Slide 1

PALM OIL IN THE GLOBAL OILS & FATS MARKET

BYMALAYSIAN PALM OIL COUNCILEGYPT

1

Presentation OutlineMPOC Role and Functions

Overview of Global Oils & Fats Scenario

Palm Oil in The Global Oils & Fats Market

Palm Oil in The Egyptian Market

2

MPOC ObjectivesEnhance trade opportunities in the market place

Encourage product diversification

Improve understanding of palm oil

Safeguard Malaysian palm oil as a leading Vegetable oil

3

MARKETING & MARKET DEVELOPMENTSCIENCE & ENVIRONMENT SUPPORTED BY INDUSTRY PARTICIPATIONPalm Oil Trade Fairs and Seminars (POTS)Palm Oil Industry Leadership Award (PILA)Palm Oil Industry Leadership Forum (PILF) Dialogue with traders/government officialsConsumer Education ProgrammesTrade ExhibitionsPublication/Advertising ActivitiesMarket Missions and StudiesTrade/Technical SeminarsPRIME/PRIME-INVEST CARESPR activities Familiarization ProgrammesLobbying ActivitiesPROMOTIONS & BRANDING

MPOC Activities

4

MPOC Worldwide Offices

10 OFFICES COVERING 6 REGIONS

5

World population increase by 70-80 mil / yearDemand of oils & fats expands by 4-5 Mn. MT/yearWorld arable land stagnant / shrinking due to population growth. By 2020, arable land will drop to less than 1 acre per capita.

Global Supply & Demand Situation

Future of palm oil is driven by growth in demand for food, oleo chemicals and bio fuel due to population and economic growth

6

Net Importers

Net ExportersFAO estimates that by 2050, rising population and incomes will require 70 percent increase in global food productionSource: Oil World, Dec 2012Net exporters of oils and fats Asia Pacific (palm oil) & Americas (soybean) AND the rest of the countries are net importers

Market Challenges -Growth in World Population/Food Security

7

World Oils & Fats Production

8

World Oils & Fats Consumption1990200020102012Palm Oil11.0821.7545.5751.74Soybean Oil 16.1325.1739.1341.68Rapeseed Oil8.214.2723.6224.13Sunflower Oil7.899.4712.814.52Others37.6143.0950.5951.54Total80.91113.75171.71183.1

9

Oils & Fats Exports 1990 2000

10

Oils & Fats Exports 2010 - 2012

11

World Oils & Fats ConsumptionWorld average per capita consumption of all oils and fats has grown progressively each year from a level of 18.9 kg in 2001 to 25.9 kg in 2012.

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. These high growth countries will tend to be in the developing world where palm oil has traditionally been strong.

12

Consumption Palm Oil VS Other Oils

13

CONSUMPTION PALM OIL VS OTHER OILSConsumption Palm Oil VS Other Oils

14

Growth in population 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 Increased application in the production of food and non food (oleo chemicals/bio diesel), especially in countries such China, India, Middle East, EU , America

15

Palm Oil in The Global Oils & Fats Market Palm oil is the largest produced vegetable oil in the world

In 2004 palm oil pushed soybean oil into second place as the most produced oils & fats in the world

Palm is generally the most competitive commodity vegetable oil and also the less expensive oil to produce and to refine.

16

Palm Oil Production And ConsumptionProduction of palm oil in 2012 was almost 53.4 million MT and 90% of palm oil comes mainly from Malaysia and Indonesia

Other producers are Thailand, Nigeria and Columbia

Consumption is mainly from China 5.9 million MT, India 5.5 million MT, EU-2.75 million MT, Pakistan 2.1 million MT, and Thailand 1.3 million MT

17

Palm Oil Uses in The Global Oils & Fats MarketIt is a versatile oil used not only in food applications but also non food such as detergents, pharmaceuticals and biofuels.

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.

A mid-fraction produced during fractionation is used as a cocoa butter equivalent (CBE).

18

Palm Oil in The Egyptian Oils and Fats MarketEgypt is a potential market for palm oil due to:Well structured industryTrade agreements Fast growing food industries Growing population Insufficient oils and fats production Encouraging import tariff structure Competitive Utilities Tariff Unique geographic location

19

Egypt-Oils & Fats Consumption (000 MT)Product20082009201020112012Soybean oil563.9442.5462.7667.1329.6Cotton oil37.325.52227.829.1Sunfloweroil195.6407.6461.6399747.8Rapeseed oil4.80.1000Corn oil23.72114.733.445.8Olive oil0.91.257.56.6Palm oil496586.5594.8525578.4Palmkern oil13.811.314.629.427.7Coconut oil4.36.25.314.25.5Butter,as fat123.5134133135.3141Lard00000Linseed oil10.67.75.97.48.3Castor oil0.20.20.20.70.7Tallow&Grease0.10.20.10.10.1Total 1474.416441719.91846.81920.5

Source: Oil World

20

Egypt-Palm Oil ConsumptionSource: Oil World

21

Palm Oil Applications in EgyptSource: Gain Report Palm Oil become major component in Egypt. Its uses spans from food to non-food applications.

Palm oil uses are extremely versatile as we can see it in big range of products in the retail market today.

22

ConclusionPalm oil continues to be an attractive long term commodity for producers and consumers.

Manufacturers get strategic solutions from palm oil; food security, trans free products and competitive prices

Increasing global demand for palm oil will continue in the food applications. Today 1 in 10 food products contains palm oil as one of its ingredients.

23

Conclusion

Palm oil will be the primary oil source to supplement the increasing needs of oils and fats requirements globally

Malaysian palm oil is produced using sustainable and good agricultural practices.

Malaysia will continue to be the most reliable supplier of palm oil in the global markets and supported by its technical and quality benchmarks

24

Thank You

25

Worlds growing dependence on palm oil will boost demand further in the futureX1,000 MTSource: Oil World