complementing pakistan’s oils and fats...
TRANSCRIPT
Malaysian Palm Oil Complementing Pakistan’s Oils and Fats
Needs
Tan Sri Datuk Dr. Yusof Basiron
Chief Executive Officer MALAYSIAN PALM OIL COUNCIL (MPOC)
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
1.Global Oils and Fats Scenario
Oils and Fats Production (1990 – 2012)
Others, 47
Palm Oil, 13
Soyabean Oil, 20
Rapeseed Oil, 10
Sunflower Oil, 10
Others, 27
Palm Oil, 29
Soyabean Oil, 23
Rapeseed Oil,
13
Sunflower Oil,
8
1990 Production : 80.91 million MT
2012 Production : 183.61 million MT
Source: Oil World
• Growth in population , income growth, low per caput consumption level
• 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
1990 Exports : 23.1 million MT
2012 Exports :72.34 million MT
Oils and Fats Exports (1990 – 2012)
Source: Oil World
Average Annual Growth in World Vegetable Oil Production (1993 – 2012)
0
10000
20000
30000
40000
50000
60000
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Palm Oil Rapeseed Oil Soybean Oil Sunflower Oil Coconut Oil Palm Kernel Oil
‘00
0 M
T
Average Annual Growth (1993 – 2013) 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%)
Source: Oil World
World’s Growing Dependence on Palm Oil Will Boost Demand Further in the Future (Exports)
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
Palm Oil Sunflower, Soybean, Rapeseed Oil
‘00
0 M
T
Source: Oil World
Despite increase in annual production, overall global oils and fats production is showing a declining y-o-y growth trend from 1994 to 2012
Y-o-Y Growth Change of Oils and Fats Production
0
1
2
3
4
5
6
7
8
9
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
10000
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
Volume Change Percent Change Linear (Percent Change)
‘000
MT
%
chan
ge
Source: Oil World
Y-o-Y Agricultural Area Growth Change
-0.4000%
-0.3000%
-0.2000%
-0.1000%
0.0000%
0.1000%
0.2000%
0.3000%
0.4000%
0.5000%
Ch
ange
Pe
rce
nta
ge
Source: FAO
‘00
0 M
T
Linear (Global Oils and Fats Production)
Source: Oil World
Oils and Fats Consumption of Developed VS Developing Countries
Developed Countries,
33,719 t MT,
(42%)
Developing
Countries, 45,743 t MT
(58%)
1993
Developed Countries,
54808 t MT, (30%)
Developing Countries,
127,490 t MT, (70%)
2012
Source: Oil World
Net Importing Countries of Oils and Fats
0
10000
20000
30000
40000
50000
60000
2000 2002 2004 2006 2008 2010 2012
Others Bangladesh Pakistan India EU27 China
‘00
0 M
T
Source: Oil World
Growth in World Population / Food Security
Russia
Philippines
Canada
Ukraine
Brazil
Argentina
Malaysia
Indonesia
Taiwan
Nigeria
South Korea
South Africa
Turkey
Japan
Egypt
Mexico
Iran
Bangladesh
Pakistan
North Africa
India
EU-27
China
-15000 -10000 -5000 0 5000 10000 15000 20000 25000
Net Importers
Net Exporters
FAO estimates that by 2050, rising population and incomes will require 70 percent in crease in global food production
› Net exporters of oils and fats – Asia Pacific (palm oil) & Americas (soybean) › The rest of the countries are net importers
Source: Oil World
2.Role of Palm Oil in Global Scenario
Scarcity of Arable Land
Year World’s population (bil)
Arable land per capita
(x10-3km2)
Arable land per capita
(ha)
1922 1975 2005 2030 2042
2.0 4.0 6.6 8.0 9.0
7.50 3.75 2.27 1.88 1.67
0.75 0.38 0.23 0.19 0.17
• World population increasing • Arable land resource decreasing
Source: Freeworld Academy & University of Michigan
Need to Use Land Wisely
“The FAO has called upon governments to pay urgent attention to the needs of agriculture and to increase investments in agricultural practices.”Sustainability Team Discussion Paper- March 2010- Dexia Asset Management
Distribution of Agricultural Area
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).
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 16.8 1,884 316 Latin America and the
Caribbean 8.2 550 45
South Asia 40.4 1,476 596 Sub-Saharan Africa 50.9 763 388
Total Developing
countries 28.8 4673 1345
Europe and Central
Asia 0.04 473 17
Middle East and North
Africa 0.04 305 11
Total 5451 1372 Source: See World Bank PovcalNet "Replicate the World Bank's Regional Aggregation" at
http://iresearch.worldbank.org/PovcalNet/povDuplic.html (accessed May 7, 2010).
Growth in World Population / Food Security
• 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
Growth in World Population / Food Security
The world population is projected to grow from 7 billion in 2011 to 9 billion by 2043. Food production must meet this rate of increase. This alone is sufficient to exert pressure on commodity prices
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
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 1.18
Malaysian Palm Oil 4.32 0.09 Source: FAO (2011), Oil World, MPOB -2012
› 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 0.09 percent
Scarcity of Land – Expansion VS Productivity
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 Palm1 66.96 36.15 4.73 14.14 5.48
Total2 160.21 258.03
Soybean Sunflower Rapeseed Oil Palm
0.40 0.58 0.73
4.73
Higher palm oil yields – a solution to
land scarcity
Source: Oil World, Dec 2012
Note: 1 for palm oil and palm kernel oil 2 for 7 major oils (groundnut, coconut, cottonseed and above oils)
3.Pakistan Oils and Fats Scenario
Total Disappearance of Oils and Fats
2008 2009 2010 2011 2012
Oil from Local Oilseed Crops
833,000 778,000 662,000 696,000 636,000
Imported Oils & Fats
1,631,094 1,924,697 2,058,252 2,125,427 2,073,212
Oil available from Imported Oilseeds
180,000 390,433 453,301 376,324 287,746
Butterfat* 80,000 80,000 80,000 80,000 100,000
TOTAL 2,724,094 3,173,130 3,253,553 3,277,751 3,096,958
Source: Economic Survey & Port Data from Shipping Agents
Total Disappearance of Oils and Fats
Source: Economic Survey & Port Data from Shipping Agents
Indigenous Oilseed Production
2007-08 2008-09 2009-10 2010-11 2011-12
Cottonseed 428,000 362,000 389,000 352,000 385,000
Rapeseed 58,000 62,000 51,000 50,000 61,000
Sunflower 264,000 227,000 195,000 244,000 179,000
Canola 83,000 33,000 27,000 50,000 11,000
TOTAL (MT) 833,000 684,000 662,000 696,000 636,000
Source: Economic Survey of Pakistan
Imports of Oils & Fats
2009 2010 2011 2012
CPO 453,926 491,899 749,000 428,353
RBD Palm Oil 733,085 184,202 263,444 749,513
RBD Palm Olein 556,214 1,211,368 970,746 752,603
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
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
Malaysia – Indonesia Market Share Analysis Chart year 2008 – 2012
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
1,800,000
2,000,000
2008 2009 2010 2011 2012
MPO – IPO market share from 2008 – 2012
Malaysia
Indonesia
Source: Port Data from Shipping Agents
Commodity
Jan -
October
2012
Jan -
October
2013
Changes
Vol. (Tones)
Changes
%
Crude Palm Oil 359,771 270,618 (89,153) (24.78)
Palm Oil 695,314 867,821 172,507 24.81
Palm Olein 689,000 901,220 212,220 30.80
Palm Fats 63,653 65,693 2,039 3.20
Soybean oil 40,500 30,664 (9,836) (24.29)
Tallow 32,591 15,264 (17,326) (53.16)
Total 1,880,829 2,151,280 270,452 14.38
Pakistan Year to Date Import vis-à-vis 2012
Source: Shipping Agents’ Vessel Reports
Month
Malaysia Indonesia
Malaysian
Share RBD Palm
Oil
RBD Palm
Olein
Crude
Palm Oil Others
RBD Palm
Oil
RBD Palm
Olein
Crude Palm
Oil Others
January 11,950 105,876 50,499 0 53,000 1,000 15,500 5,949 69.05% February 4,499 63,647 23,600 500 74,579 12,000 27,990 6,192 43.31% March 8,999 65,477 52,331 0 139,368 2,000 10,500 5,348 44.65% April 9,500 37,499 14,999 500 8,000 0 0 0 88.65% May 23,994 61,584 3,000 0 15,750 0 0 6,900 79.64% June 10,999 84,555 15,000 4,001 38,248 9,249 0 8,249 67.27% July 44,749 98,229 11,000 0 71,699 0 0 0 68.23% August 38,994 63,501 23,000 1,500 49,507 1,000 0 10,814 67.44%
September 29,750 57,987 0 2,349 35,937 20,999 0 5,794 58.95%
October 26,743 117,384 17,000 0 65,574 8,750 0 2,543 67.70%
November 7,297 88,493 6,200 1 98,685 1,990 0 5,055 49.10%
December
TOTAL 1,287,186 818,167 61.14%
Malaysian/Indonesian Import Comparison 2013
Source: Shipping Agents’ Vessel Reports
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 2013
1,186,280 1,362,678 1,848,000 2,096,000
4.Why Malaysian Palm Oil
Why MPO?
1. Well established supply chain facilities in Pakistan
1a. Well-established supply chain facilities
MAPAK QASIM BULKERS (PVT.) LTD HANDLING AND STORAGE TERMINAL (A FELDA/KLKEPONG-WESTBURY VENTURE)
1b. Well-established supply chain facilities
MAPAK EDIBLE OILS (PVT.) LTD EDIBLE OIL REFINERY (A FELDA/KLK/IOI-WESTBURY VENTURE)
1c. Well-established supply chain facilities
FWQ ENTERPRISES (PVT.) LIMITED LIQUID CARGO TERMINAL DEDICATED EDIBLE OIL JETTY
(A FELDA-WESTBURY VENTURE)
Why MPO?
2. Global Expansion and Well-Established Networking by Malaysian
Companies
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
Why MPO?
3. Diversified Activities and Application for Long Term Supply
Assurance
Malaysia Experiences in Global Marketing - Opportunities and Applications
Upstream Midstream Downstream
Processing Consumer Products
ACTIVITIES
• Seed production • Nursery • Cultivation • Harvesting • Milling
• Trading • Crude palm oil bulking
• Refining • Fractionation • Oleochemical • Esterification • Refined product storage
• Packaging and branding • Food products • Non – food products
PRODUCTS
• DxP seeds • Fresh fruit bunches • Crude palm oil • Palm kernel • Biomass (Empty Fruit Bunches, kernel shell, fronds) • Palm oil mill effluent
• DxP seeds • Fresh fruit bunches • Crude palm oil • Palm kernel • Biomass (Empty Fruit Bunches, kernel shell, fronds) • Palm oil mill effluent
• 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
•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
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
3. Diversified Activities and Application for Long Term Supply Assurance
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
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
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 palm-based 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%.
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)
Why MPO? 7. Marketing of Palm Olein in Opaque bottles can be facilitated like what was done in Romania and
Saudi Arabia
Why MPO?
8. Trans-free vanaspati formulation
can be facilitated in collaboration
with MPO Service Providers
Why MPO?
9. Health Issues will be addressed
appropriately with MPO
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
Areas of Opportunities for Malaysian Palm Oil – A MALAYSIAN PRODUCT INNOVATION
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
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
Do Not Choose to Fry With Polyunsaturated Oils – Oxidized Fats Are Equally Unhealthy as Trans Fats
7
8
16
7
7
13
14
15
27
43
51
72
87
26
62
62
15
28
23
18
47
38
18
4
55
26
21
71
57
54
54
9
10
2
3
3.5
10
1
1
8
1
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Natreon Canola AOM 42
Natreon Sun AOM 53
Low lin Soy AOM 20
Low Lin canolca (C5) AOM 30
Canola AOM 18
Sunflower AOM 14
Com AOM 25
Soybean AOM 15
Cotton AOM 25
Lard AOM 25
Palm AOM 50
Sats Oleic 18:1 Linoleic 18:2 Linolenic 18:3
Oxidative Stability Measurement (AOM) of Common Oils and Fats
•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
Deterioration during Frying
Oil hours FFA % Smoke point ˚C
Viscosity (CP)
Polymers % Foam Index *
Peanut Oil
0 0.02 235 50 0.2
82 0.28 229 102 12.6 10.2
Palm olein
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 Olein is Superior To Peanut Oil For Deep Frying
Palm Oil Fractions With Different Iodine Values For Vegetable Ghee or Frying Fat Formulation
Palm Oil IV 51 - 53
Olein IV 57 - 59
Super Olein IV 64 - 66
Top Olein IV 70 - 72
Soft PMF IV 42 - 48
Hard PMF IV 32 - 36
Hard Stearin IV 32 - 36
Soft Stearin IV 40 - 42
Super Stearin IV 17 - 21
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
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!
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/m2)
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
Canola, 0.6 Corn, 3.6 Olive, 0.6
Palm, 81.7%
Rice Bran Oil, 0.6
Sunflower, soya, etc. , 13%
Canola
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 but we have emerging data for palm oil!
Lipoprotein Particle 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
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.
Sundram et al. 2013
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
Correlations: Carbohydrate intake and Lipoprotein Particle Size
Sundram et al. 2013
In the Malaysian diet, it is the carbohydrate content rather than fats that trigger adverse outcomes for LDL particles and coronary heart disease .
Total LDL 0.053 NS
Large LDL -0.044 NS
Medium LDL -0.185 NS
Small LDL 0.188 NS
Correlations: Fat intake (Primarily Palm Oil) and LDL Particle Size
Sundram et al. 2013
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.
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
Conclusion (cont.)
• Solution Provider: Consumers get strategic solutions from Malaysian palm oil: food security, trans free products and competitive prices
Conclusion
• Malaysian Palm Oil: Your Perfect Partner for Progress
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