POINTERS: Supply and Demand Outlook of Palm and Laurics Oils for 2nd Half 2013

By: Mr. Thomas Mielke

Thomas Mielke is Executive Director of ISTA Mielke GmbH in Hamburg (Germany), OIL WORLD, a leading research organization that provides global supply, demand and price analyses, statistics and forecasts for all the major oilseeds, vegetable oils & animal fats and oilmeals as well as for biodiesel and livestock products with clients in 100 countries. He is a frequent speaker at conferences and workshops all over the world. Thomas Mielke joined the OIL WORLD team in the mid-1970s, after studying economics. He is a member of the Programme Advisory Committee of the Malaysian Palm Oil Board and is giving lectures at the University of Hamburg (TUHH). In 2014 Thomas Mielke received a Lifetime Excellence Award of the Malaysian industry in recognition of his contributions and commitments. OIL WORLD was founded in 1958 and is recognized worldwide as a leading independent, authoritative and unbiased information provider. The WEEKLY and daily FLASH reports can be obtained from www.oilworld.de and also an OIL WORLD report in Mandarin is released 2 times a week.

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In his presentation Thomas Mielke will highlight latest OIL WORLD forecasts of supply & demand not only of palm and lauric oils but also for the competing soybean oil, rapeseed oil and other oils & fats worldwide. The global dependence on palm oil has increased significantly during the past several years owing to insufficient production of soya oil and other oils & fats. In the 10 years until Oct/Sept 2012/13 world production of palm oil doubled to almost 56 Mn T. In Oct/Sept 2012/13 palm oil had to fill the gap created by the shortfall in world production of all the other 16 oils & fats, which showed a combined decline by two million tonnes from a year earlier. As a result, world exports of palm oil are likely to reach a record 44 Mn T in Oct/Sept 2012/13, while exports of palmkernel oil are going to increase to 3.5 Mn T, a combined 4 Mn T more than a year earlier. Both oils will thus account for as much as 62% of world exports of all 17 oils & fats compared with 53% ten years ago.

Stocks of palm oil in Malaysia and Indonesia declined substantially by at least a combined 2.0 Mn T from the peak registered in December 2012. Therefore, the ampleness of supplies has disappeared for the time being, allowing palm oil prices to recover from their lows.

Thomas Mielke will also highlight the prospective pronounced increase in world production and export supplies of soybean oil in the 2013/14 season and will discuss to what extent this will affect demand for and prices of palm oil in the months ahead.

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Questions & Answers (6) :

Thomas Mielke

11 years ago

Dear Rohit, we at OIL WORLD forecast Malaysian production of crude palm oil to reach 19.1 Mn T in Jan/Dec 2013 (vs. 18.8 in 2012), assuming a seasonally recovery starts in July and accelerates in Aug, Sept and Oct owing to recovering yields per tree, following the surprisingly low yields and production in Apr/June 2013. After the recent palm oil price setback we believe that additional downward pressure will be limited. World consumption exceeded production by 1.8 Mn T in Jan/June 2013, resulting world stocks to decline correspondgly. But Malaysian stocks are set to recover in the medium term, keeping prices near current relatively low levels in the medium. best regards, Thomas Mielke

Rohit

11 years ago

Hello Sir! It's a pleasure to get opportunity to talk with you I will like to thank Mpob for this. My question is how much palm Malaysia will produce this year and what will be its effect on prices on the lower side as well as upper side. Regards Rohit

Thomas Mielke

11 years ago

Dear Ms Gan, Iran has considerably boosted imports of palm oil in recent months, which is mainly for use in the food industry. I am not aware of any noticeable re-exports of palm oil from Iran. For Oct/Sept 2012/13 we at OIL WORLD estimate total Iranian imports of 17 oils & fats at a record 1.68 Mn T (compared with 1.16 Mn T in 2009/10), of which palm oil 0.80 Mn T (against 0.61 Mn T three years earlier), soya oil 0.60 Mn T (0.24) and sunflower oil 0.19 Mn T (0.20). Additional information can be provided from the OIL WORLD data bank.

POINTERS SECRETARIAT

11 years ago

Dear Mr. Mielke. Iran is under US sanctions. Why then can palm oil still be exported into the country. I notice that the growth in Malaysian palm oil export to the country is very strong this year. Is this palm oil imported mainly use as food in Iran or are they re-exported? (This question is e-mailed to the POINTERS secretariat by Ms. Gan of the Arab Malaysia research group)

Thomas Mielke

11 years ago

Dear Ivetta Gerasimchuk, thank you for your questions, to which it is my pleasure to respond. Question 1: The main reason is that there is not enough acreage in the EU to raise production sufficiently to satisfy requirements for oilseeds and products, grains and other agricultural commodities. In 2012 the EU produced 28 Mn T of oilseeds. This was highly insufficient to satisfy requirements of oilmeals and oils & fats. As a result, the EU imported 18.8 Mn T of 10 oilseeds, 29.1 Mn T of 12 oilmeals and 10.1 Mn T of 17 oils & fats in Jan/Dec 2012. Palm oil accounted for 6.3 Mn T of imports in calendar year 2012, sun oil 1.0 Mn and rapeseed oil 0.3 Mn T. Question 2: Palm oil improved its market share and consumption increased (in the food and the biofuel industries) in July/Dec 2012 as well as in Jan/June 2013 because it was relatively more attractive than other oils & fats. A detailed analysis is available in the OIL WORLD ANNUAL 2013 released in early June and which can be obtained from www.oilworld.de . Please do not hesitate to contact me again if you have additional questions.

Ivetta GERASIMCHUK

11 years ago

Dear Dr. Mielke, I would be grateful if you could answer 2 questions: Q1. Why the EU vegetable oil producers are unable to meet all of the EU’s increasing demand for vegetable oils? There is a lot of talk of the EU farmers' being able to use idle land and yield productivity thanks to the EU biofuel policies. Yest, why the EU needs such large amount imports such as palm oil imports? Is it the issue of rapeseed and other oil producers’ slow response to the market’s demand? Or the issue of price competitiveness of palm oil? Q2. Many of the EU countries have increased the use of palm oil in both fuel and food production. What are the main reasons for that? What are the EU countries that have been more self-sufficient in terms of vegetable oils’ supplies? Why these countries? Many thanks in advance! Ivetta Gerasimchuk, International Institute for Sustainable Development