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By: Msuhaili MPOC

Address: Guzel Konutlar Sitesi, Dilek Apartment Daire 3, Balmumcu, Besiktas - Istanbul, Turkey Tel : +90 212 2668234 / 35 Fax : +90 212 2668236 - See more at: http://www.mpocistanbul.com

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• Established – March 2009

• Istanbul Office covers 14 countries:

Turkey, Armenia, Azerbaijan, Bahrain, Georgia, Iran, Iraq, Jordan, Kuwait, Oman, Qatar, Saudi Arabia, UAE and Yemen.

• To promote the market expansion of Malaysian palm oil and its products by enhancing the image of palm oil and creating better acceptance of palm oil through awareness of various technological and economic advantages (techno-economic advantages) and environmental sustainability.

Middle East, East of Suez (EOS): 2013 Oils & Fats Overview • EOS consumed about 7 million MT and imported

about 6.5 million MT or 92% of oils and fats in 2013. Produced 2.42 million MT and Exported 1.8 million MT.

• With the population of 282 million peoples, EOS Caput use recorded at 24.7 Kg per head, lower by 2 Kg of World average of oils and fats Caput use.

• 86% of the total oils & fats imported by 5 key countries which are Iran, Turkey, Iraq, Saudi and UAE .

• Big Caput use came from Kuwait, Turkey and UAE

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EOS: Overall Import Trends Iran & Turkey are the key importing countries for this sub-region

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11.83 13.49

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Oils & Fats Imports Vs Caput Use

2011 2012 2013 2014E CAPUT Source: Oil World

Turkey is the second largest oils & Fats importing country for EOS region

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• Turkey has more than 32 kg of Caput use, 5 kg more than the average of world Caput use. This is because huge amount of vegetable oils based processed products exported to neighboring countries such as Iraq, Georgia, Romania, Syria and EU countries.

• Last year, Turkey exported around 700 thousand MT of oils & fats, especially locally produced sunflower oil to Iraq at some 400 thousand MT.

• Non of palm oil re-exported due to high requirement for local industries.

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• Turkey has a high market potential as the Linear (consumption) growth line narrowing the gap with population growth line. This shows the increasing Caput use of oils & fats for Turkey market.

• Growth of consumption registered at 2.42% CAGR and population at 1.32% CAGR 20 years.

• Total consumption estimated to be around 2.475 million MT for 2014. 7

Turkey still need to import more than 1.5 million tonnes of oils & Fats a year

• Local production of oils and fats in Turkey covered around 66% of the consumption. Based on this ratio, with expected consumption for 2014 of 2.475 million MT, local production is forecasted to be around 1.647 million tonnes in 2014.

• Imports of oils and fats by this country in 2014 is forecasted to some 1.558 million tonnes

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Imports of Palm Oil showed a substantial increase in 2013, Surpassed the highest record in 2006.

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Sunflower and Cotton are important crops in Turkey but still to import other oils especially palm oil

• For 12/13 season, Turkey produced 1.1 million tonnes of Sunflower seed (458,000 tonnes sunflower oil) and 1.18 million tonnes of cotton seed (185,000 tonnes cotton oil).

2011 2012 2013

Production Consumption Import Production Consumption Import Production Consumption Import

Palm Oil 0 426 429 0 447 437 0 563 563

Sunflower Oil 698 756 470 677 848 743 717 839 656

Soybean Oil 119 116 3 102 100 0 97 89 3

Rapeseed Oil 124 123 2 81 80 0 89 89 0

Corn Oil 40 59 41 43 48 31 45 74 58

Cotton Oil 167 159 0 156 156 0 165 168 0

Olive Oil 184 133 0 206 148 0 209 146 0

Other Oils & Fats 174 402 234 188 424 240 202 422 221

TOTAL 1506 2174 1179 1452 2251 1451 1524 2390 1501

Source: Oil World

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Non of Palm oil use for liquid oil and Sunflower oil has the biggest share

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Turkey: 2013 Vegetable Oils Export & Consumption Export Local Consumption 000 MT Other Usage Liquid Oil Margarine Liquid Oil Margarine total Usage

Sunflower Oil 42 576 - 824 - 1,442

Soybean Oil 40 10 5 12 10 77

Corn Oil - 30 - 61 - 91

Cotton Oil 5 1 20 46 49 121

Palm Oil 149 1 120 - 428 698

Rapeseed Oil 5 - 8 40 36 89

Others 52 - - - - 52

293 618 153 983 523 2,570 Source: Vegetable Oils Association, Turkey

HIGH growth of cooking oil usage for Turkey Market.

% current value growth 2008-13 CAGR Butter 20.47 Margarine -0.60 Olive Oil 10.48

Spreadable Oils and Fats 6.06

Cooking Oils 17.18

Oils and Fats 14.01

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Source: Euromonitor

Share of Cooking Oil in Turkish Market

Type of Oils 2008 2009 2010 2011 2012 2013

Corn 14.3 9.6 5.4 6.0 4.3 3.0

Cottonseed 3.0 2.9 2.1 6.1 6.4 6.5

Sunflower 77.9 78.0 80.4 82.2 87.0 89.0

Others 4.8 9.5 12.1 5.7 2.3 1.5

Total 100.0 100.0 100.0 100.0 100.0 100.0

Source: Euromonitor

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Some of the Blended Palm Cooking Oils in the International Market

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Blended Palm Cooking oil in IRAN market, showing the advantage of using OPAQUE bottle

POPULAR “Smart Balance” Blended Palm Cooking oil in International Market, using transparent bottle.

MPOC experience with Working Group in Egypt Blended palm cooking oil increase the good attributes & Cost savings • Working group consist of:

• Food Industries Holding Company (FIHC) • General Authority of Supply Commodity (GASC)-Ministry of Supply

and Internal Trade • Egyptian Organization of Standardization and Quality (EOS) • Malaysian Palm Oil Board (MPOB) • Malaysian Palm Oil Council (MPOC)

• The working group was established to study using palm oil derivatives (palm olein IV 56 & 58 and palm super olein IV 60) in preparing edible oil blends for cooking and frying purposes according to the Egyptian standards 2142/2005.

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Study of Blended Palm Cooking Oil in Egypt

The study of blended Palm Cooking Oil done in Egypt - 2012 • Based on the study conducted by the working group,

recommends the best and suitable percentage at which palm olein fractions that can be safely used in preparing clear liquid cooking/frying oil blend without occurrence of any turbidity or solidification during winter months (5 degree Celsius) in Egypt are as follows:

• Palm Olein (IV56) at 5% + Soft oil (Soybean oil or Sunflower oil)

• Palm Olein (IV58) at 10% + Soft oil (Soybean oil or Sunflower oil)

• Palm Olein (IV60) at 15% + Soft oil (Soybean oil or Sunflower oil)

• Palm Olein (IV56, IV58, IV60) + Blended Soft Oil (Soybean Oil 25% +

Sunflower Oil 75%)

• More ratio of palm olein can be used during the summer.

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Palm Oil Share in Turkey Market

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Imports of Oils & Fats in Turkey Jan- 2013-/July 2014

Commodity Jan -July

2013

Jan- July

2014

Palm oil 400,049 388,410

Corn oil 25,285 8.207

Sunflower Oil 387,330 546,480

TOTAL 812,664 941,828 Source : Turkish Statistical Institute

Malaysian Palm Oil Vs. Indonesian Palm Oil (MT) Country Jan-July Jan-July Changes Changes Jan-Dec

2014 2013 (vol.) (%) 2013

Malaysia 170,980 150,210 20,770 13.8% 260,265

Indonesia 217,430 248,914 -31,484 -12.6% 426,525

Total 388,410 399,124 -10,714 -2.7% 686,790

MPO Share 44.0% 37.6% Source : Turkish Statistical Institute

Low percentage direct import of MPO

• Total share of Malaysian palm oil (MPO) for Turkish market for the period of Jan-July this year was 44%, an increase of 2.4% compared to previous year.

• Total imports of MPO for this period was 170,980 MT and direct imports from Malaysia was only at 40,595 MT or 24% of the total MPO imported.

• Better logistic and distribution arrangement are highly required in order to be more competitive in the market.

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MTFTA as another Driver for Malaysian Palm Oil Demand in Turkish Market • Malaysia-Turkey Free Trade Agreement (MTFTA) new tax

structure

- The Agreement finalised on 15 January 2014 - Malaysia is the first ASEAN country to sign agreement with

Turkey - MTFTA has been signed in April 2014 - Reduction of import tax for Crude Palm Oil and Refined Palm Oil - This gives another competitive advantage for MPO and increase

the share of MPO in Turkey market. - Expected to be implemented by the end of this year or beginning

of 2015.

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CONCLUSIONS Great Potential to Expand Palm Oil Market in 2015 • High population supports the Increasing demand of oils &

fats in Turkey and positive growth of palm oil imports and consumption.

• Increasing demand of palm oil in the food, Oleo-chemicals and other non-food products for local and export markets.

• High potential for palm oil to be used as blended cooking oil in Turkey

• Big potential to increase MPO market share in turkey through a better distribution arrangement and the implementation of MTFTA.

• MPOC Istanbul office will continue to support expansion of MPO market in this country and increase its competitiveness in other market as well.

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