Malaysian Palm Oil Complementing Pakistan s Oils and Fats Needs

Transcription

1 Malaysian Palm Oil Complementing Pakistan s Oils and Fats Needs Tan Sri Datuk Dr. Yusof Basiron Chief Executive Officer MALAYSIAN PALM OIL COUNCIL (MPOC)

2 PRESENTATION OUTLINE 1. Global Oils & Fats Scenario 2. The Role Palm Oil 3. Pakistan Oils and Fats 4. Why Buy Malaysia Palm Oil 5. Conclusions

3 1.Global Oils and Fats Scenario

4 Oils and Fats Production ( ) Rapeseed Oil, 10 Sunflower Oil, 10 Others, 47 Rapeseed Oil, 13 Sunflower Oil, 8 Soyabean Oil, 20 Palm Oil, 13 Soyabean Oil, 23 Others, Production : million MT Palm Oil, Production : million MT Source: Oil World

5 Oils and Fats Exports ( ) 1990 Exports : 23.1 million MT Growth in population, income growth, low per caput consumption level 2012 Exports :72.34 million MT Against a backdrop of lack of arable land and reduced supply from competing soft oils, palm oil reliability in supply gives it the added advantage Food and industrial demand: an increased application in the production of food and non food (oleo chemicals/bio diesel), especially in countries such China, India, Middle East, EU, America Source: Oil World

6 000 MT Average Annual Growth in World Vegetable Oil Production ( ) Average Annual Growth ( ) Palm Oil (7.03%) Rapeseed Oil (5.2) Soybean Oil (4.6%) Sunflower Oil (4.4%) Coconut Oil (-0.01%) Palm Kernel Oil (6.3%) Palm Oil Rapeseed Oil Soybean Oil Sunflower Oil Coconut Oil Palm Kernel Oil Source: Oil World

7 World s Growing Dependence on Palm Oil Will Boost Demand Further in the Future (Exports) MT Palm Oil Sunflower, Soybean, Rapeseed Oil Source: Oil World

8 Y-o-Y Growth Change of Oils and Fats Production MT % change Volume Change Percent Change Linear (Percent Change) Despite increase in annual production, overall global oils and fats production is showing a declining y-o-y growth trend from 1994 to 2012 Source: Oil World

9 0.5000% % % Y-o-Y Agricultural Area Growth Change Change Percentage % % % % % % % Source: FAO

10 000 MT Linear (Global Oils and Fats Production) Source: Oil World

11 Oils and Fats Consumption of Developed VS Developing Countries 1993 Developing Countries, 45,743 t MT (58%) Developed Countries, 33,719 t MT, (42%) 2012 Developed Countries, t MT, (30%) Developing Countries, 127,490 t MT, (70%) Source: Oil World

12 Net Importing Countries of Oils and Fats 000 MT Others Bangladesh Pakistan India EU27 China Source: Oil World

13 Growth in World Population / Food Security China EU-27 India North Africa Pakistan Bangladesh Iran Mexico Egypt Japan Turkey South Africa South Korea Nigeria Taiwan Net Importers Net Exporters FAO estimates that by 2050, rising population and incomes will require 70 percent in crease in global food production Argentina Brazil Ukraine Canada Philippines Russia Malaysia Indonesia Net exporters of oils and fats Asia Pacific (palm oil) & Americas (soybean) The rest of the countries are net importers Source: Oil World

14 2.Role of Palm Oil in Global Scenario

15 Scarcity of Arable Land Year World s population (bil) Arable land per capita (x10-3 km 2 ) Need to Use Land Wisely World population increasing Arable land resource decreasing Source: Freeworld Academy & University of Michigan Arable land per capita (ha) The FAO has called upon governments to pay urgent attention to the needs of agriculture and to increase investments in agricultural practices. Susta inability Team Discussion Paper- March Dexia Asset Management

16 Distribution of Agricultural Area

17 Growth in World Population / Food Security Nearly all of the population growth will occur in developing countries. Sub- Saharan Africa's population is expected to grow the fastest (up 108 %; 910 million people), and East and South East Asia's the slowest (up 11 %; 228 million people).

18 Food Security

19 Growth in World Population / Food Security Region Pop. in $1.25 a day poverty (millions % in $1.25 a day poverty Population (millions) Pop. in $1.25 a day poverty (millions) East Asia and Pacific , Latin America and the Caribbean South Asia , Sub-Saharan Africa Total Developing countries Europe and Central Asia Middle East and North Africa Total Source: See World Bank PovcalNet "Replicate the World Bank's Regional Aggregation" at (accessed May 7, 2010).

20 Growth in World Population / Food Security The world population is projected to grow from 7 billion in 2011 to 9 billion by Food production must meet this rate of increase. This alone is sufficient to exert pressure on commodity prices By 2043, per capita oils & fats consumption will reach = (0.5kg x 32yr) + 24kg = 40kg By 2043, world demand for oils & fats = 40kg x 9 billion = 360 million MT This is an increase of 184 million MT in 32 years or 5.75 million per annum If increased demand is to be fulfilled by soybean oil with yield factor of 0.5 MT per hectare, it requires an additional 11.8 million ha of land/year. The world is deforesting 15 million ha per year. If increased demand is to be fulfilled by palm oil with yield factor of 4 MT per hectare, it requires an additional 1.48 million ha of land/year

21 Land Use Type Total Area (mil ha) As % Area Total Agricultural Land Oil Seeds Soybean Rapeseed Sunflower Oil Palm Coconut Other Oil Seeds Malaysian Palm Oil Source: FAO (2011), Oil World, MPOB percent of total land area planted with oil seeds Only 0.29 percent of world agricultural land is used for palm oil and Malaysian palm oil only took 0.09 percent

22 Scarcity of Land Expansion VS Productivity Higher palm oil yields a solution to land scarcity Soybean Sunflower Rapeseed Oil Palm Source: Oil World, Dec 2012 Oil Crop Production (Mn T) % of Total Production Average Oil Yield (t/ha/year) Total Area (Mn Ha) % Area Soybean Sunflower Rapeseed Oil Palm Total Note: 1 for palm oil and palm kernel oil 2 for 7 major oils (groundnut, coconut, cottonseed and above oils)

23 3.Pakistan Oils and Fats Scenario

24 Total Disappearance of Oils and Fats Oil from Local Oilseed Crops Imported Oils & Fats Oil available from Imported Oilseeds , , , , ,000 1,631,094 1,924,697 2,058,252 2,125,427 2,073, , , , , ,746 Butterfat* 80,000 80,000 80,000 80, ,000 TOTAL 2,724,094 3,173,130 3,253,553 3,277,751 3,096,958 Source: Economic Survey & Port Data from Shipping Agents

25 Total Disappearance of Oils and Fats Source: Economic Survey & Port Data from Shipping Agents

26 Indigenous Oilseed Production Cottonseed 428, , , , ,000 Rapeseed 58,000 62,000 51,000 50,000 61,000 Sunflower 264, , , , ,000 Canola 83,000 33,000 27,000 50,000 11,000 TOTAL (MT) 833, , , , ,000 Source: Economic Survey of Pakistan

27 Imports of Oils & Fats CPO 453, , , ,353 RBD Palm Oil 733, , , ,513 RBD Palm Olein 556,214 1,211, , ,603 Palm Fats * 93,851 62,889 65,260 69,652 Soybean oil 48,596 55,762 51,200 40,500 Tallow 29,720 52,133 25,178 32,591 Total (MT) 1,915,391 2,058,252 2,125,427 2,073,212 Source: Port Data from Shipping Agents

28 Imports of Oils & Fats Import of CPO decreased by -43% Import of RBD Palm Olien decreased by -22% Growth in the Import of RBD Palm Oil 185% Market share of RBD Palm Oil increased from 12% to 36% Source: Port Data from Shipping Agents

29 Malaysia Indonesia Market Share Analysis Chart year MPO IPO market share from ,000,000 1,800,000 1,600,000 1,400,000 1,200,000 1,000,000 Malaysia Indonesia 800, , , , Source: Port Data from Shipping Agents

30 Pakistan Year to Date Import vis-à-vis 2012 Commodity Jan - October 2012 Jan - October 2013 Changes Vol. (Tones) Changes % Crude Palm Oil 359, ,618 (89,153) (24.78) Palm Oil 695, , , Palm Olein 689, , , Palm Fats 63,653 65,693 2, Soybean oil 40,500 30,664 (9,836) (24.29) Tallow 32,591 15,264 (17,326) (53.16) Total 1,880,829 2,151, , Source: Shipping Agents Vessel Reports

31 Malaysian/Indonesian Import Comparison 2013 Month RBD Palm Oil RBD Palm Olein Malaysia Crude Palm Oil Others RBD Palm Oil RBD Palm Olein Indonesia Crude Palm Oil Others Malaysian Share January 11, ,876 50, ,000 1,000 15,500 5, % February 4,499 63,647 23, ,579 12,000 27,990 6, % March 8,999 65,477 52, ,368 2,000 10,500 5, % April 9,500 37,499 14, , % May 23,994 61,584 3, , , % June 10,999 84,555 15,000 4,001 38,248 9, , % July 44,749 98,229 11, , % August 38,994 63,501 23,000 1,500 49,507 1, , % September 29,750 57, ,349 35,937 20, , % October 26, ,384 17, ,574 8, , % November 7,297 88,493 6, ,685 1, , % December TOTAL 1,287, , % Source: Shipping Agents Vessel Reports

32 IMPORT OF PALM OIL INTO PAKISTAN (Tonnes) Imported From Malaysia Total Palm Oil Import (MPOB Data) (Oil World) Jan- Nov 2012 Jan-Nov 2013 Jan-Nov 2012 Jan-Nov ,186,280 1,362,678 1,848,000 2,096,000

33 4.Why Malaysian Palm Oil

34 Why MPO? 1. Well established supply chain facilities in Pakistan

35 1a. Well-established supply chain facilities MAPAK QASIM BULKERS (PVT.) LTD HANDLING AND STORAGE TERMINAL (A FELDA/KLKEPONG-WESTBURY VENTURE)

36 1b. Well-established supply chain facilities MAPAK EDIBLE OILS (PVT.) LTD EDIBLE OIL REFINERY (A FELDA/KLK/IOI-WESTBURY VENTURE)

37 1c. Well-established supply chain facilities FWQ ENTERPRISES (PVT.) LIMITED LIQUID CARGO TERMINAL DEDICATED EDIBLE OIL JETTY (A FELDA-WESTBURY VENTURE)

38 Why MPO? 2. Global Expansion and Well- Established Networking by Malaysian Companies

39 Malaysian plantation companies like Sime Darby, IOI, FELDA, KLK, and KOG are now venturing further afield to Indonesia, Thailand, Cambodia, Papua New Guinea and increasingly to West Africa

40 Why MPO? 3. Diversified Activities and Application for Long Term Supply Assurance

41 3. Diversified Activities and Application for Long Term Supply Assurance ACTIVITIES Malaysia Experiences in Global Marketing - Opportunities and Applications Upstream Seed production Nursery Cultivation Harvesting Milling PRODUCTS DxP seeds Fresh fruit bunches Crude palm oil Palm kernel Biomass (Empty Fruit Bunches, kernel shell, fronds) Palm oil mill effluent Midstream Trading Crude palm oil bulking DxP seeds Fresh fruit bunches Crude palm oil Palm kernel Biomass (Empty Fruit Bunches, kernel shell, fronds) Palm oil mill effluent 1. Source of food (global food security ): 80% 2. Oleochemicals: 15% 3. Biofuel : 2% 4. Renewable energy source: Potential Remains Largely Untapped through Palm Biomass Downstream Processing Refining Fractionation Oleochemical Esterification Refined product storage RBD Palm Oil Palm Fatty Acid Distillate RBD Palm Olein RBD Palm Stearin RBD PK Olein RBD PK Stearin Cocoa Butter Equivalent Cocoa Butter Substitute Cocoa Butter Replacers Fatty acid, alcohols, amines, amides Glycerines Palm methyl esters Tocotrienol Consumer Products Packaging and branding Food products Non food products Cooking oil, frying fats Margarine Shortening Vanaspati Ice cream, non-dairy creamers Candles, soap Emulsifiers Vitamin E supplements Confectionery Bakery fats Biodiesel Energy generation Animal feed Organic fertiliser from biomass These days, palm oil and derived products are channeled into worldwide industrial and commercial activities to churn out food products as well as non-food applications Source: MPOC Publications & USDA Database

42 Diversification of Palm Oil Applications 1.Upstream 2.Midstream 3.Downstream 4.Consumer Products: Food and Non Food Usage 5.Product Innovations Vitamin E, Red Palm Oil and Smart Balance, Biomass, Biofuel/Oil

43 Versatility of Palm Oil in Food Applications Traditional Foods Cooking oil Industrial Frying Fats Margarine Shortening Vegetable Ghee Confectionery Fats Ice Cream Filled Milk Non-Dairy Food Products (Cheese analogue, Creamer) As a source of pro Vitamin A and E

44 Versatility of Palm Oil in Non Food Applications Personal Care Products Powder & Liquid Detergent for Fabric Cleaning Fabric Softener Using Palm-Based Esterquat Cosmetics and personal care products can be formulated using palmbased oleo chemicals such as glycerin, fatty acids, fatty alcohols and their esters. The amount of palm based materials in the formulations ranges from 45% to 98%.

45 Why MPO? 4. Reliability in Providing After Sales Services and Quality Assurance Checks at Port of Loading 5. Quality Assurance to ensure transhipment via Pakistan to neighboring countries such as Afghanistan are in good conditions (quality and quantity) 6. Vanaspati and Blended Oil Marketing and Branding can be assisted by MPOC and MPOB for better consumer acceptance. (MPOC Prime Grant, MPOB R&D facilities)

46 Why MPO? 7. Marketing of Palm Olein in Opaque bottles can be facilitated like what was done in Romania and Saudi Arabia

47 Why MPO? 8. Trans-free vanaspati formulation can be facilitated in collaboration with MPO Service Providers

48 Why MPO? 9. Health Issues will be addressed appropriately with MPO

49 Why MPO? 10. A complementary Case Study Conducted by MPOC on Consumption of Palm Oil by Malaysian Population can be the source of reference for Nutritional Acceptance Assuarance for Pakistani Consumers

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51 Areas of Opportunities for Malaysian Palm Oil A MALAYSIAN PRODUCT INNOVATION

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53 Trans fat (TFA) GRAS Status Removal! FDA is currently mandating GRAS Status removal of TFA Food industry may no longer hide behind less than 0.5g TFA per serving size. Most Western countries are fully prepared through reformulated products, mostly with palm oil as the solution UNFORTUNATE SCENARIO IN THE DEVELOPING WORLD Most developing countries including PAKISTAN are still unprepared and continue to consume TFA based fats and foods REMINDER: Even 1% TFA in your diet increases risk for coronary heart disease (Walter Willett, Harvard Medical School, 1998) In Pakistan TFA are still incorporated in Vegetable Ghee based products. We have proven technology to reformulate with palm as an ingredient to achieve Zero TFA

54 Do Not Choose to Fry With Polyunsaturated Oils Oxidized Fats Are Equally Unhealthy as Trans Fats Oxidized fat consumption has been associated with: increased free radical activity, which are disease triggers with potential increased risk of certain types of cancer interrupts endothelial functions and could lead to coronary events

55 Oxidative Stability Measurement (AOM) of Common Oils and Fats Palm AOM Lard AOM Cotton AOM Soybean AOM Com AOM Sunflower AOM Canola AOM Low Lin canolca (C5) AOM Low lin Soy AOM Natreon Sun AOM Natreon Canola AOM % 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Sats Oleic 18:1 Linoleic 18:2 Linolenic 18:3 A variety of commercially available oils were evaluated for their oxidative stability. Palm olein is the oil with the highest oxidative stability (AOM 50). Most other fats have AOM values halve that of palm. High oleic oils such as Nateron Canola are GMO derived and costly. Supply mainly confined to North America

56 Deterioration during Frying Palm Olein is Superior To Peanut Oil For Deep Frying Oil hours FFA % Smoke point C Peanut Oil Palm olein Viscosity (CP) Polymers % Foam Index * Longer shelf life of fried food with no rancid or off flavors produced for longer period as compared to other oils. Fried Packaged Products: Minimum of 6 to 12 months shelf life, therefore can stay much longer on the shelf as compared to foods fried in other oils.

57 Palm Oil Fractions With Different Iodine Values For Vegetable Ghee or Frying Fat Formulation Palm Oil IV Olein IV Hard Stearin IV Super Olein IV Soft PMF IV Soft Stearin IV Super Stearin IV Top Olein IV Hard PMF IV Various tailor made fractions from palm are ideal for direct applications or as blended products throughout the food and frying industries.

58 Through our own experiences with palm oil consumption in Malaysia, we are prepared to assure beneficial nutritional outcomes from palm oil for the Pakistani consumers as well! What Happens When A Population Is Exposed to Palm Oil As The Primary Dietary Fat Consumed Over 20 years Results from an on-going Collaborative Population Study (Unpublished, 2013) National University of Malaysia and MPOC Sundram et al. 2013

59 Subject Characteristics Age (yr) Weight (kg) Height (cm) Subjects characteristics BMI (kg/m 2 ) Females (n=133) Males (n=73) Mean ± SD Mean ± SD ± ± ± ± ± ± ± ± 4.19 Waist Circumference (cm) 79.4 ± ±12.99 Body Fat (%) ± ±6.12 Sundram et al. 2013

60 % Distribution and use of cooking oil in daily diet Rice Bran Oil, 0.6 Canola, 0.6 Corn, 3.6 Olive, 0.6 Sunflower, soya, etc., 13% Canola Corn Palm, 81.7% Olive Palm Rice Bran Oil Sunflower Sundram et al. 2013

61 LDL particle size is a crucial determinant of CVD risk. Small LDL particles are the most atherogenic How diet influences LDL size is an active on-going research question, largely still unexplored but we have emerging data for palm oil!

62 The long term (>20 years) consumption of palm oil has similar effects as PUFA oils on LDL particles but on HDL particles, palm oil has a beneficial outcome not seen with PUFA oils. Lipoprotein Particle Size unit Palm Oil Group Other PUFA Oils P value Total LDL nmol/l NS Large LDL nmol/l NS Medium LDL nmol/l NS Small LDL nmol/l NS Total HDL µmol/l p=0.04 Small HDL µmol/l p=0.01 Sundram et al. 2013

63 Correlations: Carbohydrate intake and Lipoprotein Particle Size r-value p-value Total LDL Large LDL Medium LDL Small LDL In the Malaysian diet, it is the carbohydrate content rather than fats that trigger adverse outcomes for LDL particles and coronary heart disease. Sundram et al. 2013

64 Correlations: Fat intake (Primarily Palm Oil) Size and LDL Particle Total LDL NS Large LDL NS Medium LDL NS Small LDL NS Fat consumption in the form of palm oil had no adverse outcomes on LDL particles after >20 years consumption While Malaysians generally consume nearly 80% of their daily fat intake as palm oil, Pakistanis are likely to have much lower consumption of palm oil. No adverse nutritional events are therefore likely, to be attributable to palm oil consumption in Pakistan. Sundram et al. 2013

65 Conclusion Rising global demand for oils & fats will not be easily met with limited arable land. Possible solution is to rely on high yielding crop like oil palm and identifying the developing country with best potential Dominance of Palm Oil Increasing: Palm Oil continues to be an attractive long term commodity for producers and consumers

66 Conclusion (cont.) Solution Provider: Consumers get strategic solutions from Malaysian palm oil: food security, trans free products and competitive prices

67 Conclusion Malaysian Palm Oil: Your Perfect Partner for Progress

68 THANK YOU Visit MPOC.org.my and follow my Tweets, and my blog