global oils & fats outlook - -forecasts on demand...

15 Jan 2014

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Global Oils & Fats Outlook - -Forecasts on Demand & Consumption

Presentation given at POTS in Tehran on 20 Jan 2014

Thomas Mielke, Executive Director of ISTA Mielke, Oil World, Global Market Research on Oilseeds, Oils and Meals,

E-mail <[email protected]>

15 Jan 2014



§  ISTA Mielke GmbH – publisher of OIL WORLD - was founded in 1958 §  ISTA = International STatistical Agricultural Information §  Independent, not involved in trading §  Leading private authority for global research and market analyses for

oilseeds, oils & 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 on www.oilworld.de

Company Profil and Services

15 Jan 2014


January 2003 until 14 Jan 20142003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 14

200300400500600700800900

1000110012001300

Crude Palm Oil, cif Rott.10-year average (1998-2007)

Monthly Prices of Crude Palm Oil (US-$/T)Palm oil prices recovered by US $ 120 in the past 3 months until mid-Dec But declined by US $ 60 since What is the further price trend?

15 Jan 2014


Daily prices from 3 Jan 2012 until 14 Jan 2014Jan12 Mar Jun Aug Oct Jan13 Mar May Jly Sep Nov Jan14

700

800

900

1000

1100

1200

1300Daily Prices of 3 Oils (in US-$/T)

Sun oil, fob Black Sea

Soya oil, fob Arg.

Palm olein, RBD,fob Malaysia

In Iran most veg oil imports consisted of soya and sun oil In future palm oil is likely to gain market share for price and quality reasons I will highlight the fundamentals of palm oil and other veg oils and discuss price prospects

15 Jan 2014



91/92 93/94 95/96 97/98 99/00 01/02 03/04 05/06 07/08 09/10 11/12 13/140

5

10

15

20

2517 Oils & Fats: Exports of Major Countries (Mn T)

Indonesia

Argentina

U.S.A.Canada

Ukraine

Malaysia

Indonesia & Malaysia have exported 43.6 Mn T of oils & fats in 2012/13,

. . thus accounting for 58% of total world exports of all oils & fats in 2012/13.

World palm oil exports to drop in 2013/14 for first time in 16 years

15 Jan 2014


The Impact from Oilseeds

15 Jan 2014


88/89 91/92 94/95 97/98 00/01 04/05 07/08 10/11 13/14140

180

220

260

300

340

380

420

460

500Production (Mn T)Area (Mn ha)

10 Oilseeds: World Area and ProductionIn past 25 years world oilseed production more than doubled (strong demand) Rising acreage and yields About half of the acreage increased came from grains. But this shift will slow down. Agricultural land has become a limiting factor worldwide, big potential in Russia + Braz Land values more than doubled in past 6 years

15 Jan 2014


Soybeans 58%

Rapeseed 14%

Sunflowerseed 8%

Cottonseed 9%

Groundnuts 6%

Copra & Palmkernels 4%

Other 3 Oilseeds 2%

2013/14 = 497 Mn T

Other ctries 15%

EU-28 6%

C.I.S. 7%

Canada & U.S.A. 24%

Brazil 19%

Argentina 12%

China 10%

India 8%

10 Oilseeds - - 497 Mn T

Global Production of 10 Oilseeds

15 Jan 2014


Trade Flows An increasing share of global import requirements is satisfied from a declining numbers of countries Logistics getting a constraint

15 Jan 2014



89/90 92/93 95/96 98/99 01/02 04/05 07/08 10/11 13/1405

1015

202530

354045

10 OILSEEDS: Exports of Major Countries (Mn T)

U.S.A.

Oth. America

Brazil

CanadaAustralia

Ukraine

LOGISTICS ! In 13/14 USA and South America account for: - 80% of world exports of 10 oilseeds (131 Mn T) - 95% of world soybean exports (total 109 Mn T)

In 2020: Brazil + Arg will have to produce at least 162-167 Mn T of soybeans (vs 130 in 2013).

15 Jan 2014


Assuming normal weather in South America: Ample oilseed supplies ahead in 2013/14. Biggest increases in soybeans, sunflowerseed, rapeseed and palmkernels In 2013/14 world production seen surging by 28 Mn T and opening stocks up 8 Mn T, boosting world supplies by 36 Mn T - - > BEARISH !

10 OILSEEDS: World Production (Mn T)

13/14F 12/13 11/12 10/11

Avg.Change15 Yearsto 12/13

Soybeans . . . . 287.59* 267.12 240.69 264.93 +3.5%Cottonseed . . . 43.40* 45.04 47.17 43.55 +1.8%Grdnuts,shelled 28.77* 28.02 27.25 27.75 +2.1%Sunflowerseed 40.19* 35.57 39.51 33.60 +2.8%Rapeseed . . . . 69.09* 63.91 61.46 61.83 +4.5%

Sesameseed . . 3.93* 3.74 3.83 3.83 +2.3%Palmkernels . . 14.66* 13.92 13.30 12.54 +7.4%Copra . . . . . . . 5.33* 5.38 5.26 4.80 +0.4%Linseed . . . . . . 2.30* 2.01 2.13 1.82 -1.0%Castorseed . . . 1.37* 1.48 2.04 1.56 +0.7%Total. . . . . . . . 496.63* 466.19 442.64 456.20 +3.3%

15 Jan 2014


Soybean Prices Overvalued Relative to Fundamentals

Daily futures from 1 Aug 2013 until 14 Jan 2014Aug'13 Sep Oct Nov Dec Ja'14

1050

1100

1150

1200

1250

1300

1350

1400CBOT: Daily Soybean Futures (c/bu)

Jan 2014

May 2014

Nov 2014

Firmness in the nearby huge Chinese imports

US soybean exports frontloaded (84% already in Sep/Feb) US soybean stocks low

15 Jan 2014


75/76 81/82 87/88 93/94 99/00 05/06 13/140

20

40

60

80

100

120

140

160Soybean Crop Trend Since 74/75 (Mn T)

U.S.A.

Argentina, Brazil & Paraguay

Growing dependence on South America - - but supply risks owing to weather, strikes, infrastructure shortages + political issues (Argentina !) Record plantings should boost S. Amer. soybean output to a new high in early 2014 (up 14 Mn T) In 2013/14 S. American soya crop almost 70 Mn T above US crop ! Favorable crop outlook in Brazil, Paraguay & Uruguay. In Argentina renewed concern about dry weather in Jan (& Feb?)

15 Jan 2014


Limi$ng Factors – Inland Transport

In Argen(na and in Brazil truck remains the main form of transport from the farm to the port More expensive, more pollu(ng, and less efficient than barges and train

Brazil Argentina USABarges 7% 4% 61%Train 33% 13% 23%Trucks 60% 83% 16%Ave distance to Port in Km 950 300 980

Soybean Transportation Matrix

15 Jan 2014


Limi$ng Factors – Inland Transport

Bo?lenecks in Rosario area in Argen(na during April/May Roadblocks and protests further complicate inland transporta(on

Line of trucks wai$ng to unloading soybeans at Brazil’s ports created long wai(ng (me in March 2013 U$S/ton 152 freight cost to transport beans from Mato Grosso to Paranaguá

15 Jan 2014


EU-28C.I.S.

CanUSA

ArgBra

AustraliaIndia

China

-4

-2

0

2

4

6

8Annual Change from 2012/13 ( in Mn T)

10 Oilseeds: Estimated Production Change in 2013/14Significant improvement in production in most countries in 2013/14 Big increases in Argentina, Brazil and the C.I.S. India: Higher oilseed output in 2013/14; slowdown of veg. oil import needs; but some crop damage Major exception is China. Much higher import needs.

15 Jan 2014


92/93 95/96 98/99 01/02 04/05 07/08 10/11 13/140

10

20

30

40

50

60

70

CHINA: Imports of Oilseeds and Oils & Fats

Mn T

Oils & Fats

Oilseeds

CHINA: Rapidly rising import requirements Mainly of soybeans, but also of rapeseed and other agri commodities Big jump in oilseed imports by 9-10 Mn T is likely in 2013/14 China building stocks of oilseeds, oils & grains

15 Jan 2014


O c t o b e r / S e p t e m b e r90/91

91/9292/93

93/9494/95

95/9696/97

97/9898/99

99/00 00/01

01/02 02/03

03/04 04/05

05/06 06/07

07/08 08/09

09/1010/11

11/1212/13

13/14F0

10

20

30

40

50

60

70

ChinaRest of world

Imports of Soybeans (Mn T)CHINA: to account for 64% of world soybean imports in 2013/14 Longer term: China set to import 90 Mn T of soybeans in 2020

15 Jan 2014


Rapeseed and Canola

15 Jan 2014


93/9494/95

95/9696/97

97/9898/99

99/0000/01

01/02 02/03

03/04 04/05

05/06 06/07

07/08 08/09

09/10 10/11

11/1212/13

13/14

152025303540455055606570

World Production (Mn T) and Area (Mn ha)RAPESEED & CANOLA

Production

Area

World production of rapeseed & canola set to increase by 5.2 Mn T to a record 69.1 Mn T Biggest jump in Canada 18.0 (vs 14.0) Severe shortage of logistics in Canada

15 Jan 2014


Prices from 1 Jan 2012 until 14 Jan 2014Jan12 Mar May Jly Sep Nov Jan13 Mar May Jly Sep Jan14360

385410435460485510535560585610635660685

Euronext RapeseedWinnipeg Canola

Nearest Forward Position (US-$/T)Daily Rapeseed & Canola Futures

Considerable price pressure in Canadian canola, due to the huge crop and the prospects of record Can. stocks of 2.5-3.0 Mn T at the end of the 2013/14 season Logistical bottlenecks Exporters hesitant to sell (lack of rail cars) Farmers the big losers

15 Jan 2014


93/9494/95

95/9696/97

97/9898/99

99/0000/01

01/02 02/03

03/04 04/05

05/06 06/07

07/08 08/09

09/10 10/11

11/1212/13

13/14

1618202224262830323436384042

World Production (Mn T) and Area (Mn ha)SUNFLOWERSEED

Production

Area

In 2013/14 record crops of sunflowerseed

EU 8.6 Mn T (vs 7.1) Russia 9.5 Mn T (vs 8.0) Ukraine 10.0 Mn (vs 8.4) §  World output up 4.7

Mn T - - creating price discounts

15 Jan 2014


95/96 97/98 99/00 01/02 03/04 05/06 07/08 09/1011/12 13/140

1,5

3

4,5

6

7,5

9

EU-28RussiaUkraineArgentina

October / SeptemberSunseed: Crushings in Key Countries (Mn T)

§  Argentine sunflowerseed crop only at 2.3-2.4 Mn T in early 2014

§  Argentine crush and sun oil export supplies much smaller than expected

15 Jan 2014


Daily prices from 3 Jan 2012 until 14 Jan 2014Jan12 Mar Jun Aug Oct Jan13 Mar May Jly Sep Nov Jan14

700

800

900

1000

1100

1200

1300Daily Prices of 3 Oils (in US-$/T)

Sun oil, fob Black Sea

Soya oil, fob Arg.

Palm olein, RBD,fob Malaysia

§  Black Sea sun oil prices have fallen below soya oil

§  World sun oil output

+1.6 Mn T §  Export supplies +1.2

Mn T in 2013/14

15 Jan 2014


99/00 01/02 03/04 05/06 07/08 09/10 11/12 13/140

200

400

600

800

1000

1200

1400Sunflower Oil Imports

China

IndiaAlgeria,Egypt,Morocco

EU-281000 T

Imports of sun oil in 13/14 in 1000 T:

§  India : 1100 (vs 940) §  China : 500 (vs 342) §  EU-28 : 920 (vs 960) §  Turkey: 670 (vs 650) §  Iran : 250 (vs 180)

15 Jan 2014


The Impacts from Oilmeals

15 Jan 2014


From Oct 1997 until mid-Jan 2014'97'98 '99 '00 '01 '02 '03 '04 '05 '06'07 '08 '09 '10 '11 12 '13

100150200250300350400450500550600650700

with 10-year average Jan 1998 - Dec 2007 (in US-$/T)Monthly Prices of Soya Meal, 48%, Brazil

Average 1998-2007: US-$ 220

Soya pellets, 48%, Brazil, cif Rott.

15 Jan 2014


92/93 95/96 98/99 01/02 04/05 07/08 10/11 13/140

50

100

150

200

250

300

350

400

450

-10

-5

0

5

10

15

20

25

30

35Total and Annual Change (Mn T)

10 Oilseeds : World Crushings

World Crushings

Annual change

15 Jan 2014


95/96 97/98 99/00 01/02 03/04 05/06 07/08 09/10 11/12 13/14708090

10011012013014015016017018019020012 Oilmeals: World Production (Mn T)

Other 11 oilmeals

Soyameal

Soya meal is the most dominant oilmeal with production set to increase by 9 Mn T in 2013/14

15 Jan 2014


'90'91

'92'93

'94'95

'96'97

'98'99

'00'01

'02'03

'04'05

'06'07

'08'09

'10'11

'12'13

'14 2020

00.5

11.5

22.5

33.5

44.5

55.5

66.5

Production Growing 7-10% AnnuallyINDIA: Production of Poultry Meat

Mn T

15 Jan 2014


The Outlook for Oils & Fats

15 Jan 2014


Soya Oil 22,5%

Palm Oil 29,8%

Rape Oil 13,0%

Sun Oil 7,7%

PKO&CNO 5,0%

Others/An.Fats 22,0%

2013/14 - - 196.3 Mn T

Soya Oil 20,1%

Palm Oil 14,2%

Rape Oil 11,4%

Sun Oil 9,9%

PKO&CNO 5,2%

Others/An.Fats 39,2%

1991/92 - - 83.5 Mn TWorld Production of 17 Oils & Fats

15 Jan 2014


91/92 93/94 95/96 97/98 99/00 01/02 03/04 05/06 07/08 09/10 11/12 13/1405

1015202530354045505560

17 Oils & Fats: World Production (Mn T)

Sun oil

Rape oil

Soya oil

Palm oil

9 Other oils4 Animal Fats

Palm oil has become the most important veg. oil worldwide Palm oil production was boosted by more than 4 times in the past 20 years from 14 Mn T in 1993/94 and is estimated to reach 58.5 Mn T in 2013/14, Thereof: Malaysia 19.7 Mn and Indonesia 29.8 Mn T

15 Jan 2014


World consumption of all oils & fats more than doubled in the latest 20 years to 188 Mn T in 12/13 Palm oil and Pkernel oil: annual growth rates were more than double of those of other oils & fats. Today both oils account worldwide for : - - 33% of consumption - - 63% of exports

98/99 01/02 04/05 07/08 10/11 13/140

50

100

150

200palm oil + palmkernel oil15 other oils & fats

World Consumption of 17 Oils & Fats

Mn T

Growing Dominance of Palm Oil & Palmkernel Oil Worldwide

15 Jan 2014


3,400 Ha of UP’s advanced planting materials yielded an average of 7.6 Tonnes of CPO per Ha

15 Jan 2014


3,8

4,5

0,53 0,51

1,31,6

Palm oil Soya oil Rape oil

0

1

2

3

4

5Vegetable Oil Output per ha

Indonesia

Malaysia

U.S.A. Brazil

EU

T/ha

Germany

Source: ISTA Mielke GmbH, OIL WORLD

Palm oil yields per ha are much above soya and rape oils

15 Jan 2014


O c t o b e r / S e p t e m b e r 99/00 01/02 03/04 05/06 07/08 09/10 11/12 13/14

-1

0

1

2

3

4

5Annual Change (Mn T)

Palm Oil : World Production Global Palm Oil Outlook in 2013/14 (in Mn T): Production +2.65 (vs +3.45) Op.stocks -0.67 (vs +1.26) Supplies +1.98 (vs +4.71)

15 Jan 2014


O c t o b e r / S e p t e m b e r 03/04 05/06 07/08 09/10 11/12 13/14

0

2

4

6

8

10

12

14Production Consumption

Growth Rates in % Palm Oil : World Output and Consumption

15 Jan 2014


Rising Dependence on Palm Oil

97/98 99/00 01/02 03/04 05/06 07/08 09/10 11/12 13/140

5

10

15

20

25

30

35

40

45Soy, Rape, Sun Oils4 Animal FatsPalm Oil 9 Other

World Exports in Mn T17 Oils & Fats

1997/98 - 2012/13: §  Palm oil exports (blue line)

almost quadrupled §  Exports of all 16 other

oils & fats + 48%

In Oct/Sept 2013/14: §  Palm oil exports (blue line)

are set for the 1st year-on-year decline in 16 years

§  Combined exports of soya, sun & rapeseed oils (red) are likely to reach a record

15 Jan 2014



2011/12 2012/13 2013/14A/J J/S O/D J/M A/J J/S O/D J/M A/J J/S O/D J/M

-1000

-500

0

500

1000

1500Change from year ago (in 1000 T)

PALM OIL: Quarterly World Imports

15 Jan 2014



91/9293/94

95/9697/98

99/00 01/02

03/04 05/06

07/08 09/10

11/1213/14

0

10

20

30

40

50ChinaIndiaEU-28

in % of 17 Oils & FatsPALM OIL: Market Share in Sel. Countries

15 Jan 2014



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% §  In 2010: 46.1 Mn T or 27% (only 6% of area)

§  In 2011: 50.8 Mn T or 28% (57% of exports) §  In 2012: 53.7 Mn T (plus 5.9 Mn T of Palmkern oil) §  In 2013: 56.1 Mn T §  In 2020 at least 78 Mn T of palm oil required

15 Jan 2014


Price Prospects

15 Jan 2014


Prices from 1 June 2013 until 10 Jan 2014Jun Jly Aug Sep Oct Nov Dec Jan

700

750

800

850

900

950Daily Prices of Crude Palm Oil & Brent Oil (US-$/T)

Brent Crude Oil

Palm Oil, cif R’dam

Palm oil generated huge demand in energy sector

Biofuel use of palm oil outside the mandates comes to standstill

15 Jan 2014


89/90 92/93 95/96 98/99 01/02 04/05 07/08 10/11 13/14 0

153045607590

105120135150165180195

biofuel food and other

Total Usage in Mn T17 Oils & Fats : World Consumption

26 Mn T for biofuels à 13% of total consumption

Total oils/fats use: India 20.5 Mn T China 36.2 Mn T EU 29.7 Mn T US 18.5 Mn T .. World 194.8 Mn T

15 Jan 2014


In Mn T 13/14 12/13 11/12 10/11 China +1.00 +1.10 +1.04 +1.09

India +0.90 +0.87 +0.75 +0.48

EU -0.30 +0.26 -0.33 -0.87 U.S.A. +0.10 +0.49 +1.19 +0.90

Argentina +0.10 -0.93 +0.53 +0.55

Brazil +0.76 +0.04 +0.15 +0.60

Indonesia +1.50 +1.00 +0.99 +1.02

Others +2.34 +2.39 +2.47 +2.49

World +6.40 +5.22 +6.79 +6.26 CPO, $/T 900-950 835 1053 1150

17 Oils & Fats: Consumption Growth

2014 2013

10% 8%

7% 5%

10%

Rising biodiesel mandates

15 Jan 2014


J a n u a r y 1 2010 2011 2012 2013 2014

012345678 Indo PO

Mal POUS SBO

Veg. Oil Stocks in Key Countries

● Stocks of palm oil in Malaysia/Indonesia and of soya oil in US reduced sharply in 2013... ● But China replenished veg. oil stocks – probably curbing Chinese import requirements in 2013/14...

15 Jan 2014


99/00 01/02 03/04 05/06 07/08 09/10 11/12 13/148

10

12

14

16

18

20

22 Palm Oil Sun OilSoya Oil 17 Oils/Fats

Annual Stocks / Usage Ratios (%)17 OILS & FATS

15 Jan 2014


A/J11 O/D11 A/J12 O/D12 A/J13 O/D13700

800

900

1000

1100

1200

1300

1400

1500

SBO fob ArgSFO fob BSRSO DutchCPO cif Rdam

4 Veg. Oils: Quarterly Average PricesUS-$/T

Price lows already established by the four major veg. oils. Bearish oilseed supply outlook now largely discounted?

15 Jan 2014


A/J11 O/D11 A/J12 O/D12 A/J13 O/D13 J/J14700

800

900

1000

1100

1200

1300

1400

1500

SBO fob ArgSFO fob BSRSO DutchCPO cif Rdam

4 Veg. Oils: Quarterly Average PricesUS-$/T $/T vs OD Av. Jan/June14 O/D13 J/S13

SBO fob Arg

+4% 960* 930-990 917 883

CPO cif Rdm

+5% 945* 920-970 897 827

SFO fob BS

+3% 920* 890-950 893 940

RSO Dutch

+2% 1040* 1020-1060 1016 1001

15 Jan 2014


Monthly prices from Jan 2011 until 12 Dec 2013Jan'11 Jan'12 Jan'13 Dec

500

1000

1500

2000

2500

Palm oil crude, cif N.W. EurPalm olein RBD, Mal, fobPalmkern oil,Mal/Indo,cif RottCoconut oil,Phil/Indo,cif Rott

Monthly Prices of 4 Veg. Oils (US-$/T)

Widening premium of lauric oil prices

15 Jan 2014


§  First of all, there is a volume problem that needs to be solved globally in soybeans and products, other oilseeds, oils, meals and grains

§  Limitation of land and water §  More focus to raise yields. (They stayed behind

expectations in the past 10 years.) GMO needed §  A small numbers of countries provide supplies §  Higher investments to improve logistics §  Oil and meal demand strong (food + biofuels)

In the longer term

15 Jan 2014


Monthly prices from Jan 1972 until Dec 201372 77 82 87 92 97 02 07 13

0

200

400

600

800

1000

1200

1400

1600Palm oil, crude cif Rott.Soya oil, Dutch fob ex-mill

Soya Oil & Palm Oil: Monthly Prices (US-$/MT)

New price range

15 Jan 2014


Thank You for Your Kind Attention !

[email protected]

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.

15 Jan 2014



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