MALAYSIA MYANMAR PALM OIL TRADE FAIR & SEMINAR POTS MYANMAR 2013 TAN SRI DATUK DR YUSOF BASIRON CEO, MALAYSIAN PALM OIL COUNCIL PALM OIL IN THE GLOBAL OILS & FATS MARKET 28 JUNE 2013 TRADERS HOTEL, YANGON, MYAMNAR
PRESENTATION OUTLINE 1. Global Oils & Fats Production 1990 2012 2. World oils & fats demand and supply 3. Demand by major users 4. Growth trend of oils & fats supply 5. Role of Malaysian Palm Oil 6. Brief overview of Myanmar oils & fats situation 7. Palm Oil & Health The Facts 8. Conclusions
WORLD OILS & FATS PRODUCTION 1990-2012 60,000 50,000 40,000 ( 000 mt) 30,000 20,000 10,000-1990 2000 2010 2012 Palm Oil 11,013 21,874 46,011 53,446 Soybean Oil 16,097 25,531 40,217 41,758 Rapeseed Oil 8,160 14,470 23,966 24,444 Sunflower Oil 7,869 9,700 12,551 14,831 Others 37,752 43,130 49,813 51,776
WORLD OILS & FATS CONSUMPTION 1990-2012 1990 2000 2010 2012 Palm Oil 11.08 21.75 45.57 51.74 Soybean Oil 16.13 25.17 39.13 41.68 Rapeseed Oil 8.2 14.27 23.62 24.13 Sunflower Oil 7.89 9.47 12.8 14.52 Others 37.61 43.09 50.59 51.54 Total 80.91 113.75 171.71 183.61 PopulaRon (Billion) 5.27 6.07 6.77 7.02 Gross World Product (Trillion USD) 27.54 43.61 74.54 83.12
200 180 160 WORLD OILS & FATS CONSUMPTION 1990-2012 171.71 74.54 183.61 83.12 90 80 70 140 60 120 100 80 80.91 113.75 43.61 50 40 (US$ Trillion) 60 40 20 0 27.54 5.27 6.07 6.77 7.02 1990 2000 2010 2012 Consumption (Million MT) Global Population (Billion) Gross World Product (US$ Trillion) 30 20 10 0
OILS & FATS CONSUMPTION BY MAJOR COUNTRIES 2012 Country PopulaRon (Million) ConsumpRon (million MT) Kg/year China 1,354 34,290 25.32 EU- 27 504 23,540 46.71 India 1,241 18,870 15.21 USA 315 17,470 55.46 Indonesia 242 8,310 34.34 Brazil 197 7,840 39.80 Pakistan 182 3,880 21.32 ArgenRna 41 3,500 85.37 Russia 143 3,220 22.52 Egypt 84 1,950 23.21
OILS & FATS CONSUMPTION BY MAJOR COUNTRIES Ø Consumption in each country tends to favour locally produced oils and fats. Ø In North America, Europe and the Soviet Union, annual seed crops are the main sources of oil Ø In tropical countries, coconut oil and palm oil, together with groundnut oil, are the main types produced and consumed.
OILS & FATS CONSUMPTION Ø World consumption of oils and fats has grown steadily during the last twenty five years. Consumption over the last five years has increased from 152 million tonnes in 2007 to 183 million tonnes in 2012. Ø The growth rate in recent years has been higher than the rate that prevailed in the 1990's due to the incremental demand especially from the biofuels market.
OILS & FATS CONSUMPTION BY MAJOR COUNTRIES Ø For consumption, the list is headed by two rich countries (Europe and USA) and by two highly populated countries (China and India). Countries in this list have high populations (mostly in excess of 100 million) and/or are significant producers of palm oil or soybean oil. Ø Three countries (Bangladesh, India, and Nigeria) have lower levels of 11-14 Kg/person. However it has to be noted that lipid consumption for food purposes comes also from sources such as dairy products (cheese, cream) other than butter, from meat and fish, and from nuts and chocolate.
OILS & FATS CONSUMPTION Ø In the period from 1999 to 2005, annual increases in consumption were typically in the range of 4 to 5 million tonnes and arose primarily from the growth in demand for oils and fats as a food. Annual increases in consumption thereafter have been higher and reflect the additional use of oils and fats as biofuel feedstock. Ø World average per capita consumption of all oils and fats has also grown progressively each year during the last decade from a level of 18.9 kg in 2001 to 25.9 kg in 2012. Consumption per capita is closely related to income.
OILS & FATS CONSUMPTION Ø In 2012, per capita consumption was 55 kg and 59 kg in the US and the EU27 respectively, compared to 15 kg and 25 kg for India and China respectively. Ø At low income levels, elasticity of demand is high, whereas at high income levels, elasticity is reduced to values close to zero. Ø The highest increases in consumption will be in low to middle income countries, where increasing per capita income can combine with relatively high rates of population growth. Ø These high growth countries will tend to be in the developing world where palm oil consumption has traditionally been strong.
CONSUMPTION PALM OIL VS OTHER OILS 1990 2000 Others 46% Palm Oil 14% Soybean Oil 20% Others 38% Palm Oil 19% Soybean Oil 22% Sunflower Oil 10% Rapeseed Oil 10% Sunflower Oil 8% Rapeseed Oil 13%
CONSUMPTION PALM OIL VS OTHER OILS 2010 2012 Others 29% Palm Oil 27% Others 28% Palm Oil 28% Sunflower Oil 7% Soybean Oil 23% Sunflower Oil 8% Soybean Oil 23% Rapeseed Oil 14% Rapeseed Oil 13%
PALM OIL IN THE GLOBAL OILS & FATS MARKET Ø Palm oil is the largest produced vegetable oil in the world Ø In 2004 palm oil pushed soybean oil into second place as the most produced oils & fats in the world Ø Palm is generally the cheapest commodity vegetable oil and also the cheapest oil to produce and to refine.
PALM OIL IN THE GLOBAL OILS & FATS MARKET Ø By reason of its availability and (relatively) low cost, it is an important component of the increasing intake of oils and fats in the developing world Ø It is a versatile oil used not only in food applications but also non food such as detergents, pharmaceuticals and biofuels. Ø Palm oil is widely used in the food industry, for example, palm olein used as a frying oil and palm stearin as hardstock in the production of spreads and cooking fats.
PALM OIL IN THE GLOBAL OILS AND FATS MARKET Ø A mid-fraction also produced during fractionation is used as a cocoa butter equivalent (CBE). Ø Palm oil is being increasingly used for non-food purposes. In 2000 when production was 24.3 million MT, 3.5 million MT (15%) was used for industrial purposes. In 2011 production rose to 51.1million MT and 11.7 million MT (23%) was used for industrial purposes. Ø When palm biodiesel becomes a widely traded commodity, the proportion used for industrial purposes will rise even further. Ø Without the large volume of exported palm oil from Malaysia, there would be a major problem in meeting world demand for vegetable oil.
PALM OIL PRODUCTION AND CONSUMPTION Ø ProducRon of palm oil in 2012 was almost 53.45 million MT and 90% of palm oil comes mainly from Malaysia and Indonesia Ø Other producers are Thailand, Nigeria and Columbia Ø ConsumpRon of palm oil comes mainly from China, India, EU, Pakistan, USA and Thailand
PALM OIL PRODUCTION AND CONSUMPTION Ø India, Pakistan, Bangladesh, and Sri Lanka with a combined annual consumpron of 9.8 million MT is the biggest regional consumer of palm oil. It is clear how important imported palm oil is to the highly- populated Indian sub- conrnent Ø The USA was not a significant consumer of palm oil and in the past denigrated the oil as a saturated tropical oil. However. consumpron has risen in recent years as American food manufacturers revised their recipes to lower the level of trans unsaturated acids produced through parral hydrogenaron of soybean oil
WORLD OILS & FATS PRODUCTION 2012 60,000 50,000 40,000 ( 000 MT) 30,000 20,000 10,000 - Palm Oil Soybean Oil Rapeseed Oil Sunflower Oil Others Series1 53,446 41,758 24,444 14,831 51,776
OILS & FATS EXPORTS 1990 2000 1990 2000 Others 34% Sunflower Oil 9% Rapeseed Oil 7% Soybean Oil 14% Palm Oil 36% Sunflower Oil 8% Rapeseed Oil 5% Others 26% Soybean Oil 19% Palm Oil 42%
OILS & FATS EXPORTS 2010-2012 2010 2012 Sunflower Oil 7% Rapeseed Oil 5% Soybean Oil 15% Others 18% Palm Oil 55% Sunflower Oil 10% Rapeseed Oil 6% Soybean Oil 13% Others 15% Palm Oil 56%
NET IMPORTING AND EXPORTING COUNTRIES FOR OILS & FATS (2012) REFLECTING REAL AVAILABILITY China EU- 27 India North Africa Pakistan Other Bangladesh Iran Mexico Egypt Japan Turkey South Africa South Korea Nigeria Taiwan Brazil Ukraine Canada Philippines Russia ArgenRna Net Exporters Net Importers Indonesia Malaysia - 15,000-10,000-5,000 0 5,000 10,000 15,000 20,000 25,000 30,000 ('000 MT)
PALM OIL PRICE DISCOUNT VS SOYBEAN OIL 1400 300 1200 250 1000 200 USD/MT 800 600 150 100 50 USD/MT 400-200 (50) 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Palm Oil Price (USD/MT) Soybean Oil Price (USD/MT) Discount (100)
TRACKING CPO PRICES AGAINST STOCK USAGE RATIO 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 0 SUR vs CPO Price 2006 2007 2008 2009 2010 2011 2012 2013F 16.00% 14.00% 12.00% 10.00% 8.00% 6.00% 4.00% 2.00% 0.00% SUR CPO Price Forecasted CPO Average Forecasted CPO Higher Forcasted CPO Lower
WORLD CULTIVATED AREA OF OIL SEEDS Land Use Type Total Area (mil ha) As % Area Total Agricultural Land 4911 100 Oil Seeds 258.03 5.25 Soybean 103.88 2.12 Rapeseed 33.28 0.68 Sunflower 25.83 0.53 Oil Palm 14.14 0.29 Coconut 9.76 0.2 Other Oil Seeds 57.8 1.17 Malaysian Palm Oil 5.07 0.1 5.25 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 0.1 percent Source: FAO, Oil World (2012), MPOB (2012)
SCARCITY OF LAND EXPANSION VS PRODUCTIVITY 4.73 0.40 0.58 0.73 Higher palm oil yields a solution to land scarcity Soybean Sunflower Rapeseed Oil Palm Oil Crop Production (Mn T) % of Total Production Average Oil Yield (t/ha/year) Total Area (Mn Ha) % Area Soybean 41.75 22.54 0.40 103.88 40.26 Sunflower 14.92 8.06 0.58 25.83 10.01 Rapeseed 24.21 13.07 0.73 33.28 12.90 Oil Palm 1 66.96 36.15 4.73 14.14 5.48 Total 2 160.21 258.03 Note: 1 for palm oil and palm kernel oil 2 for 7 major oils (groundnut, coconut, cottonseed and above oils) Source: Oil World, Dec 2012
The FAO Food Price For 2012 as a whole, the Index averaged 212, 7.0 percent less than in 2011, with the sharpest declines registered by sugar(17.1 percent), dairy products (14.5 percent) and oils (10.7 percent). The 2012 price falls were much more modest for cereals (2.4 percent) and meat (1.1 percent). The FAO Oils/Fats Price Index For 2012 as a whole, the index averaged 225, which compares with 252 in 2011. The main reason for the fall in December is the continued build-up of large global inventories of palm oil as abundant production in Southeast Asia coincided with a protracted weakness of import demand. Source: http://www.fao.org/worldfoodsituation/wfs-home/foodpricesindex/en/
World s Fastest Growing Economies
Oil palm is the most efficient, effective and highest yielding among all vegetable oils produced Million ha / Million MT 120 100 80 103.88 60 52.81 40 20 14.142 25.83 14.92 33.28 24.21 41.75 0 Palm oil Sunflower oil Rapeseed oil Soybean Oil Land Area (mil ha) Production (mil MT) Source: Oil World, December 2012
MALAYSIAN PALM OIL EXPORTS 18,500,000 2008-2012 18,000,000 17,500,000 17,000,000 (MT) 16,500,000 16,000,000 15,500,000 15,000,000 14,500,000 14,000,000 2008 2009 2010 2011 2012 (MT) 15,412,512 15,880,744 16,664,068 17,993,265 17,575,486
MALAYSIA PALM OIL MONTHLY PRODUCTION, EXPORT & END STOCK 2011-2013 (MAY) 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 500,000 0 Source : MPOB Data Jan '2011 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan '2012 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan '2013 Feb Mar Apr May Stock Export Prod
MYANMAR OILS & FATS SITUATION Year 2007-2012 Consumption ( 000 MT) Production ( 000 MT) Import ( 000 MT) 2007 878 519 360 2008 880 497 358 2009 852 504 333 2010 896 526 376 2011 930 540 369 2012 945 544 402
MYANMAR OILS & FATS CONSUMPTION 2007-2012 ( 000 MT) Palm Oil Sesame Oil Groundnut Oil Sunflower Oil Soybean Oil 2007 357 182 167 126 29 2008 374 176 155 126 31 2009 345 182 146 126 32 2010 370 184 147 126 33 2011 391 186 145 126 34 2012 400 190 147 126 33
MYANMAR OILS & FATS CONSUMPTION, PRODUCTION& 1000 IMPORT 2007-2012 ( 000 MT) 450 900 800 700 600 500 400 300 200 100 0 2007 2008 2009 2010 2011 2012 Consumption Production Import 400 350 300 250 200 150 100 50 0
PALM OIL AND HEALTH THE FACTS
Areas of Opportunities for Malaysian Palm Oil A MALAYSIAN PRODUCT INNOVATION
Innovation comes in many forms and all shapes and sizes! The practice of frying foods to increase palatability and increase consumer appreciation is rated among the top 20 innovations in the food industry National Academy of Science, Royal Society, United Kingdom, Sept.
Fatty Acid Profile & Oxidative Stability Palm AOM 50 51 38 10 Lard AOM 25 43 47 9 1 Cotton AOM 25 27 18 54 Soybean AOM 15 15 23 54 8 Com AOM 25 14 28 57 1 Sunflower AOM 14 13 15 71 1 Canola AOM 18 7 62 21 10 Low Lin canolca (C5) AOM 30 7 62 26 3.5 Low lin Soy AOM 20 16 26 55 3 Natreon Sun AOM 53 8 87 4 Natreon Canola AOM 42 7 72 18 2 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Source: Sats Oleic 18:1 Linoleic 18:2 Linolenic 18:3
Talking Points for Slide 2: A variety of commercially available oils were evaluated for their oxidative stability. Palm olein is featured as the oil with the highest oxidative stability (AOM 50). An animal fat such as lard, although has somewhat similar fatty acid composition has only half the oxidative stability (AOM 25). High oleic acid varieties which are mostly GMO oils, can have high oxidative stability but their costs may be prohibitive for many applications. The possibility of blended oils must thus be explored and we are reminded by the wisdom of a senior US scientist, Dr. Gary List: (see next slide)
OXIDATIVE STABILITY OF OILS PV or O2 uptake 90 80 70 Lard Soya bean Palm Olein 60 50 40 30 20 10 10 hrs. 0 0 hrs. 0 hrs. 10 hrs. 15 hrs. 20 hrs. 25 hrs. 30 hrs. 40 hrs. 45 hrs. 50 hrs. Time taken for Peak Peroxide Development An animal fat such as lard, despite low linoleic acid has limited frying capabilities. Palm olein is highly stable and a blend of olein with soybean oil may help provide better frying characteristics and consumer acceptance.
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 % 0 0.02 235 50 0.2 Foam Index * 82 0.28 229 102 12.6 10.2 0 0.03 222 49 0.4 82 0.32 182 72 6.3 9.4 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.
PALM OIL FRACTIONS WITH DIFFERENT IODINE VALUE RANGES FOR FOODS Palm Oil IV 51-53 Olein IV 57-59 Hard Stearin IV 32-36 Super Olein IV 64-66 Soft PMF IV 42-48 Soft Stearin IV 40-42 Super Stearin IV 17-21 Top Olein IV 70-72 Hard PMF IV 32-36 Various tailor made fractions from palm are ideal for direct applications or as blended products throughout the food and frying industries.
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
SUBJECT CHARACTERISTICS Subjects characteristics Females (n=133) Males (n=73) Mean ± SD Mean ± SD Age (yr) 41.35 ± 12.31 39.70 ± 12.676 Weight (kg) 58.76 ± 10.59 68.70 ± 13.39 Height (cm) 156.32 ± 6.1 165.57± 20.0 BMI (kg/m 2 ) 24.36 ± 5.08 24.17 ± 4.19 Waist Circumference (cm) 79.4 ± 11.17 84.60 ±12.99 Body Fat (%) 32.89 ± 6.13 24.68±6.12 Sundram et al. 2013
% DISTRIBUTION AND USE OF COOKING OIL IN DAILY DIET Rice Bran Oil, 0.6 Canola, 0.6 Corn, 3.6 Sunflower, soya, etc., 13% Olive, 0.6 Canola Palm, 81.7% Corn Olive Palm Rice Bran Oil Sunflower Sundram et al. 2013
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!
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 ParRcle Size unit Palm Oil Group Other PUFA Oils P value Total LDL nmol/l 1131±374 1116±416 NS Large LDL nmol/l 181±87 181±121 NS Medium LDL nmol/l 542±249 577±249 NS Small LDL nmol/l 407±340 357±363 NS Total HDL µmol/l 31±5 29±3 p=0.04 Small HDL µmol/l 16±5 13±4 p=0.01 Sundram et al. 2013
CORRELATIONS: CARBOHYDRATE INTAKE AND LIPOPROTEIN PARTICLE SIZE r-value p-value Total LDL 0.206 0.025 Large LDL 0.056 0.547 Medium LDL - 0.171 0.062 Small LDL 0.314 0.001 In our regular diet, it is the carbohydrate content rather than fats that trigger adverse outcomes for LDL particles and coronary heart disease. Sundram et al. 2013
CORRELATIONS: FAT INTAKE (PRIMARILY PALM OIL) AND LDL PARTICLE SIZE Total LDL 0.053 NS Large LDL -0.044 NS Medium LDL -0.185 0.05 Small LDL 0.188 NS Fat consumption is the form of palm oil had no adverse outcomes on LDL particles after >20 years consumption Sundram et al. 2013
CONCLUSIONS Malaysia will be the source of affordable, healthy and sustainable supply of oils & fats in Myanmar Solution Provider: Consumers get strategic solutions from palm oil: food security, transfree products and competitive prices.
CONCLUSIONS Dominance of Palm Oil Increasing: Palm oil continues to be an attractive long term commodity for producers and consumers. Investment in oil palm cultivation should continue in the long term. Solution Provider: Consumers get strategic solutions from palm oil: food security, transfree products and competitive prices.
CONCLUSIONS In terms of Myanmar, foreign exchange can be saved by using palm oil as it is cheaper than other edible oils At current price, palm oil is USD250/MT cheaper than soybean oil Consumers get strategic solutions from palm oil: food security, transfree products and competitive prices.
Palm oil is:- CONCLUSIONS
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