 17 Oils & Fats: Stocks & Stocks/Usage Mn T Stocks/Usage (%) % 1 1 1 1 1 Stocks (Mn T) 1 1 3 5 7 9 11 13 1 1 1 E n d - S e p t e m b e r 11
Growing Dependence on Palm Oil The Success Story of the past 3 Years Substantial growth in world production of palm oil In 19:. Mn T or % of 17 oils & fats In 199: 11. Mn T or 1% In : 1.9 Mn T or 19% In 1: there.1 somebody Mn to T pick me or up tomorrow 7% (only at % of area) the airport In 11: 5. Mn T or % (57% of exports) In 1: 53.7 Mn T (plus 5.9 Mn T of Palmkern oil) In at least 7 Mn T of palm oil required by consumers worldwide 1
5 Palm Oil : World Production Annual Change (Mn T) 3 1-1 99/ 1/ 3/ 5/ 7/ 9/1 11/1 O c t o b e r / S e p t e m b e r In 13 production of palm oil is set to rise to close to 9 Mn T in Indonesia and to 19. Mn T in Malaysia Palm Oil Production in Key Countries (Mn T) 3 3 Malaysia Indonesia 1 1 1 1 1 199 199 1 1 J a n u a r y / D e c e m b e r 13
Price Attractiveness of Palm Oil 3 3 3 3 3 MALAYSIA: Crude Palm Oil Futures Close First position in Malaysian Ringgit/T Jan1 Mar May Jun Aug Oct Dec Jan13 Mar MayJun Prices from 1 Jan 1 until 1 June 13 1
1 1 1 Soya Oil & Palm Oil: Monthly Prices (US-$/MT) Palm oil, crude cif Rott. Soya oil, Dutch fob ex-mill 1 7 77 7 9 97 7 '13 Monthly prices from Jan 197 until 1 June 13 Competitiveness of Palm Oil on Energy Market Monthly Prices of Palm Oil & Crude Mineral Oil (US-$/T) 135 1 15 9 75 5 3 15 Crude mineral oil Palm oil, crude Jan3 Jan Jan5 Jan Jan7 Jan Jan9 Jan1 Jan11 Jan1 Jan13 Monthly prices from Jan 3 until 1 June 13 15
Monthly Prices of Tallow & RBD Palm Olein (US-$/T) 1 1 1 Tallow, Edible, US, fob Gulf Palm olein RBD, Mal, fob Ja3 Ja Ja5 Ja Ja7 Ja Ja9 Ja1 Ja11 Ja1 Ja13 Monthly prices from July until 1 June 13 Palm Oil : World Output and Consumption Growth Rates in % 1 1 1 Production Consumption 3/ 5/ 7/ 9/1 11/1 13/1 O c t o b e r / S e p t e m b e r 1
Growing Dominance of Palm Oil & Palmkernel Oil Worldwide Mn T 15 World Consumption of 17 Oils & Fats palm oil + palmkernel oil 15 other oils & fats 1 5 97/9 /1 3/ /7 9/1 1/13 5 3 Palm Oil Exports (Mn T) Malaysia Indonesia Rest of W orld 1 9/97 9/99 /1 /3 /5 /7 /9 1/11 1/13 O c t o b e r / S e p t e m b e r 17
1 Soya Oil Exports (Mn T) Argentina Brazil U.S.A. 9/97 9/99 /1 /3 /5 /7 /9 1/11 1/13 G-3 : Exports of Soya Oil ( Mn T ) October / September From: 1/13F 11/1 1/11 9/1 /9 U.S.A....97*. 1.7 1.5 1. Argentina.59*..7.5.3 Brazil..... 1.5* 1.9 1.7 1.5 1.91 Total... 7.1.59 7.1 7.7 7.7 G-3 : Exports of Soya Oil ( Mn T ) April / September October / March From: 13F 1 11 1/13 11/1 1/11 U.S.A....3*..39.7.5 1.7 Argentina 3.1*..5 1.7 1..13 Brazil... 1.* 1.1.9..79.9 Total....3* 3.71 3.9.7. 3.9 Daily Prices of Soya Oil & RBD Palm Olein (US-$/T) 1 15 1 Soya oil, Arg.fob 9 1 75 1 RBD palm olein, Mal.fob 5 Soya oil Premiums/discounts 3 15-15 Jan1 Jun Sep Ja11 May Sep Ja1 Jun Sep Ja13 Daily prices from 1 Jan 1 until 1 June 13 1
Rising Dependence on Palmoil 1997/9-11/1: Palm oil exports +3% Exports of all 1 other Oils/Fats + 5% In Oct/Sept 1/13: PO exports likely to be up by 3. Mn T to 3.7 Mn T Combined exports of soya, rape & sun oils down by. Mn T to.3 Mn T 17 Oils & Fats World Exports in Mn T 5 Soy, Rape, Sun Oils 39 Animal Fats 3 Palm Oil 33 9 Other 3 7 1 1 15 1 9 3 97/9 99/ 1/ 3/ 5/ 7/ 9/1 11/1 13/1 17 Oils & Fats: Exports of Major Countries (Mn T) 5 Indonesia Indonesia & Malaysia expected to export 3.5 Mn T of oils & fats in 1/13, 15 Malaysia there somebody to pick me up tomorrow at.. thus accounting the for airport 1 57% of total world Argentina exports all oils & fats this season. 5 U.S.A. Canada Ukraine 9/91 9/93 9/95 9/97 9/99 /1 /3 /5 /7 /9 1/11 1/13 19
Concluding Statements The global dependence on palm oil will continue to rise in the years ahead owing to insufficient production of other oils & fats Palm oil has competitive advantages over other oils and fats, e.g. much higher yields and lower production costs Palm oil is generally priced at quite sizeable discounts versus other oils there somebody to pick me up tomorrow at & fats the airport Higher investments are necessary to raise oil palm plantings and yields to get ready for rising palm oil demand in the future But this has to done in a sustainable way, in line with the regulations of the Round Table of Sustainable Palm Oil (RSPO) Prices of most vegetable oils to fall to a -year low injuly/june 13/1 RBD Palm olein to $ Arg soya oil to $ 9 1 1 1 1 MAJOR OILS : Annual Average Prices US-$/T Soya oil, Dutch, fob ex-mill Sun oil, EU, fob Rape oil, Dutch, fob ex-mill Palm oil, crude, cif N.W.Eur In Rotterdam: Crude palm oil $ Soya oil $ 15 Sunflower oil $ 11 Rapeseed oil $ 11 9/95 9/97 9/99 /1 /3 /5 /7 /9 1/11 1/13F 93/9 95/9 97/9 99/ 1/ 3/ 5/ 7/ 9/1 11/1 13/1F J u l y / J u n e
Thank You for Your Kind Attention! If I can be of assistance to you in the future, you are invited to contact me any time. More details and background information are given in the Oil World Weekly & Monthly Reports, which can all be obtained from the Internet. Thomas.Mielke@oilworld.de there somebody to pick me up tomorrow at the airport 1