palm oil marketing: new money for the players · palm oil marketing: new money for the players ....
TRANSCRIPT
Tan Sri Datuk Dr. Yusof Basiron MALAYSIAN PALM OIL COUNCIL
PALM OIL MARKETING: NEW MONEY FOR THE PLAYERS
OUTLINE OF PRESENTATION
1. Importance of palm oil
2. Demand of palm oil to increase in future
3. Generate new sources of revenue for palm oil industry
Finding new markets
Use innovative ways
Tap on new opportunities
Newer Malaysian Government Initiatives
4. Indirect ways to make money
5. Conclusions
IMPORTANCE OF PALM OIL CONSUMPTION: PALM OIL VS OTHER OILS
Palm Oil 30%
Soyabean Oil 23%
Rapeseed Oil 13%
Sunflower Oil 7%
Others 27%
2013
Demand of palm oil to increase
-
2.00
4.00
6.00
8.00
10.00
12.00
14.00
16.00
18.00
20.00
-
500
1,000
1,500
2,000
2,500
3,000
3,500
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
20
13
(MIL
LIO
N M
T)
(RM
/MT)
Palm oil producing countries benefitted through both increase in price and volume Volume to increase further in future due to growth in population and affluence
Meeting future palm oil demand is dependent on yield improvements
0
2
4
6
8
10
12
14
16
18
20
PresentHigh
commercial yield
Best expt plotSelected progeny Max theoretical
Limited land area for oil palm plantation expansion
Palm oil prices to remain firm
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
19
91
19
92
19
93
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
20
13
('000 MT) Source : Oil World 2014
• World requires average 6 MT additional oils & fats annually • High demand and limited capacity of other oils & fats to increase supply • Palm oil price to remain firm
FINDING NEW MONEY 1. Look for new markets
The biggest markets for Malaysian palm oil are Asia Pacific, Sub Continent and Europe
However, in terms of market growth, the two biggest growth regions are the African region and American region
Export to these two regions increased from 382,186 MT in 2001 to 1.72 million MT and 288,000 MT in 2001 to 1.15 million MT in 2013 respectively
This is a growth of 351% and 299% respectively for the African and Americas region
Increase partly due to MPOC’s continuous efforts in marketing of Malaysian palm oil whilst at same time countering anti palm oil campaigns through factual evidence and engagement with stakeholders
1. Malaysian Palm Oil – Export By Region 2001 - 2013
Source : MPOB & MPOC
0 1 2 3 4 5 6 7 8 9
10 11 12 13 14 15 16 17 18 19
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
(Mill
ion
MT)
Africa Americas Asia Pacific
Europe Middle East Sub-Continent
• Malaysia & Indonesia DUOPOLY COMPETITION • Should complement each other, not out–do one another • Or else both will suffer
EXPORTS OF PALM OIL TO SELECTED MARKETS 2009 - 2013
Country
2009 2013
Malaysia Indonesia Others
Total (‘000 T)
Malaysia Indonesia Others Total
(‘000 T) Volume (‘000 T)
Market Share (%)
Volume (‘000 T)
Market Share (%)
Volume (‘000 T)
Market Share (%)
Volume (‘000 T)
Market Share (%)
Volume (‘000 T)
Market Share (%)
Volume (‘000 T)
Market Share (%)
China, P.R. 4,027 60.8 2,579 39.0 12 0.2 6,618 3,700 58.3 2,612 41.1 38 0.6 6,350
EU 1,892 31.9 3,086 52.1 949 16.0 5,927 2,337 35.0 3,553 53.2 784 11.8 6,674
India 1,354 20.4 5,255 79.1 31 0.5 6,641 2,325 28.2 5,894 71.4 31 0.4 8,250
Pakistan 1,769 88.8 218 10.9 6 0.3 1,993 1,435 56.7 1,095 43.3 1 0.0 2,531
Iran 342 61.6 170 30.5 44 7.8 555 635 66.5 318 33.3 2 0.2 955
Japan 539 50.3 532 49.7 1 0.0 1,071 501 84.7 89 15.0 2 0.3 592
Vietnam 241 48.5 208 41.7 49 9.8 498 500 83.7 96 16.1 1 0.2 597
Singapore 353 85.2 59 14.1 3 0.7 415 492 56.1 380 43.3 5 0.6 877
Egypt 609 64.2 340 35.8 0 0.0 949 451 37.5 751 62.5 0 0.0 1,202
Bangladesh 110 12.6 729 84.0 29 3.4 868 442 35.6 798 64.3 1 0.1 1,241
South Korea 293 99.1 1 0.2 2 0.8 296 354 88.2 46 11.5 1 0.3 401
Myanmar 181 55.1 118 35.8 30 9.1 329 263 42.3 311 50.2 46 7.5 620
Source: MPOB & Oil World
Finding New Money Find New Markets
1. Expanding markets
Eastern Europe
Russia’s admission into WTO provides an excellent opportunity
Philippines
Philippines Market
New market not well tapped previously
Palm oil to substitute coconut oil
Marketing of cooking oil in opaque containers
Locals used to buy light colored corn oil
Packing in smaller volumes e.g. 400 or 800ml (usual is 500-1,000ml) to meet price affordability
Innovative way of marketing palm olein in opaque bottles
MPOC initiated idea of marketing of cooking oil in opaque bottles or packaging
Highly suitable in regions with temperate climate
Successfully done in Romania, Iran, Philippines, Dubai, Saudi Arabia
WORLD INTERNET USAGE AND POPULATION STATISTICS
World Regions Population Internet Users Dec. 31, 2000
Internet Users Latest Data
Penetration (% Population)
Africa 1,073,380,925 4,514,400 167,335,676 15.6 %
Asia 3,922,066,987 114,304,000 1,076,681,059 27.5 %
Europe 820,918,446 105,096,093 518,512,109 63.2 %
Middle East 223,608,203 3,284,800 90,000,455 40.2 %
North America 348,280,154 108,096,800 273,785,413 78.6 %
Latin America / Caribbean 593,688,638 18,068,919 254,915,745 42.9 %
Oceania / Australia 35,903,569 7,620,480 24,287,919 67.6 %
WORLD TOTAL 7,017,846,922 360,985,492 2,405,518,376 34.3 %
The Importance of Internet
The internet has grown rapidly in terms of number of users since 2000 where it hit 15.5% CAGR until 2014. The importance in getting fast information, fuelled by social media and ubiquity of connection through mobile devices has contributed to the rapid growth of the internet.
Main anti palm oil campaigns comes from countries / regions that has highest internet penetration and potential for higher palm oil intake
Sources: US Census Bureau, InternetWorldStats
The Importance of Internet
• Good information dissemination on the internet requires
1) Right platform for content delivery • Official website • Supported by social media channels i.e. Twitter, Facebook
2) Technical know-how • Search engine strategy • Mobile responsive website • Fast loading website
3) Strategic content delivery • Content marketing • Using strategic content delivery vehicles
Elements to Focus on Digital Strategy
Digital Presence : New Ways to Open Up Old Market
• The internet is a new world where most market especially in commodity are not tapped
• Information is now gathered through the internet. The penetration rate reached 34% (2.4 billion) of the global population
• Presence on the digital world and having the right strategy will increase users / consumers understanding the goodness of palm oil – opening palm oil to new market opportunities
• Online trading through e-commerce platform will increase uptake of palm oil and palm products by ease of doing business i.e. Alibaba.com as a success story on the potentially biggest IPO
Finding New Money New Opportunities/Revisit Old Opportunities
1. Trans fats issue
2. Palm kernel cake
3. Palm biodiesel
4. Palm furniture
1. Malaysia’s Experiences in Global Marketing - Scope and Products
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
Many countries around the world have banned the use of trans fats in food
The government of India has made it compulsory for food manufacturers to mention trans fats content on labels
The U.S. Food and Drug Administration is looking to ban trans fats included in food
Harvard scientists estimate that trans fats may contribute to more than 30,000 premature deaths each year
FDA officials estimate as many as 7,000 deaths and 20,000 heart attacks would be prevented by eliminating trans fats from processed foods
Palm oil is proven to be healthy and trans fats free
Opportunity to expand market using this theme
Opportunities: Trans Fats in Food
Capitalizing on Trans Fats Issue
Big market potential that is just emerging
• Solid food formulation
Promote sales of palm stearin to make margarines, vanaspati and shortenings
• Blending soft oils with palm oil
Blending soft oils with palm oil
E.g. Smart Balance
• US still hygrogenationg 900,000t of soft oils.
At 50% replacement, US alone will need 450,000t palm oil
to make trans free products
Opportunities: PKC potential yet to be tapped fully exploited
2013 2010 2005 2001 Difference 2013 - 2001 (%)
2001-2013
EU 827,651 1,000,766 1,559,852 1,534,492 (706,841) (-46.06)
NEW ZEALAND 795,642 640,296 225,543 21,018 774,624 3,685.47
SOUTH KOREA 470,156 462,169 165,578 201,221 268,935 133.65
CHINA P.R 202,580 227,008 - 28,856 173,724 602.03
TURKEY 123,949 - - - 123,949 -
SAUDI ARABIA 111,546 47,000 - - 111,546 -
PAKISTAN 57,062 19,871 - - 57,062 -
AUSTRALIA 22,455 4,759 - - 22,455 -
OTHERS
COUNTRIES
56,054 43,524 83,027 23,842 32,212 135.11
TOTAL 2,667,096 2,445,393 2,034,000 1,809,430 857,666 47.40
MPOC’s efforts to inform end users of PKC’s use for animal feed which is economically feasible have paid off
PKC total metabolizable energy per USD is higher than soyameal, rapeseed and sunflower meal
For every USD spend on PKC, the energy value is 52.7 MJ which is 29.5%-108% higher than that of soya, rapeseed and sunflower meal
For crude protein, PKC has 22.1%-33% lower protein content compared to rapeseed and sunflower meal
However, the crude protein content that can be obtained per USD is the same for soyameal and PKC
PKC crude fibre content is high at 17%
The high crude fibre content is said to be more suitable for ruminants than non-ruminants
PKC Advantages
Nutritive and cost advantage of PKC
CP
Kg/USD
ME
(MJ/USD)
TDN
(Kg/USD)
PKC 0.81 52.7 3.57
Soymeal 0.81 25.3 1.42
Rapeseed meal 1.21-1.27 33.6-40.7 2.42
Sunflower meal 1.04 29.0 2.27
Based on cif Rotterdam price 2013 Price : PKC –USD199/MT, Soymeal – USD590/MT Rapeseed meal – USD297/MT, Sunflower meal – USD286/MT
CP : Crude protein, ME : Metabolizable energy, CF – Crude Protein TDN : Total Digestable Nutrients
MALAYSIAN BIODIESEL EXPORTS(MT) 2006 – 2013
2006 2007 2008 2009 2010 2011 2012 2013
U.S.A 34,406 51,953 71,324 39,594 3,482 - - -
EU 12,598 24,696 70,273 119,277 40,660 38,811 21,832 141,532
JAPAN 961 87 7 47 8 3 - 162
HONG KONG 21 221 70 - - - - -
AUSTRALIA - 6,065 1,203 - - 41 311 334
CHINA P.R - - 6 - - - 330 20,332
INDIA - 109 24 114 47 40 188 764
INDONESIA - - - 23,006 45,072 - 3,960 8,278
SINGAPORE - 5,665 29,485 38,821 2 124 42 40
TAIWAN - 216 3,081 5,571 159 9,223 2,299 2,343
SOUTH KOREA - - 6,594 530 180 1,537 - 1,227
OTHERS - 6,001 41 498 - 221 21 20
TOTAL 47,986 95,013 182,108 227,457 89,609 49,999 28,983 175,032
Palm Biodiesel Usage in Malaysia
Malaysia will implement the B5 biofuel program on nationwide basis by July 2014
It is expected that as much as 500,000 MT of palm oil will be utilized for the production of the biofuel blend
Malaysia currently has a biodiesel production capacity of 3.6 million MT per year
Palm biodiesel usage to bring in bigger revenue for biofuel producers
Also to be used as a tool to stabilize CPO price
Palm Biodiesel Demand Overseas
There is an increasing demand for palm biodiesel especially in Europe
It was reported that between 2006 and 2012, 80 percent of the European Union's increase in palm oil consumption was due to increased use for biofuel production
Palm oil consumption for biodiesel surged 465 percent from 402,000 tons to 1.87 million tons between 2006 and 2012
Government Initiatives National Key Economic Areas (NKEA)
Economic Transformation Programme (ETP)
Palm Oil Entry Point Project No.6
• Develop more high value oleo derivatives and bio-based chemicals
Palm Oil Entry Point Project No.7
• Commercialising Second-Generation Biofuels
• Pellets
• Bioethanol
• Biochemicals
National Biomass Strategy 2020: New wealth creation for Malaysia’s palm oil industry
Applications of Oil Palm Biomass
29 29
OIL PALM BIOMASS
BOARD OF VARIOUS KINDS
• MDF • Plywood • Moulded particleboard • Sawn lumber
PROPERTIES OF OPT, OPF & EFB FIBRE BUNDLES
• Fibre quality • Fibre morphology • Fibre properties • Usable fibre fractions
OTHER PRODUCT TYPES
• Oil palm heart • Carbon products • Carboxymethyl cellulose • Fine chemicals
FIBRE REINFORCING COMPOSITES
• Agrolumber • Plastic composite
PAPER PULP & PAPER PRODUCTS
• Chemical pulp • Semi-mechanical pulp • Mechanical pulp • Moulded paper products • Soilless planting medium
Palm Wood Furniture
- MPOC saw potential of palm wood furniture - Started Palm Wood Promotion Scheme in 2012 - For Furniture China 2012 exhibition, confirmed sales were at RM1,500,000 while Furniture China 2013 had RM1,000,000 confirmed sales. - MTC to promote palm wood furniture aggressively.
INDIRECT WAYS OF MAKING MONEY (Revenue from import tax)
Product Import Duty
Duty discount
under FTA
Duty payable (USD/t)
Import (tonnes)
2013
Revenue from import tax (USD)
CPO Rs 9,000 15% 72.86 189,129 13,779,398.57
RBD PO Rs 10,800 15% 87.43 221,947 19,404,509.14
RBD PL Rs 9,050
15%
73.26 876,773 64,453.845.74
Total 97,637,753.45
PAKISTAN
Savvy traders use palm oil as commodity to get money from bank
Ongoing price discount (between market and landed price) resulted from the misuse of financial credit made available for commodities sector, led most users to buy palm oil directly from these “traders”.
Quick cash obtained by selling palm oil at discount was then used to offer loans to SMIs
According to a report released by China Academy of Social Science, loan offered through China shadow banking system estimated at RMB14.6 trillion, or 29% of GDP.
In order to continue getting loan from bank, the “traders” have to continue to import palm oil for fresh credits to repay the previous loans
INDIRECT WAYS OF MAKING MONEY (China – using palm oil as commodity proxy for money)
CONCLUSIONS
• Palm oil trade remains vibrant even though palm oil price has retreated
• Due to conscientious efforts made to find new markets, tap on new business opportunities or revisit old ones, palm oil industry can make more money directly
• Also indirect ways to make money from palm oil trade
• Malaysian Government boost to generate new sources of income via e.g. Economic Transformation Programme & National Biomass Strategy
• Palm oil industry is big enough and will attract many players who will come up with innovative activities to generate more income
• Importance is that, ultimately, palm oil continues to create more and more money for the players directly or indirectly
Artificial high demand created for palm oil
This has created a phenomenon of artificial demand for palm oil in China, whereby import was high but actual demand remained unchanged.
Subsequently, the stock of palm oil built up and reached a record high of 1.5 Mn. MT by end Apr / early May. As of 25 November 2013, stock level remains high at 955,000 MT, a buffer stock that enough for almost 2 months of local requirement for palm oil.
Traders dominate import of palm oil into China
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
Jan-1
1
Mar-1
1
May-1
1
Jul-1
1
Sep-1
1
Nov-1
1
Jan-1
2
Mar-1
2
May-1
2
Jul-1
2
Sep-1
2
Nov-1
2
Jan-1
3
Mar-1
3
May-1
3
Jul-1
3
Sep-1
3
Share
of
Import
(%
)
PO Import Share Between "Traders" and Users
% Imported by trader % Imported by users
Listing of company on stock exchange
• A way to generate money
• FGV listing
• Boustead Plantations listing
Indirect beneficiaries • Organizations and NGOs which are not part of
direct marketing chain creating opportunities for making money
• RSPO
• Collects fees for certification, use of logos, membership, auditing & consultancy
• RSPO collects RM 9 million revenue
• Exceeds annual funding of many associations of palm oil industry
Today, food warfare is firmly under the control of London, with the help of subordinate partners. The Windsor-led oligarchy has built up a single, integrated raw materials cartel, with three divisions—energy, raw materials and minerals, and increasingly scarce food supplies.
The queens German husband, Prince Philip Mountbatten, alias Philip Battenberg has been quoted as saying:
"In the event that I am reincarnated, I would like to return as a deadly virus to solve the overpopulation problem".
The late Jacques Cousteau, a famed advocate for the oceans and the environment, was quoted in a November 1991 UNESCO Courier saying,
"In order to stabilize world populations, we must eliminate 350,000 people per day. It is a horrible thing to say, but it's just as bad not to say it.” THE NAZI CONNECTION
World Wildlife Fund co-founders, Philip and Bernhard, are from the same bloodline. Philip and his royal family are steeped in Nazi connections. Bernhard was a member of Himmler’s murderous SS. He was born a German in 1912, the cousin-in-law of Princess Victoria of Hohenzollern, the sister of Kaiser Wilhelm. He was recruited into Nazi Intelligence at the University of Berlin in 1934 and worked for the SS operation within I. G. Farben, the chemical giant which had such close connections with the Rockefeller/ Farish Standard Oil and British companies like ICI.
