March & April 2012, SAARC OILS & FATS TODAY
SAARC OILS & FATS Today, March & April 2012
March & April 2012, SAARC OILS & FATS TODAY
Contents Chief EDITOR S. Jafar Naqvi Hon. Advisory Board Dr. A. K. Vasishtha Dr. I. A. Siddiqui G.G. Patel Ajay Tondon O. P Goenka Dr. S. K. Saxena Consulting Editors T.V. Satyanarayanan K Dharmarajan Editorial Co-ordinator Syed M K
v Editorial Cover Story v Palm & Lauric Oil Price Outlook 2012 Vegoil Prices To Peak Around June — Dorab E Mistry
5 6
v Malaysia’s Economic Program Gives Key Role to Palm Oil Industry
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v Weak Case For Bullish Outlook In Palm Oil — G. Chandrashekhar
13
Dairy Industry v Dairy Industry Conference 14 Raising Output To Ward Off Shortage — Bureau Report
General Manager Lalitha V Rajan
Bio-fuel Bio-fuels Lead Toward Green Economy, Says A Report
Production Mohd. Iqbal
Production v India’s Rice Production Touches 100 Mt Mark 20 — T. Nandkumar
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Rapeseed Sea Crop Survey Rapeseed Output Likely to Dip — Bureau Report
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Soya v Production of Soyaflour — Full Fat, Medium Fat, 24 & Defatted — Dr. S D Kulkarni and Dr. L K Sinha Research v Raw Milk Causes Disease Outbreaks: 28 US Research Study Castor v Higher Sowing May Raise Castor Seed Output 29
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Technology Oil Seeds Processing 30 Productivity is Attributable To Cutting Edge Technology (Part-2)
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Corporate News v Hatsun Agro to invest 50-cr to start ice-cream chain
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News
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Victam Report v Focus on safety of animal feed from chemical
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SAARC OILS & FATS Today, March & April 2012
Editorial M
any farmers in Andhra Pradesh are reportedly switching to oil palm cultivation. Reason: They find crops like sugarcane not remunerative enough. This shift to oil palm, or sunflower and maize is welcome news to edible oil industry, which can look forward to getting more supplies of oilseeds produced domestically for crushing. The shift is all the more evident in Telengana region, the state’s important sugar growing belt, where sugar factories are reporting a fall in cane supply. In the states as a whole, the area under sugarcane is estimated to have dropped by over one lakh hectares in the last five years or so. Farmers feel oil palm could be a good alternative because of increasing demand for edible oils. Since the country is spending huge amounts of foreign exchange every year to import edible oils to meet the demand-supply gap, one hopes the 12th Plan, to begin in the new fiscal, would give greater thrust to the oilseeds development programme to augment both production and productivity. A look at the second advance estimates for various crops released by the Union Agriculture Ministry for 2011-12, the last year of the 11th Plan, are a pointer to the areas that need to be strengthened with redoubled vigour in the coming Plan. The figures show a record output of wheat and rice, but a dip in the output of oilseeds, pulses and coarse grains. The oilseeds output is estimated at 30.53 million tonnes, against 32.48 million tonnes achieved in the previous year. The lower output of oilseeds is attributed to belowpar performance by groundnut and mustard. Against groundnut production of 8.2 million tonnes in 2010-11, this year’s figure is estimated at 6.94 million tonnes – a decline of 16 per cent. In mustard, the fall in output is because of shrinkage in crop area in states like Rajasthan. Total mustard output this year is pegged
at 7.5 million tonnes – 8.27 per cent less than in the previous year. Trade figures, however, are even lower than the official estimates. A crop survey by the Solvent Extractors’ Association of India (SEA) has projected mustard production this year at 6.26 million tonnes. The government’s advance estimates have also recorded a small decline in the soyabean output. Going by Prime Minister Manmohan Singh’s recent speeches at various functions, the farm strategy in the 12th Plan would address some of these problems. At a recent Workshop on Agriculture, Dr Singh stressed the need to give greater attention to farming in rainfed areas, where the productivity levels are low. The focus of the Workshop itself was on rainfed farming, which Dr Singh admitted, “Continues to be a gamble with nature.” Sixty per cent of the cropped area in the country is dependent on rains and these areas contribute 80 per cent of the total output of oilseeds and pulses. Dr Singh was clear that two other overarching concerns that need to be addressed are wastage in water use and environmental degradation. All this would mean greater investment in research, and in this context, the Prime Minister’s speech at a function to celebrate the golden jubilee of Indian Agriculture Research Institute was indeed encouraging. He expressed the government’s commitment to raise R&D spending as a whole to at least two per cent of the GDP by the end of the 12th Plan and indicated that a significant proportion of the increased spending would be directed to agriculture and allied activities. For long everyone concerned with agriculture development has been stressing on a paradigm shift. This is the time to put those words into action that must reflect in both formulation of plan strategy and its implementation.
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March & April 2012, SAARC OILS & FATS TODAY
Palm & Lauric Oil Price Outlook 2012
Vegoil Prices to peak around June — Dorab E Mistry Director, Godrej International Limited
I am now repeating the estimate for Malaysian 2012 CPO production, which I first released at the GAPKI conference in Bali in December, at a range of between 18.6 and 19 million tonnes
M
y forecast of 2011 Malaysian CPO production as presented at Palm & Lauric Oil Price Outlook conference last year was 17.3 million and that was way off the mark. My normally reliable model had erred. I quickly realised that the biological cycle of the palm had turned sharply upwards and we were going to have bumper production in 2011. In July at the Conference of the Australian Renderers Association in Sydney, I presented a revised forecast at 19 million tonnes. I am pleased to say that my revised forecast was spot on. I believe world production of palm oil in 2011 expanded by a historic 5.5 million tonnes. My price prognosis of CPO bottoming out at 2800 Ringgits also came true. My further forecast for CPO to begin a slow climb to 4000 Ringgits by June 2012 is, to put it mildly, Work in Progress! Those of you who follow my forecasts will have noticed that last year in several of my papers I also spoke about the fortunes of the U S Dollar. I forecast that Strong Dollar cycles were short-lived and usually lasted only 6 months. On that basis I forecast that the strong Dollar which had commenced in August 2011 would end by February 2012 and that a softer Dollar
SAARC OILS & FATS Today, March & April 2012
would help the rise in CPO prices. Of all my forecasts which have verified to date, I am most happy that I got the Dollar cycle right once again. There is no factor in commodity pricing as important as the U S Dollar and getting it right has meant a lot to me. The Oscars Let me take up the Annual Pat on the Back. The Oscars are given usually given for great performance or for great policy. Over the years I have congratulated companies, individuals and governments. This year I wish to honour an organisation that has delivered on its mandate and continues to do a great job for our industry. I am referring to the Round Table on Sustainable Palm Oil. The programme for certification of palm oil estates has achieved a landmark of 5 million tonnes in terms of CPO and almost 3 million tonnes of those have been taken up by the market. I do not recall any Sustainability campaign in any other crop, anywhere in the world, which has achieved such success in such a short time. As an industry we must be very proud of what RSPO has achieved and it is our duty to
Cover Story encourage and expand the RSPO. As usual I shall give you an over-view of India before discussing world S&DS. India As forecast at the last POC, Indian vegetable oil production last year exceeded that of many previous years and Indian imports were almost half a million tonnes lower. At the same time, and also as expected unfortunately, the Indian government did absolutely nothing to encourage and expand the cultivation of oilseeds. So after one good year when the Rain Gods were kind, we are going to see again the tragic and depressing state of Indian agriculture – stagnant production and rising imports. Once again, in 2011, the Indian market came to the rescue of the sunflower seed producers of Ukraine and Russia. Amidst a glut of sunflower oil, Indian consumption has expanded and has made good use of very attractive prices. There is some doubt over estimates of the Rapeseed crop being harvested at present in India. The Rabi Crop Convention will meet on 16 &17 March to deliberate on up to date findings. A recent survey put the crop at 6.2 million tonnes but that figure is being questioned by many in the industry. My estimate is that the crop is between 5.3 and 5.8 million tonnes only. Current high prices of rapeseed in India also point towards that level of crop. At the same time, the crop is not as low as 5 million as some are saying. Amidst the gloom surrounding India’s domestic production, there is only one slightly positive piece of news. Palm oil production in 2012-13 is likely to reach 200,000 tonnes. Encouragement of Oil Palm is a step in the right direction and we hope the Indian Government will soon declare Oil Palm as a Plantation crop. India’s Production Let us first look at India’s production of vegetable oil. (Oil year November to October) The Indian government is in the process of undertaking a massive Food Security programme. It will guarantee minimum amounts of cereals and food items to each citizen at a subsidized price. When implemented it will create a large
India’s Production 000 tonnes
2012-13
2011-12
2010-11
2009-10
2008-09
Estimates Actual Actual Actual Actual
Soybean oil
1600
1600
1150
1200
1445
Cotton oil
1100
1050
1100
1000
1050
Gn oil
500
500 450
650
900
Sun oil
270
230 350
500
550
Rape oil Sesame oil
1850
2250
1700
1800
1700
100
150
160
150
150
Coconut oil 400 400 400 390 380 RiceBranoil
780
720
700
740
720
Others 350
250
250
250
250
7150
6260
6680
7145
Total
6950
further burden of food subsidies and will also increase total Indian consumption of
food grains. It is a bold step but one which is not before time.
India’s Consumption Let us now look at India’s Consumption 000tonnes
2012-13
2011-12
2010-11
2009-10
2008-09
Estimates
Actual
Actual
Actual
Actual
Soybean oil
2550
2550
2700
2150
2100
Cotton oil
1100
1050
1050
1000
1000
Gn oil
500
500
450
650
880
Sun oil
1270
1000
950
1050
580
Rape oil
1850
2250
1850
1800
1650
150
150
160
150
150
Palm oil
7250
6750
6460
6530
5090
Laurics
600
600
650
600
600
RiceBranoil
780
720
700
740
720
Others
300
250
250
250
16350
15820
15220
14920
12995
Pop.Mlns
1240
1220*
1175
1160
1140
Per cap kg
13.18
12.96
12.95
12.86
11.40
Sesame oil
Total
The rise in per capita consumption has slowed due to high price of vegetable oils. As in previous years, I am indebted to my friend Govindbhai Patel of GGN Research and the Solvent Extractors Association for their help in compiling Indian statistics. Despite vast variation in crop estimates, it is significant that year after year we accurately forecast Indian
225
imports of vegetable oil. Indian Biting Point In various papers last year I explained at length my benchmark of the Indian Biting Point in terms of the local price of RBD Olein in wholesale. It stands at present at Rupees 60,000 per tonne but may have to be raised to keep pace with domestic inflation.
March & April 2012, SAARC OILS & FATS TODAY
Cover Story India’s S&D’s We can now study India’s S&Ds India’s S & D for
000 tonnes
2009-10
2010-11
2011-12
2012-13
Opening Stock
1025
1250
1430
1325
Production
6680
6260
7150
6950
Imports
8640
9240
8665
9475
14920
15220
15820
16350
175
100
100
100
1250
1430
1325
1300
Consumption Exports Ending Stocks
India will continue to be the largest market for Palm oil in the next year. India’s Imports of Vegetable Oil 000 tonnes
2012-13
2011-12
2010-11
Soya
1000
1000
1660
990
750
Palm
7200
6665
6700
6770
5270
Sun
1075
800
630
590
30
200
200
250
240
200
50
50
8640
6300
Laurics
Others Total
9475
8665
Having discussed India I now turn to the Global Scenario Global Scenario The most important feature of 2012 In 2011, the most important price making factors were two: Firstly, the palm oil production cycle and the biggest annual jump in CPO production; and Secondly, the shortfall in soybean production in South America due to drought. For 2012, the biggest factor is going to be once again, CPO production. Therefore I shall go directly to this important factor. Supply Side PALM: The Low Cycle for the palm trees in Malaysia which commenced in September 2010 came to an end by March 2011. It turned out to be shorter than expected. From March 2011 we saw an excellent recovery in production each month and that continued right until December. The glorious High Cycle
2009-10
9240
2008-09
lasted almost 10 months and gave us the highest ever Malaysian production of 18.9 million tonnes. I believe Indonesia produced 25.2 million tonnes in 2011. The biological High Cycle ended in December 2011 and we are now already seeing signs of tree stress. CPO production during January and February 2012 in Malaysia has been in line with my lower expectations. This new Low Cycle will result in flat production for 2012. I am today repeating the estimate for Malaysian 2012 CPO production which I first released at the GAPKI conference in Bali on 2 December, at a range of between 18.6 and 19 million tonnes. From March, palm oil production each month will be less on a year-on-year comparison. I expect the Low Cycle to finish in November 2012. I estimate Indonesian production will be higher by about 1.4 million and will reach 26.5 million tonnes. Export Taxes: Indonesia radically changed its export tax regime in August 2011. This has affected the norms under which CPO prices on the BMD used to be determined. Traditionally, the market looked at Malaysian stocks of crude and
SAARC OILS & FATS Today, March & April 2012
refined palm oil and determined prices. Now as a result of the new export tax regime, Indonesia wins most of the business for refined palm products and that means Malaysian stocks do not decline as expected. Interestingly, Malaysia appears to be still searching for a response to the Indonesian move. For the present, Malaysia has effectively asked its refiners to fend for themselves and has released a normal duty-free export quota for CPO. This can be a clever strategy if they will keep releasing more CPO quota from time to time. Strong exports of CPO from Malaysia will keep Malaysian stocks down and ensure high prices for CPO on the BMD. Overall, Malaysia will become a large CPO exporter but its small holders, growers, settlers and plantation companies will be much better off than their Indonesian counter-parts. On the other hand, Malaysia’s refining and Oleochemical industry will go the way of its bio diesel plants. The only other option available to Malaysia is to adopt a carbon copy of the Indonesian export tax regime and do away completely with the duty-free export quota for CPO. As they say, If you cannot beat them, you join them! What will consumers do? The question now remains as to what the governments of affected countries like India, Pakistan and China which have large refining industries of their own, will do. Normally they would be expected to retaliate against the Indonesian action by raising import duties on RBD products. Yet all these governments fear inflation. So my guess is that they will refrain from retaliation if palm prices rise strongly as they seem to be doing at present. It will be interesting to see what India will do. The Indian government almost certainly wishes to raise the Tariff Value of RBD Olein from $ 484 to the present market level. That step (at present import duty of 7.5 %) could add some $ 50 or Rupees 2500 per tonne to the local price of RBD Olein. My belief is everything will depend on the price action of the next few days. If the palm market slumps, then higher import duty in India will not affect local prices. In that case the government will act. If the palm market runs up, the higher duty will be an additional burden
March & April 2012, SAARC OILS & FATS TODAY
Cover Story to consumers and the government will refrain. Rapeseed: There have been reports of winter kill in Europe and estimates of EU rapeseed production for 2012 have been trimmed down to 19.5 million tonnes. There are also problems in Ukraine. The smaller Indian crop is compensated by a better crop in China. The big unknown is the 2012 Canola crop. Current prices and the dry weather in Canada indicate that if planting conditions permit, we could see Canola acreage expand by at least 10 %. I must however caution you that in Canada there has been in the past many a slip between the cup and the lip. Planting intentions mean little in the face of harsh weather conditions and the growing season is a different matter altogether. I shall refer to the next Canola crop again in my analysis of price outlook. Right now canola and rapeseed prices are very high. Rapeseed oil continues to be a premium oil and its high price is creating space in Europe for pam bio diesel. Sunflower Seed: The big surprise of 2011 was the outstanding production of sunseed in Ukraine and Russia. It was a very profitable season for farmers and crushers alike. Therefore, for 2012 also, we must expect the same or larger acreage devoted to sunflower seed in this region. There is one caveat. In my long years of experience of the oilseed industry, I have known sunseed to be a very fragile crop. Farmers in regions like India and even Argentina will tell you that they have rarely if ever had 2 good sunseed crops in a row. With winter kill affecting canola and even wheat, it is possible that farmers in Ukraine will plant summer varieties of sunseed in their place. There is a possibility of big sunseed crops in 2012 in this region as a result of higher acreage. However, the probability of the same outstanding yields as in 2011 is slim. Weather and growing conditions will need to be watched very carefully. Groundnut & Cottonseed: Overall groundnut production will decline slightly while last year’s bumper production of cottonseed will give us more cottonseed oil this year. Soya: The problems of soya in South 10
America this year are well documented. Throughout the latter part of 2011, I kept saying that many analysts were too hasty in writing up big soya crops in South America when the crop had not even been planted. This led to many of them turning extremely bearish and mine was a lonely bullish voice. Well, as it turns out, 201112 is unique in that soybean production is down as against the previous year by a massive 20 million tonnes. Heaven knows what may have happened if we did not have those big carry- forward stocks. We now have to watch carefully the plantings in USA this year. If planting weather in April is good, we can expect farmers to plant more corn. A figure of 94 million acres for corn is achievable and that would leave soya acreage in bullish territory. Soybean crush margins in Argentina are awful this year. This will impact the cash basis for soya oil and may also impact the tonnage of beans crushed locally. Luckily we have ample carry forward stocks and but it may be a struggle to crush an extra 5 million tonnes of beans this year unless soya oil prices and particularly the basis are strong. Demand Side Food Demand: I am presuming that the world economy overall will grow by at least 3% in 2012. In view of the high level of price and our experience of previous years of price sensitive markets, I have estimated growth in Food Demand at 3 million tonnes only. Bio-diesel Demand: I expect bio diesel demand worldwide to expand by about 3 million tonnes also. Mineral oil prices are likely to remain high due to geo-political tensions and this will keep bio diesel 000 tonnes
workable despite the end of the blenders’ credit in USA. Hence total demand will expand by about 6 million tonnes Incremental Demand v/s Incremental Supply We can see that Incremental Demand is poised to exceed Incremental Supply this year. We can summarize Global Incremental Supply & Demand as follows: China The political leadership in China is in transition with new leaders taking office in April. The outgoing leaders appear to be taking on a statesman-like role and are not saying or doing anything that may tie down their successors. My belief is that further reductions in the CRR, cuts in interest rates and measures to stimulate growth will unfold after the new team takes office. The State Reserve needs to rotate and to replenish its stocks and I have no doubt they are waiting for the right moment to do so. Timing is everything and sometimes you act too early and sometimes you wait too long. Overall I am bullish on China for 2012 and shall say more when I speak in Beijing on 27 March. I shall also speak in November as usual at the Annual CIOC conference hosted by the Dalian Commodity Exchange in Guangzhou. Price Outlook 2012 promises to be a year of Recovery. Except for Europe, the rest of the world will enjoy strong growth with emerging countries leading the pack. I have presumed that the world economy overall will grow by about 3%. Geopolitical tensions such as the situation
Oct 10 to Sept 11
Oct 11 to Sept 12
Soya oil
+ 1,800
+ 800
Rape oil
- 500
-------
Sun oil
+ 800
+ 1,600
Gn & Ctn oil
+ 500
+ 400
Palm oil
+ 5,500
+ 2,000
Lauric oils
+ 350
+ 300
Total Increase
+ 8,450
+ 5,300
Total Demand
+ 6,500
+ 6,000
SAARC OILS & FATS Today, March & April 2012
Cover Story in Syria and over Iran will keep crude oil prices strong for most of the year. During 2011 we saw indifferent weather in many parts of the world. The last was the La Nina in South America. At present, and I choose my words carefully, at present none of the prominent weather forecasters have predicted any problems with weather over the next 6 to 9 months. There is an on-going drought in southern USA but other than that, it may be safe to assume reasonable weather for 2012. I am not a weatherman and anything can go wrong. Some of the usual occurrences we must watch out for are: a bad monsoon in India or drought in Ukraine and southern Russia or even drought in parts of Europe. Finally there is some sign of the emergence of a new El Nino but it is really far too early to say anything. If we have reasonable rains and no El Nino in Malaysia-Indonesia, we must expect a big recovery in CPO production from November 2012 onwards. If we have good planting weather in North America, we must expect a big increase in Canola plantings in Canada. These would be balanced by lower soybean plantings
In my long years of experience of the oilseed industry, I have known sunseed to be a very fragile crop. Farmers in regions like India and even Argentina will tell you that they have rarely if ever had two good sunseed crops in a row in USA where farmers would plant corn extensively since corn is planted first. I am also making an assumption that the soft U S Dollar will continue until about
the end of 2012. As I have explained in previous papers, the history of recent Dollar cycles suggests that a Strong Dollar cycle lasts about 6 months whilst a Soft Dollar cycle lasts about 12 months. Since this soft Dollar cycle commenced in January, it should last until November. It sits nicely with the fact that following the November Presidential elections, some new initiatives or policies may lead to a change in sentiment towards the Dollar. I have also presumed Brent crude trading in a range between US$ 100 and 120. What are the threats to my prognosis? The biggest threat comes from Europe and a possible collapse of the Euro leading to a fall in commodity prices. Second would be threat of war as result of geo-political tensions around Iran And third could be a big weather problem in any part of the world. Price Forecasts Before I speak on price forecasts, I want to emphasize that Incremental
March & April 2012, SAARC OILS & FATS TODAY
11
Cover Story Demand and Incremental Supply seem to be in balance over the entire length of the year. However, the situation is pretty grim in the first half, until June 2012. Ramzan is early this year and we should see peak shipments for Ramzan in June. By that time, CPO production will rise seasonally but it will still remain in the Low Cycle. This period will also coincide with peak summer demand in India when the country relies on imported edible oil for almost 80% of its consumption. The new crop sunflower seed from Ukraine and Russia will only be harvested from August onwards. As we have discussed earlier, soya oil availability for export from Brazil and Argentina is going to be tight given the expanding production of bio diesel. Therefore, stock levels will be at their tightest and I expect vegetable oil prices to peak around June. From June we shall be in the hands of a weather market in North America. Much will depend on how CPO production turns out to be in the months from July to October. As I mentioned last year, the U S bio diesel scenario is very complicated and not easy to forecast. There is something called the Advanced Bio Fuels mandate and there is one school of thought which says that such a mandate will have to be fulfilled by greater production and use of soya bio diesel. Time will tell how rate this turGiven all these bullish inputs and given steady world economic growth coupled with low interest rates, I expect CPO prices to climb steadily from now and peak at USD 1250 FOB or about 4000 Ringgits by the end of June 2012. After June we may see a pull back with CPO prices remaining in a band of US $ 1150 to 1200 FOB. I expect prices to decline only after we have evidence that the Low Cycle is ending, around November 2012. I am encouraged that crude degummed soya oil prices have already climbed towards 1200 FOB. I expect them to peak at between 1250 and 1300 FOB. I expect Chicago bean oil futures to climb to 60 cents despite the improvement in meal prices. Soya oil has been losing market share to sunflower oil and this will not change until we know the fate of the next sunseed crop in Europe. 12
P
Malaysia’s Economic Program gives key role to palm oil industry
alm oil industry will be one of the major economic drivers in Malaysia under the Government Economic Transformation Program to transform the national economy into a higher income status by 2020. Inaugurating the Palm and Lauric Oils Price Outlook Conference in Kuala Lumpur, Tan Sri Bernard Dompok, Malaysia Minister of Plantation Industries and Commodities, said palm oil will also be one the key economic areas focusing on improving the upstream and downstream sectors towards generating higher productivity and new sources of income. The Minister remarked that production of oleo derivatives for applications in soaps, detergents and cosmetics as well as nutraceutical products will receive close attention. “The government will continue to emphasise the development of this industry on a sustainable basis and concurrently ensuring there is balance between its developmental perspective and the need to preserve the environment.” Later, at a press conference, to a question on how Malaysia proposes to respond to Indonesia’s palm oil export tariff revisions, the Minster said that while Indonesia is going through the process of industrialisation, any tax on export will have a bearing on growers. “In Malaysia, we are examining how to help the industry without hurting the growers”, he said. Queried further whether Malaysian and Indonesian governments were in talks to evolve a common tariff policy, Dompok said, “We are cooperating and talking to our counterparts”. It is well known that Malaysia is keen to export value added palm oil products including refined oil and discourage export of crude oil. No wonder, a duty-free export quota for crude palm oil has been fixed. Innovative options for palm oil futures In his address to the conference, Chairman of Bursa Malaysia Derivatives --, the commodity futures exchange that provides a trading platform for palm oil -- said that BMD is set to introduce innovative options for palm oil futures. These options are said to enable traders to not only manage their risks in terms of directional trading but also manage against market volatility. The trigger for this came from recent global events that led to increased volatility of commodities such as crude oil, gold and palm oil, as well as currencies. Another innovation that the exchange is developing is the flexibility to swap. It allows related positions that include OTC swap positions to be converted into future contracts. I expect Rapeseed oil to trade at a premium to soybean oil. I believe even if Canola production expands 10% in 2012, this increase will be absorbed very comfortably. I expect Lauric oils to trade higher than at present. Coconut oil will go to a discount to Palm Kernel oil and should trade to a high of USD 1550 CIF Rotterdam. CPKO has the potential to trade higher and to peak at US $ 1700 CIF Rotterdam. As things stand at present, this promises to be a year of 2 halves. The first half at least until June 2012 promises to be extremely tight and bullish. For the second half we shall have to see
SAARC OILS & FATS Today, March & April 2012
how production performs. Based on this prognosis, in terms of RBD Olein, AMJ and JAS should trade at a considerable inverse to OND. I repeat once again that there are very faint signals of an emerging El Nino. If those signals fail and we are blessed with good weather, we could see lower prices in 2013. n This was the paper presented by the author at recent Palm & Lauric Oils Price Outlook Conference organised by Bursa Malaysia in Kuala Lumpur.
Cover Story
Weak case for bullish outlook in palm oil by G. Chandrashekhar
A
t the just-concluded palm oil Price Outlook Conference in Kuala Lumpur, many analysts presented a bullish forecast for palm oil prices. Without doubt, the market fundamentals are currently tight and set to get tighter in the next three months. Dry weather conditions in South America are set to reduce soyabean production. So, in the short-term, for the upcoming quarter, the downside to prices is rather limited. But is there a large upside risk to prices as some analysts have suggested? The situation looks extremely dicey, simply because some of the crucial market making factors have either not been dealt with or glossed over. It is axiomatic that commodity markets move based not only on demand and supply fundamentals but also on nonfundamental factors such as geopolitics, currency dynamics and role of funds. The most critical issue, of course, is the less-appreciated and less-articulated advantage that Indonesian refiners enjoy due to the favourable export tax structure; and by implication the tremendous pressure Malaysian refiners will face because of the disadvantage. Refined palm oil is sure to score over crude palm oil in terms of export and Indonesia is almost certain to garner market share from Malaysia. A trade agreement with a large buyer like Pakistan puts Indonesia on a stronger wicket to snatch market share from Malaysia. This will result in palm oil stocks rising in Malaysia rather than falling, which in turn will put pressure on Malaysia for competitive price reduction. Already a rising ringgit vis-à-vis the rupiah has been making Malaysian palm oil less competitive. This can potentially squeeze Malaysian companies’ margins and force them to lower prices in order to compete. Surprisingly, analysts have chosen to ignore the large stocks of vegoils that two
of the world’s largest importers, China and India, are currently holding. According to reports, China’s port inventories of palm oil have doubled year-on-year and as at end-February they were said to be close to 850,000 tonnes. This raises the possibility of a slowdown in Chinese imports in the next 2-3 months. Equally surprisingly, the same holds for India, which has imported excessive quantities of palm oil in February (total imports 8 lakh tonnes) with the hope of a tariff hike in the upcoming Union budget. Port-based stocks here are estimated at over 10 lakh tonnes. Worse, traders have complained of sluggish domestic off-take for last several weeks. Summer months — April to July — are periods when cooking oil usage drops. Role of speculative funds is another factor that didn’t receive attention. Very clearly, despite its own market fundamentals, for its pricing, palm oil takes a cue from soyabean oil. At present, speculators have aggressively ramped up their long positions in soyabean and soya oil in the futures exchanges. Palm oil prices have been helped by flow of speculative funds in soya oil resulting in firm prices. This speculative capital came into the soya market to make profits, and there is reason to believe, the price objective has been more or less achieved. This hot money can exit the market anytime, especially if some other commodity provides a compelling investment option. So, a combination of competition between Indonesia
and Malaysia to garner market share, firming ringgit that makes Malaysian palm oil less-competitive for exports, large port-based stocks in China and India as well as exit of speculative funds can potentially limit any strident rise in palm oil prices in general and Malaysian prices in particular. South America and Africa together produce about 7 million tonnes of palm oil, which has been rising by about one million tonnes, a fact that received little attention. So, while palm oil prices are most likely to remain firm, there is no case for a bull run suggested by some analysts. Prices will be steady to firm till June averaging around $1,000 a tonne (plus or minus $100-150) and actually soften in the second half. There are early signs of a rebound in American soyabean crop in the upcoming season with some experts forecasting 810 per cent increase in production. Generally, the northern hemisphere is almost certain to witness a huge rebound in farm output in the second half of 2012 which in turn will soften prices. The vegoil market cannot escape the pervasive softness. n
March & April 2012, SAARC OILS & FATS TODAY
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Dairy Industry
Dairy Industry Conference
Raising output to ward off shortage — Bureau Report
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nother White Revolution is urgently needed to increase the production of milk and milk products to forestall any likely shortage. This was emphasised by Dr N R Bhasin, President of Indian Dairy Association (IDA), in his key note address to the 40th Dairy Industry Conference in New Delhi. The need of the hour, Dr Bhasin said, is a scientific, planned national initiative to boost the output, and called for a focused and systematic approach to increase the productivity of the existing herds. The solution for increasing productivity lies in selecting milch animals through ‘progeny testing’. Genetic progress can be achieved through artificial insemination. Currently only 20 per cent milch animals are bred through this method which should increase now. Many countries have achieved great milk production boost through ‘progeny testing programme, he added. 14
SAARC OILS & FATS Today, March & April 2012
Planning Commission member Prof Abhijit Sen, who was the chief Guest, agreed with Dr Bhasin and said the 12th Plan would aim at a “not-too-hugely optimistic” goal of taking the current milk output from 115-116 million tonnes to 150 million tonnes or so in the next five years. This has to be done by increasing yield levels, because that is the surest way of keeping costs down. On the issue of productivity, Prof Sen said the focus should be on three areas – fodder, much better progeny testing, and much better management of the entire milk production system. Milk prices Prof Sen noted that prices of milk and of all animal products in the past two-three years had increased much more than the wholesale price index. “This is an area which we have to concentrate on.”
Dairy Industry Many dairy experts and dignitaries were present to discuss the strengths, shortcomings and future strategies of India’s dairy sector at the conference organized by IDA. Prof. Abhijit Sen and Dr. N.R. Bhasin lit the inaugural lamp in the presence of several dignitaries. In his address Dr. Bhasin expressed a sense of national pride over India becoming the highest milk producing country in the world. “The country produced 112 million tonnes of milk during 2009-10 and is expected to produce 116 million tonnes during 2011-12.”. Noting the progress of India’s milk production, he said the milk output in 1970 was only 20 million tonnes and now it is over 115 million tonnes. “We have 127 million adult breedable female buffaloes and cows which are fed mainly agricultural residues and by-products.” But he also warned that since demands are increasing with unprecedented pace, production and productivity must increase as well. National Dairy Plan He told the gathering that a mega initiative has been initiated by NDDB through National Dairy Plan financed by the World Bank. The first phase of NDP will be implemented during 2011 to 2017. The Rs. 2000-crore plan has objectives like helping increase the productivity and fodder development, linking animal breeders to the orgainsed milk processing sector and implementing ‘progeny testing programme’. He also expressed the need of giving priority to the main milk producing areas and help breeders to double the productivity. ”36 per cent households in these 14 major milk producing states is just 500 litres per annum while another 27 per cent households
are producing 500 to 1000 litres per annum. Only 15 per cent households are getting 2000 litres per annum. Our plans should help the first two groups to achieve the output of the third group,” he said. Dr Bhasin also talked about processing and value addition, increasing credit to dairy sector and reduction in interest rates, export boost of oil meals and cakes, banning the burning of wheat and paddy straw, remunerative prices to milk producers and increasing the allocation of RKVY fund to dairy sector by at least 30 per cent from current 10-15 per cent. On the impact of FDI on milk production, he suggested, an indepth study on it by NDDB and dairy co-operative institutions. Self-sufficiency Prof. Abhijit Sen, in his inaugural address, praised the speakers for their amazing expertise on the dairy segment and agreed that interest rate should be pruned for the breeders and the tariff rates should be imposed on export of oil cakes. He also agreed with Bhasin on latter’s other workable solutions. He told the gathering that he is personally urging ministers of finance and commerce to help the sector in boosting supply to meet the increasing demands in the cities. He stressed the need of self sufficiency in milk sector by using the methods outlined by Dr. Bhasin and other experts. He also said that the government should study all pros and cons before allowing FDI in retail as it would have an impact on dairy sector. He added while he would not take any position on this issue. “It is also true our milk producers get a much higher share of what the consumers pay for milk than almost anywhere in the world. That in this sector,
March & April 2012, SAARC OILS & FATS TODAY
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Dairy Industry
Dr. N. R. Bhasin delivering the Keynote address
Welcome address by M.P.S. Chadha
the new technology and investment that comes with FDI requires scrutiny”. “We are the cheapest milk producers in the world and as such we do not start importing unless the cost of production is expected to rise very highly. No country which is planning into the future can allow it to happen,” he said. He also warned that the cost of production should not be allowed to rise. Only the milk production should rise. “The aim should be self-sufficiency”. He said that the 12th Plan aims to cut the production costs and increase the milk production and pass on the benefits to the producers. “I am not an expert on this sector, but as someone overseeing the Plan, I need to share the problems and solutions of this vital segment“.
The 12th Plan will go ahead with National Dairy Plan.” The first thing that NDP seeks to do is the delivery of productivityincreasing inputs, not through The Animal Husbandry Department, not through the veterinary system, but through the dairy sector. .It is a fundamental thing to focus on cooperatives and producer companies to boost the production by increasing the productivity. Small farmers have to be contacted and the problems faced by them and the cooperatives need to be ended by active government intervention,” he said. He also expressed the need for inculcating a much greater discipline for progeny testing and protocols for artificial insemination. On fodder development and better feed management, he said the new programme would have these as a major component. States would be involved for this purpose through Rashtriya Krishi Vikas Yojna (RKVY). Consumption doubles Earlier, in the welcoming address, M.P.S. Chadha, Chairman, IDA, said the significance of dairy sector in India and Asia is twofold. First, it is growing. Because of rising prosperity in the urban areas, consumption of milk and milk products is increasing. Figures show, the consumption in Asia and India has doubled in the last 25 years. Nearly 80 per cent of these gains have been in South Asia, which accounts for 20 per cent of global milk consumption.
Growth rate Complacency, according to him, is the main reason behind not being able to increase the production. “We slipped into a sense of complacency as we have been registering four per cent production growth annually. But the growth slipped soon to 3.7 per cent and prices of the milk and milk products began to increase sharply in the last few years. The 12th Plan is based on this fact. “Now, we will try to achieve the productivity increase in the next five years while keeping the costs low to increase production from 115 million tonnes to 150 million tonnes.”
Address by Chief Guest Prof. Abhijit Sen
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SAARC OILS & FATS Today, March & April 2012
Presentation of memento to the Chief Guest
Dairy Industry
Mandava Janaki Ramaiah receiving ‘Dr. Kurien Award’ from the Chief Guest, Prof. Abhijit Sen
It is expected that China and India alone will contribute more than 30 per cent of global output in 2020. The second important factor is the expectation of the community of dairy farmers. But the dairy sector has also been affected negatively by the inflation. To address this issue, the government has banned exports of milk products and allows selective import. But the rising cost of feed and other inputs are becoming a concern. He said that this 40th conference was organized by IDA to address all the issues related to this segment. Those attending the conference included farmers, entrepreneurs, administrators, scientists and policy makers and exhibitors. The focus of the Conference was “Indian Dairying: Perspective 2020”. Delegates and exhibitors came from many states, while foreign participants were from South East Asian countries, UK and US. Chadha said that a keen interest from MNCs in Indian dairy sector was very much visible at the conference. They want to develop this segment. Proposing the vote of thanks, Dr. R. S. Khanna, Secretary General, XL DIC, said growth of Indian dairy industry is a global success. The National Dairy Plan- 1, he said, is expected to cover 14 states, which account for nearly 90 per cent milk production, 87 per cent of breedable animals and 98 per cent of total fodder produced. He cited three important components to boost productivity. These are: setting up of an effective infrastructure to produce high genetic merit bulls through progeny testing, fodder development through production and distribution of seeds and creation and
Dr. J.B. Prajapati receiving the Fellowship Award from the Chief Guest
strengthening of rural based milk procurement organizations for easy access to the producers. Awards The chief guest gave away awards to those who have done signal service to the dairy industry. Following is the list. Dr. Kurien Award was given to Mandava Kanaki Ramaiah. He has been instrumental in promoting the cooperative development movement in Andhra Pradesh. Patronship Award was given to renowned scientist Dr. R. Nagarcenkar for his outstanding services to further the cause of Indian dairy association and the growth of dairy industry. IDA Fellowship 2012 was awarded to Dr. J.B. Prajapati as tribute to his services to IDA and the Indian dairy industry. The Best Exhibition stall awards went to GCMMF Ltd, Mother Dairy Fruits & Vegetables, Everest Instruments Pvt Ltd, Benny Impex Pvt Ltd, Indian Dairy Equipment Co. Ltd, KK Cans & Allied Products Pvt Ltd, Vansun Tehnologies, Chadha Sales Pvt. Ltd, ISF Industries Pvt Ltd, IDMC Ltd, Goma Engineering, GEA Process Engg, Terra Pak India, ADEPTA, France, Pentair Clean Process Technologies and Ayurvet Ltd. Sessions On the sidelines of the exhibition were held a farmer session, ten technical sessions, five scientific sessions and one industrial session. Experts discussed small and major problems and hurdles of milk sector and tried to work out possible solutions.
The Chief Guest releasing the Souvenir in the Inaugural Session of the Conference
March & April 2012, SAARC OILS & FATS TODAY
17
Bio-fuel
Bio-fuels lead toward green economy: A report Steen Riisgaard, CEO of Novozymes
A recent Finance report financed by Novozymes has discovered a strong connection between bio-fuels and green, prosperous economy. The research titled ‘Moving towards a next generation of ethanol economy’ puts the perspective in the proper direction. The finance report said that the governments need to transform agricultural residues into bio-fuels, and by doing so, they can create millions of jobs and save the planet from ecological damages through minimizing emission of green house gases. Novozymes is a major global player in bio innovation and industrial enzymes. It predicted the world will have energy security by 2030 if it takes this opportunity seriously. The report said that this process must be initiated in developing countries such as India, China, Brazil and Argentina. The US and EU-27 should also initiate the process of this transformation. 18
Sustainable growth demands transforming of agricultural residue into bio-fuels. It is a global necessity . . .
The report hopes that the world’s 50 per cent gasoline needs can be met by this transformation by 2030. According to an estimate, nearly 17.5 per cent of the agricultural residue can be used for this purpose. Speaking positively on the topic,
SAARC OILS & FATS Today, March & April 2012
Steen Riisgaard, CEO of Novozymes, said that the sustainable growth demands transforming of agricultural residue into bio-fuels. It is a global necessity and will benefit the countries by creating a lot of jobs. Apart from this, this will not impact the crop pattern or agriculture negatively. The report said, “It is an opportunity that the world should not bypass. The world needs to become energy-secure and be less-dependent on fossil fuels. It will also make economies green and clean”. These countries can better farmers’ condition by giving them an opportunity, teaching them about the process and providing them necessary loans and help to make the whole thing easy and smooth. According to the report, about 8 parts of the world alone can generate revenues worth $ 1 trillion to $ 4.4 trillion within a couple of decades. Depending on the works and population, nearly 3 million jobs can be created in China alone. The climate concerns will come down as biofuels produce 80 per cent less greenhouse gases than conventional fuels. The report strengthens the fact that innovation is the need of the day in all fields to secure the world from several worries. Riisgaard said, “As many countries are facing unprecedented problems due to shaky economy and lack of jobs, this idea must be executed with utmost seriousness and speed. As sustainable development is the watch word in the developing countries these days, this advanced bio-fuels opportunity will produce inclusive growth, climate and job security. It will end the plight of the farmers. Bio-products and bio-fuels will minimize the world’s dependence on fossil fuels to a great extent”. The report also said that a number of people and sectors will get benefited from this transformation. It will build economy
Bio-fuel
Oceans’ bio-mass can reduce dependency on food crops for bio-fuel ‘India Bio 2012’, India’s largest Biotech event was organized jointly by the Department of Information Technology, BioTechnology and Science & Technology, Government of Karnataka recently in Bangalore. The conference featured a session on Biofuels and Green Chemicals. The session was chaired by Shrikumar Suryanarayan, Chairman, Sea6 Energy; Hon. Director General, ABLE. The list of speakers included Dr Syed Shams Yazdani, Group Leader, Synthetic Biology and Biofuel Group International Centre for Genetic Engineering and Biotechnology (ICGEB), Sayash Kumar, Co-founder & Acting CEO, Sea6 Energy, Dr Ashvini Shete, Senior Staff Technologist, Praj Matrix -The Innovation Center, Praj Ind Ltd. and Dr Santanu Datta, Vice President, Cellworks Research India Pvt. Ltd. Shrikumar Suryanarayan introduced the speakers and began the session. Dr Syed Shams Yazdani spoke on “Molecular approach for development of cost effective second generation bio fuels”. He started his talk by projecting the amount of biomass consumed every year which is estimated to be 540 million tonnes, and only about 50% is used and current oil consumption in India is approximately 110 billion litres. He emphasised on the fact that the bio fuel produced should be more cost effective which involves the combined efforts of engineering, molecular biologist and biotechnologist to achieve this mile stone. He also said at present there are many micro-organism being used who have a ability to digest the biomass on short time with high concentration of ethanol been produced with minimum expenditure. He supported his view with ball worm as an example which attacks cotton plant and these worm have microorganism in their gut which can degrade cellulose to simpler forms, engineering these microbes which would have the gene responsible for cellulose degradation, so that they be utilized to have large scale production for these enzymes, which can be used for fermentation process. Finally, he concluded that bio fuel is need of the hour provided that they are produced at low cost with use of easily available micro-organism. Sayash Kumar spoke on “Bio fuels from Oceans”. He started with introducing the different forms of energy available, compared their utilization by different countries and their GDP and empower farmers and the youth of the country. Talking about the process and difficulties, a source said that the necessary technologies have already been developed which can change agriculture residue into bio-fuels. Apart from this, a variety of other advanced bio
growth with respect to their energy sources and utilization. He pointed that 2/3rd of the crude fuel is imported by India. Sunlight is the ultimate renewable resource with 86,000 terawatts in which only 15 terawatts is utilized, other source of bio fuels is cellulose derived fuels like alcohol. But using crops for extracting fuels from sugars and starch would not be feasible as it may lead to shortage of food. At same time monotonous crops cannot be grown on the waste agricultural lands as it leads to ecological imbalance. And the amount of fuel requirement would double by 2030. So to overcome this, he said, they are working on the project to utilize the sea shore of India which is conducive with optimum temperature of 29 degree Celsius and plenty of sunlight. So trapping the oceans by growing genetically engineered sea plants like algae and recovering these algae as biomass would solve two main problems, one is utility of agricultural lands for producing biomass for bio fuels. Dr. Ashvini Shete spoke on “Cellulose hydrolysis and xylose fermentation: Challenges and opportunities”. She started her talk stating that there is a shift of choice of substrate from sugary to bio gas which is said to be efficient in the production of bio fuel the ethanol. She concentrated more on the industrial point of view and explained the different approach to follow by industry for large scale production of ethanol. She showed different challenges faced by the industry during the selection for biomass, processing of this biomass and the product recovery. She concentrated on two different aspect of ethanol production namely cellulose hydrolysis and xylose fermentation. Both of them have many parameters which should be followed for the production ethanol. Comparing these two processes xylose production is cheaper and more effective. She also stressed on the fact that many industries are nowadays using yeast as co-fermentor as it helps in easy fermentation. Panelists were of the opinion that there is a bio fuel policy in India but there is no enough alcohol to fulfill the demand, and also the price fixed is too low at Rs. 27, which is very less in comparison with its production cost. They also mentioned that the urban wastes just accounts for 10 per cent of the total Biomass and needs more treatments, so is mainly used to produce biofertilizers.
products such as plastics and chemicals could also be produced based on the same agricultural residue. The report further said that the potential is solid, but the governments need to orient themselves towards this newness for a better future. It suggested that several barriers in terms of feedstock
supply chain, poor infrastructure and high investment should be dealt properly. The industry cannot function without active support from the government. Policy makers need to understand all such issues and create awareness among all the participants and offer friendly offers like tax breaks. n
March & April 2012, SAARC OILS & FATS TODAY
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Milestone
India’s rice production touches 100 MT mark — T. Nandkumar, Former Union Agriculture Secretary
India has just recorded a production of 102 million tonnes of rice this year, up from 96 million tonnes last year, and up from the all-time high of 99 million tonnes in 2008-09.
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Important Landmark Why is this important? First, rice is a staple diet for a large number of poor people in India, particularly in southern and eastern India. Hunger and malnutrition is comparatively higher in most of these regions. An increase in production, resulting in adequate supplies, will keep prices under check, and increase access to their preferred food. Second, at the macro level, it is difficult (almost impossible), to import rice in times of shortage. The global rice trade is small, approximately 30-35 million tonnes, of which almost half is high-priced rice like Basmati and Thai scented rice. If India or China enters the market to buy rice, it can send prices soaring to astronomical levels. India, therefore, cannot afford a shortage of rice at any point in time. Third, this growth has been led by the eastern region. Bihar and Jharkhand have recovered from a drought last year with bumper harvests. The performance of states like Bihar, Uttar Pradesh, Orissa, Chattisgarh, Jharkhand, and West Bengal has been better than their previous best. This is proof that there is a resurgence of agriculture in these regions, and that the new initiatives like Rashtriya Krishi Vikas Yojana (RKVY), National Food Security Mission (NFSM), and the Eastern India Agriculture Initiative, are working. This is an encouraging development from a national point of view, since current levels of rice production in Punjab aren’t sustainable. Abundance of water and the potential to increase productivity in Eastern India has long been recognised. However, the breakthrough didn’t come for a variety 20
SAARC OILS & FATS Today, March & April 2012
Bengal’s rice mills face capital crisis
early 1000 rice mills in Bengal are currently facing a severe cash problem due to the sinking of the prices below minimum support price (MSP), according to millers. The obvious reason behind this crisis is attributed to over-dependence on the open rice market. In older market system, the government bought nearly 20 percent paddy (dhan), which freed rice mills from cash involvement. The government’s co-operatives procured it at MSP directly from farmers. Then, it was its responsibility to change it into rice which it did by paying milling charge to various rice mills. But now, this system no longer exists, and the new system is very much open to market risks. This time, the mills procured paddy from farmers at the usual rate of Rs.1080 per quintal. Since the milling charge is Rs.65 per 100 kg of paddy, the mills registered loss of nearly Rs.100 per quintal, as it had to sell rice at the prevailing rate of Rs. 1500 per quintal. This suicidal economy put them in worrying condition financially. Expressing his views on this grim scenario, President, Arambag Rice Mills Association, Dhirandranath Roy said that the condition is in such a terrible shape that rice mills have no money to buy more paddy. “It certainly warrants government attention”, he said. Since there are no middlemen now, rice mills cannot procure any loan from any quarter. To arrest further loss, the mills are not releasing any more rice in the open market. This has left them in red spot. Arambag, which is hub of rice mills, has reported 40 percent less production of rice this season. The state government’s sudden move to terminate the licenses of 500 cooperative societies and banning middlemen has put the rice mills in the troubled spot. The arotdars or middlemen provided cash whenever these mills needed it. The mills were asked to pay farmers through cheques to end cash-based transaction. A mill owner said the government loved to reform the whole chain system, but it failed to foresee such problems which might appear in such cases. This is basically a policy fallacy. Since, the cash flow dried up, the rice mills are now left with no option but to withhold the rice selling and paddy buying activities. This has put a chain-like hurdle in many sections of this industry. The government pays very late for its procurement, which also affects the poor capital condition of these mills. The 15 or 20 day delay in payment has been a matter of worry for all rice mill owners. The “state’s apathy” could be guessed from the statement made by State Food and Supplies Minister J Mallick. He said, “This is a matter of rice mills, and the government has no role to play”. He only promised to clear government’s dues and nothing else. This has put off any sign of hope of a government intervention to save the rice mills from this cash crisis.
Milestone of reasons, including low seed replacement ratios, low and injudicious application of fertilisers and poor extension services, among some other factors. Challenges Ahead Sustainable increase in productivity: It isn’t enough to achieve a productivity increase in one year and revert to the previous level the next year. 100 million tonnes has to be the benchmark. A moderate increase compared to the previous year’s production has to be the mantra for the coming years. It is, therefore, 100-plus million tonnes, year after year. This isn’t easy. Given the vagaries of the climate, and the competing priorities for farmers, this would be quite a challenge. Continuous attention to water management, timely availability of quality inputs, and farmer-friendly extension services will have to be provided. Ensuring remunerative prices: Most farmers are aware that higher production results in a glut, and a consequential drop in prices. The Minimum Support Price (MSP) mechanism is expected to take care of this. Theoretically, the Commission on Agricultural Costs & Prices (CACP) takes care of this in their recommendations. The Union Government has generally accepted the price recommendations of the CACP, sometimes improving upon them. The catch, however, is in the implementation. There are reports that farmers in some regions don’t get the MSP, and are forced to sell at prices that are much lower. CACP itself is on record saying that, in some regions, this is the actual situation. Unfortunately, most of such regions are in eastern India,
where we want to see significant growth in agriculture. The Centre expects the States to do a substantial part of the procurement under MSP, and the States expect the Food Corporation of India (FCI) to do more. For the farmer, it doesn’t make a difference. He gets paid much less than what he is entitled to. This failure to ensure MSP could well be counter-productive for plans to sustain the growth of productivity in rice. Want of infrastructure: One of the most important reasons for low productivity is absence of infrastructure. Most of these regions where production is expected to increase don’t have adequate warehousing either in the private or public sector. This causes great difficulties for procurement agencies, companies and individuals who intend to buy paddy in these regions. Also, poor farmers don’t get any space to store their crops, thereby forcing them to make distress sales. Even the new Warehousing Development & Regulation Act, which enables issue of fungible warehouse receipts, won’t help these farmers, since they will have no access to a warehouse. So is the case with roads. In the absence of all-weather road connectivity, procurement and large private purchase is impossible. The inadequacy of rice milling infrastructure in these states is often ignored. The non-availability of power could prove to be a game-spoiler in a year of erratic rainfall. Quite often, the infrastructure for inputs, namely, seed sellers, fertiliser depots, bank branches, is ignored. So, let us celebrate this hundred, but also commit that we will do all that is necessary to ensure this performance, year after year. n
March & April 2012, SAARC OILS & FATS TODAY
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Rapeseed
SEA crop survey
Rapeseed output likely to dip
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espite a marginal increase in yield, rapeseed-mustard output this year is expected to decline by nine per cent. The dip in production in attributed to a 10 per cent drop in the area under the crop. A crop survey carried out by the Solvent Extractors Association of India (SEA) has projected the rapeseed-mustard production at 62.65 lakh tonnes against 68.50 lakh tonnes in 2010-11. The crop area this year is estimated at 65.83 lakh hectares this year against last year’s 72.47 lakh hectares. Some news to cheer is a marginal increase in yield per hectare --- 952 kg against 945 kg last year. . The survey, carried out by four teams comprising 30 members, visited the major rapeseed-mustard growing areas in Gujarat, Rajasthan, Haryana, Uttar Pradesh and Madhya Pradesh. Members of the survey team included crushers, oil millers, and representatives of multinational companies, agronomists and analysts. One team also visited the
— Bureau Report National Research Centre on RapeseedMustard at Bharatpur and met the scientists to seek their views on the current crop. . The survey has found wide variation in the area reported by Gujarat and Rajasthan. The association, however, has gone by the area projected under the crop according to Government record. The solvent extractors’ body said that due to late sowing this year and high temperature in December, the crop has been delayed by 15 to 20 days. Cold weather has played spoilsport by damaging the standing crop in Gujarat and western parts of Rajasthan, besides other parts of Rajasthan. “The exact damage will be reviewed after the crop is harvested,” the association said in a statement. Rapeseed-mustard is the main Rabi oilseeds crop and a lower production means that the total oilseeds production could drop this year, leading to higher vegetable oil imports. According to the Agriculture Ministry,
Note: Torial is a kharif crop mainly grown in U.P. and estimated at 2.00 lakh tonnes.
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SAARC OILS & FATS Today, March & April 2012
production of nine major oilseeds this season that ends in June is likely to be 305.2 lakh tonnes against 324.7 lakh tonnes last season. The second advance crop estimates released by the government has projected the mustardrapeseed production at 75 lakh tonnes, against 81.7 lakh tonnes a year ago. According to the SEA survey, the major contribution will come from Rajasthan against this year. With 25.30 lakh hectares covered under the crop, against 27.21 lakh hectares last year, production is likely to be 29.35 lakh tonnes, against 34.75 lakh tonnes in 2010-11. Uttar Pradesh has done well with its acreage increasing by 50,000 hectares and production by two lakh tonnes, to 10.50 lakh tonnes. The yield level in the state is also likely to be higher by 150 kg at 1,000 kg per hectare. SEA said that it will come up with its final report at the Rabi seminar to be held by the Centre Organisation for Oil Industry and Trade on March 18.
Rapeseed Team - 1: Area Surveyed
Team - 2: Area Surveyed
Team - 3: Area Surveyed
Team - 4 Area Surveyed M.P.
March & April 2012, SAARC OILS & FATS TODAY
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Soya
Production of Soyaflour – Full Fat, Medium Fat & Defatted — Dr. S D Kulkarni and Dr. L K Sinha Project Director and Principal Scientist, Central Institute of Agricultural Engineering, Bhopal, M.P.
The nutritional potential of soybean can be exploited for the benefit of the masses only when a cost-easy processed product from soybean is developed and made available in the market. The various soy flours are high in protein content and can be supplemented with the existing cereal or pulse-based ingredients in the diet up to 15-20%. The details of various soy flours are presented.
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SAARC OILS & FATS Today, March & April 2012
Full fat soyafiour (FFSF) Full fat soyaflour is essentially a product of soybean dehulled, blanched and milled to flour. Identification of processing route is important. The product, which retains oil and other desirable constituents of soybean, can be prepared by either of the three processing routes i.e. wet, moist and dry heat treatment. Each processing route gives full fat soyaflour as the product. Urease activity is taken as the indication of inactivation of antinutritional factors. Depending on the requirement of product quality (inactivate antinutritionals and off flavour causing enzymes prior to their action, unfolding of protein structure for improved digestibility, good functional quality [NSI], product preference) and other considerations, the processing route and parameters can be identified. Product quality varies appreciably with the processing approach. Soyabean grain parts do not contribute in a same way nutritionally. Based on the requirements and considerations, in general, the unit oprations include soyabean cleaning / grding – dehulling and splitting – heat treatment- drying / cooling- milling–sifting packing. The wet heat process, as detailed below is recommended for the reason of uniformity of heat treatment. Quality considerations include quality and quantity of water, heating time to gain temperature after addition of splits to boiling water, energy requirement and source. Machine -Cleaner - grader, soyabean dehuller, Blancher, dryer (if sun drying option is not to be used). However, different approaches are presented. Hot Water Blanching Method: The steps involved are detailed as: l Cleaning of soybean to remove
Soya l l
l
l l l
impurities, immature and damaged grains Drying in sun or oven Dehusking / spliting by adjusting clearance in commercial chakki as is done in Bengal gram dal making. Taking one kg dal to 3 litre of water as proportion, first boil water and then add soyadal to it and continue boiling for 30 minutes. Drain the water after boiling and dry the splits. Processed soyasplits are ready for: Mixing with cereals in the proportion of 1 kg processed soy splits and 9 kg cereal (wheat, Jowar or bajra, etc) for milling to get protein enriched cereal flour OR
l milling in chakki and soyaflour obtained can be mixed with cereal flour in the proportion of 1 soyaflour : 9 wheat flour to get protein enriched cereal flour. Uses of full fat soyaflour: Properly processed soyaflour can be mixed with cereal flour in the proportion of 1 soyaflour: 9 wheat flour to get protein enriched cereal flour and used for preparation of chapati, poori, paratha, etc. and in bakery products. Alternatively the soyaflour can also be mixed with besan in 1:1 proportion and used in preparation of conventional snack foods like sev, chakli, pakoda, etc. Shelf-life: The shelf life of packed soyaflour in polythene packet is up to 2 months. However, after opening of the packet, it should be consumed within 15 days irrespective of opening it after one month storage or 15 days storage. Caution: Use of unprocessed soyabean is not recommended for Health reasons. Full fat soyaflour by moist heat Steaming of 1-2 hour soaked soyabean / splits at 1 kg/cm2 for > 10 min. Quality considerations include quality and quantity of water, soaking duration, time to gain steam pressure, energy requirement
and source, duration of process. Machine –pressure cooker / boiler, steaming unit, dryer (solar / mechanical). Full fat soyaflour by dry heat Roasting/Extrusion cooking of soyabean is a major step. Quality considerations:Precise control of process duration and temperature, roaster / extruder - time to gain temperature of processing (raw material loss), energy requirement and source, duration of process. Machine - Boiler, roaster, extruder, cooler, etc. The processing steps: The first step in any food processing is getting good quality raw material. It is a known fact that good quality raw material can only produce good quality end product. The raw soybean when procured in the season should be cleaned thoroughly to remove the broken, shriveled grain dirt, dust, infested grain, etc. and then should be stored in an air tight metallic bins on the raised platform so that moisture migration in the bin should be minimal. The safe storage moisture content for food uses is 8% hence soybean should be dried before storage in the open sun if required. The next step in processing is hull removal. Unlike other grains, the hull is very loosely attached with, soya seed and simple rubbing mechanism can separate the hulls from cotyledons. This can be done by hand operated burr mill as available in the villages or can be done in the burr mill or in the special equipment called dehuller as developed at CIAE exclusively for this purpose. As we know that be, any flavour sets in when the mechanically injured grain comes in contact with the oxygen in the presence of moisture, even the moisture in the air, hence it is necessary that dehulling shquld be performed such a way that we get minimal broken. The dehuller equipment developed for soybean produces minimum broken hence it is recommended for commercial operations. It is also recommended that dehulling is done just before the blanching operation so that dal or splits are exposed minimum to atmosphere moisture. The next operation of blanching is very important as be any flavour as well as anti nutritional factors are removed during
this process. The soyadal is poured in the boiling water and cooked further for 30 min. When the raw soyadal is poured in the boiling water the resultant temperature of the mixture is around 85°C, which stabilizes the activity of the lypoxigenase enzyme, which is responsible for setting up of the be any falvour. Further cooking for 30 min removed the antinutritional factor like trypsin Inhibitor activity to level of 15 to 20%, which is safe for using the soyabean, in uses as making chapatti, etc. After blanching though the blanched dal is fit for human consumption it has moisture content of 60% wet basis and needs drying for further storage. The processed soyadal or Splits at moisture content of 6% can be ground into flour by ordinary burr mill. However due to 1820% oil content present in the product the capacity of the mills is drastically reduced and requires frequent cleaning due sticking of materials to the burr plates. It is therefore, suggested that 10% soyadal may be mixed in 90% wheat or other cereals before grinding for ease of grinding. Additional advantage of storing the processed dal for future use is its better’ keeping quality compared full fat soyaflour. Medium Fat Soyaflour As the name implies, once oil is taken out from the soybean mechanically and then cake is milled to flour. It has different nutritional composition compared to full fat soyaflour. Unit - operations include: soybean cleaning / grading, coarse grinding to grits, dry extrusion, expelling (oil expression), oil filtration, size reduction of cake, sifting, packaging. Quality considerations:Precise control of process duration and temperature of heat treatment, raw material moisture content and particle size, duration of process. Machine: Extruder and expeller, grinder, etc. This can be achieved by partial removal of oil from soybean (Fig 1) before it is ground in to flour. To extract the oil from soybean - the hard seed-from mechanical screw press is difficult without adversely affecting the quality of cake. This is achieved by the process of extrusion to the raw soybean. The oil obtained is of very good quality and only after physical refilling it can be used for edible purposes.
March & April 2012, SAARC OILS & FATS TODAY
25
Soya The cake obtained is having very good yellow light colour of the soybean devoid of antinutritional factors. After cooling the cake is ground by hammer mill to produce medium fat soy flour useful for supplementation of conventional and other foods. Defatted Soyaflour The defatted soyaflour as the name suggests is the soyaflour devoid of fat. This is possible only by chemical extraction of the soybean (Fig.-2). The process warrants maintaining the strict hygiene in the existing solvent extraction plants and use. of flash dryer along with desolvetisers to remove even the traces of solvent in the defatted meal. The soybean is thoroughly cleaned in the preparatory unit. The soybean after drying to desirable moisture content is cracked between the cracking rollers to get about 6-8 pieces of soybean. The hulls are aspirated and grits are conditioned with application of steam to 12% moisture content. These soft and partially cooked grits are passed through 2 flaking roller so that the flakes less than 0.3 mm thickness are obtained. These flakes are then fed to continuous extractor where the hexane as a solvent is sprayed on it. The hexane percolates through the bed of flakes and extracts the fat from it and is collected at the bottom as the mixture oil and solvent. By the time the flakes come out of the extractor almost all the oil -over 99% is extracted from it. The deoiled flakes however contain some solvent in the soaked form, hence they are subjected to toasting by application of steam at high temperature to evaporate the solvent from the flakes. The flash dryer is also used in addition to the toasters for guaranteed removal of the solvent from the flakes for use in edible products. The deoiled and desolventied flakes are then milled in hammer mill to get defatted soyaflour. The advantage of this product is that the whole process is done under mild heating hence the protein available in the flakes is having high functionality and can further be used for production of textured soy protein. However, if it is to be used for adding into wheat flour and besan as in case of other type of soy flours then little more severe toasting is required to remove the antinutritional factors. The oil stream obtained from the process is 26
processed separately to get refined oil after physical and chemical refining.
The nutrient content depends upon the type of soyaflour (Table 1)
Table 1: Protein and fat content of different types of soy flour Soyaflour type
Protein, %
Fat, %
Full fat 38-40
19-20
Medium fat 48-50
5-6
Defatted
0.5-1
52-53
Raw Soyabean Cleaning Dehullig Milling to get grits Dry extrusion cooking of grits Oil expression in expeller
Soya oil
Partially defatted cake
Filtration
Cooling/drying
Chemical free refined oil
Grinding Medium fat soya flour Fig. 1: Extrusion expelling process for production of medium fat soyaflour Raw Soyabean Cleaning Dehullig/Cracking Grits Conditioning grits with steam to 12% M.C. Flaking in Flaking rolls
Oil + Solvent
Oil extraction by solvent (Hexane)
Distillation
Deoiled flakes
Oil
Solvent
Desolventising/Toasting/Flash Drying Physical & Chemical Refining Defatted soya flour
Refined soy oil
Grinding Fig. 2: Process of production of edible equality defatted soyaflour
SAARC OILS & FATS Today, March & April 2012
Floriculture Today December 2011 47
Research
Raw milk causes disease outbreaks : US research study
R
aw or unpasteurized milk can cause 150 times more dairy product-related disease outbreaks than pasteurized milk. And states where the sale of raw milk is legal have twice as many outbreaks as states where it is illegal, according to a new U.S. Centers for Disease Control and Prevention study. “This study shows an association between state laws and the number of outbreaks and illnesses from raw milk products,” Dr. Robert Tauxe, deputy director of CDC’s division of food borne, waterborne and environmental diseases, said. The 13-year review looked at more than 120 dairy product-related outbreaks that occurred in 30 states between 1993 and 2006. The outbreaks caused more than 4,400 illnesses, 239 hospitalizations and three deaths. Raw milk products -- including cheese and yogurt -- caused 73 of the outbreaks (60 percent) and most of the 239 hospitalizations. Some people mistakenly believe that raw milk is a healthier alternative to pasteurized milk, according to the U.S. 28
Food and Drug Administration. Its website debunks the notion that raw milk is less likely than pasteurized milk to cause lactose intolerance, an inability to digest milk products. Unless milk is pasteurized -- heated to kill harmful bacteria -- bacteria can accumulate in collected milk, multiply and cause illness, the researchers said. The study found that 13 percent of patients in raw milk outbreaks were hospitalized, compared with 1 percent of those made ill by pasteurized milk products. This may be because raw milk outbreaks were all caused by bacteria, such as E. coli O157, that tend to provoke more severe illness, according to the study. On the other hand, pasteurized milk and cheese outbreaks were often caused by milder infections, such as norovirus and Staphylococcus aureus. Fifty-five of the outbreaks reviewed occurred in the 21 states where it was legal to sell raw milk at the time, the CDC found. Young people were much more likely to get sick from raw milk products than pasteurized items. Where ages were available, people younger than age 20
SAARC OILS & FATS Today, March & April 2012
accounted for 60 percent of patients in raw milk outbreaks, compared with 23 percent of patients in pasteurized milk outbreaks. The study appeared on Feb. 21, 2012 in the journal Emerging Infectious Diseases, published by the CDC. It’s impossible for consumers to tell if raw milk is safe to drink by looking at, smelling, or tasting it, the CDC said. “Restricting the sale of raw milk products is likely to reduce the number of outbreaks and can help keep people healthier. The states that allow sale of raw milk will probably continue to see outbreaks in the future,” Tauxe said. Study co-author Barbara Mahon, deputy chief of the CDC’s Enteric Diseases Epidemiology Branch, said, “While some people think that raw milk has more health benefits than pasteurized milk, this study shows that raw milk has great risks, especially for children, who experience more severe illnesses if they get sick”. “Parents who have lived through the experience of watching their child fight for their life after drinking raw milk now say that it’s just not worth the risk,” she added. n
Castor
C
astorseed production this year’s season to October is likely to be 36 per cent higher, thanks to a 34 per cent rise in crop acreage. But a 3 per cent drop in the yield has capped further gains in production, according to a study conducted by Nielsen for the Solvent Extractors Association of India. According to the study, with area under castor increasing to 11.5 lakh hectares (lh) from 8.6 lh, production is seen rising to a record 16.19 lakh tonnes (lt) from 12.5 lt a year ago. Gujarat, which accounts for over half of the area under castor and nearly three-fourths of the crop produced in the country, will see its production increase 36 per cent to 12.26 lt (9 lt). However, yield is seen dropping by 6 per cent this season. Area under the crop this season has increased to 6.97 lh from 4.83 lh a year ago. The solvent extractors’ body said area under the crop rose by over 50 per cent in Kutch, Surendranagar, Vadodra and Patan districts. Lower yield in Gandhinagar and Sabarkantha districts has capped production gains. According to the Solvent Extractors Association, the projections have been made after three rounds of pickings. Two more pickings will take place in April and May before a final figure on the crop can be arrived at, a statement issued by it said. Limited Gains Another major factor for this year’s improved production is the performance of Rajasthan where output is likely to top 2 lakh tonnes. In fact, the study has estimated a production of 2.07 lt from 1.69 lh against 1.8 lt produced from 1.27 lh last year. Things could have been far better in the north-western State but for a 14 per cent drop in yield to 1,222 kg a hectare. The association said area under castor has increased in all growing
Higher sowing may raise castor seed output
districts — Barmer, Jalore, Jodhpur, Pali, Sirohi. The yield is lower this season due to inadequate rainfall during growth state of the crop coupled with dew and water shortage, it said. Though the area under castor has increased by 16 per cent to 2.3 lh in Andhra Pradesh this season, a poor yield of 677 kg a hectare is capping the production gain to 11 per cent at 1.56 lt. An indifferent monsoon is one of the reasons for the poor yield in the southern State, where other crops such as cotton and pulses have also suffered. “This year, all castor-growing districts received rain that was 25 per cent lower than the average rainfall. Last year, it was 36 per cent higher than average,” the Solvent Extractors Association said. Castor is grown in Anantapur, Kurnool, Mahbubnagar, Prakasam and Rangareddy districts mainly.
Contribution from the rest of the country is seen almost unchanged in terms of area, production and yield. Shipments India’s castorseed production makes up 65 per cent of the global output, while it makes up 51 per cent of the castor oil production. At least 75 per cent of the castor oil produced in the country is exported, mainly to the US, Europe and Japan. Castor oil is an important raw material for industries manufacturing soap, surface coatings, cosmetics, pharmaceuticals, perfumes, greases and lubricants. During the April-January period of the current fiscal, 3.24 lt castor oil have been exported worth Rs 3,204.48 crore. During the entire fiscal last year, exports were 3.43 lt valued at Rs 2,362.46 crore.
Crop Outlook State
2010-11
Gujarat 4.83 Rajasthan 1.27 A.P. 198 Others 0.52 Total 8.6
Area* 2011-12
% Change
6.97 44 1.69 33 2.30 16 0.54 3 11.50 34
2010-11 9.0 1.8 14 0.30 12.50
Production* 2011-12 % Change
2010-11
Yield 2011-12
% Change
12.26 36 2.07 15 156 11 0.30 1 16.19 30
1,863 1,417 707 576 1,453
1,760 1,222 677 564 1,417
-6 -14 -4 -2 -3
*Niclsen estimate; Arca lakh hectares, production in lakh tonnes; yield in kg/hectare Source: SEA March & April 2012, SAARC OILS & FATS TODAY
29
Technology
Oil Seeds Processing
Productivity is Attributable to Cutting Edge Technology (Part-2) — Dr. J.S. Chaudhuri, Tej Oil Extraction Techniques, Address Tech Solutions (P) Ltd., Dewas
Productivity is never an accident. It is always the result of Commitment to Excellence, Intelligent Planning, and Focused Effort - Paul J. Meyer Fig.1 - Seed Cleaning flow chart Cleaning of Soyabeans Drum Sieve Rotary
Stems, Sticks, Big, Stones and Twills
Pre Seed Cleaner
Stems, Sticks, Big Stones & Mud Balls
Light Ref. Hulls, Stems and Dust Removed by Aspiration
Fine Impurities, Broken Seeds Smaller Seeds, Shribield Clay and Stones
Silo
Fines Seed Cleaners
Fines Impurities
Destoner
Stones Mud Balls Clean Seed
Pic. 21: Ref. Samples from Seed Cleaner’s through Various Cleaning Process 30
SAARC OILS & FATS Today, March & April 2012
Technology De-hulling of soybean seed To produce high-protein meal for animal feed or flour for human consumption, de-hulling is very much in need. Some industries demand high-protein meal of good and consistent quality. For other feeds, low-protein meal is satisfactory. Meal that does not meet standards agreed on by shipper and buyer may be heavily discounted or rejected. By weight soybean contains approximately 8-10% of hulls. Practically it is not possible to get an absolute separation of hull from the meats (cotyledons), but the objective is to get sufficient separation to meet the standard meal analysis required. Generally, if the fiber content is reduced to the desired value, the protein content will meet specification. Even though, small meat particles may adhere to hulls and be carried with them, in economic point of view no meats are desired to pass over with the hulls. Proper analysis of hulls will help to monitor this factor. Since hulls contain almost no oil the oil content of hull is used as a de-hulling control and optimally will be below 1.5%. Hot De-hulling This process differs from conventional preparation in that the hulls are removed from split soybeans before cracking and flaking. Cleaned whole soybeans with normal storage moisture are gently heated to approximately 60 deg. C in a period of 20 to 30 min, which allows moisture to migrated to the surface. The soybeans are then split into halves by corrugated rolls and the hulls are released from the split by mechanical impact or friction. Separated hulls are removed by aspiration. The hulls may be screened to recover fines, which are sent with the cracked soybeans going to the flaking rolls. The split soybeans are cracked into four to eight pieces and may be conditioned before or after cracking. Conditioning consists of cooling and drying using ambient and recycled air to adjust the temperature and moisture for flaking; for example 60 to 65 deg. C Separation of hull is commonly done by screening and aspiration. A screen with two decks, fitted with 4-mesh and 10-mesh screen is typical. Hulls are
aspirated from the top screen. Discharge from the end of the 10-mesh screen goes to an aspirator for classification. The heavy material from the aspirator and the fines that went through the 10-mesh are mostly meats and go into a conveyor to the conditioner. The material aspirated from the top screen and from the multi aspirator is collected in a cyclone and discharge to a secondary de-hulling system. The secondary de-hulling may be a two-deck screen and aspirator similar to the first stage. The main advantages of de-hulling are the increased extractor capacity and lower residual oil in cakes. Disadvantages are increased energy for drying, additional electricity of de-hulling equipment and the extra wear and tear of the same. The installation of de-hulling in a plant will affect the requirement for grinding. Meal from de-hulled soybeans is generally easier to grind and takes less power than meal from non de-hulled soybeans. Advantages of PHE A plate heat exchanger (plate and frame type) has the following advantages over the most widely used industrial heat exchanger, the shell and tube heat exchanger. 1.
2.
High value for overall heat transfer coefficient, U - For the same two fluids, a plate heat exchanger typically has a U value much higher than either a shell and tube heat exchanger or a spiral heat exchanger. Compact design - The combination of high value for the overall heat transfer coefficient and the general compact configuration of the plate heat exchanger lead to its ability to have five times heat exchanging thermal capacity when compared with shell and tube heat exchanger for the same size i.e. for the same area.
3. Easy maintenance and cleaning - The high turbulence also gives a self-cleaning effect. Therefore, when compared to the traditional shell and tube heat exchanger, the fouling of the heat transfer surfaces
is considerably reduced. This means that the plate heat exchanger can remain in service far longer between cleaning intervals. Since high versatility, the design allows for fast and easy rearranging of the plates as operating or process conditions change. The plate and frame heat exchanger can be taken apart allowing it for easy cleaning and maintenance. A plate and frame heat exchanger can be designed to allow for easy addition or removal of plates to expand or reduce its heat transfer capacity. 4.
Temperature control - A plate heat exchanger works well with small temperature differences (as low as 1 degree centigrade when compared to 5 degrees of shell and tube) between the hot fluid and the cold fluid.
5.
Low risk of fluid loss - Plate Heat exchangers is perfect for expensive materials since they have a very low risk of fluid loss. Thanks to advanced gasket design and welded plates, plate heat exchangers also lose very little fluid; making them ideal for transferring expensive and caustic fluids.
6.
More Life - They are high corrosion resistance, naturally have more life.
7. Low quantity of fluids in processthey exchanger contain low quantities of fluids so there will be less fluid in the process. 8.
Low investment costs and additional costs - Due to its high heat transfer efficiency lesser area is required. Plate exchangers can easily be expanded to suit new applications or increase flow rate, often negating the need to purchase a new heat exchanger.
9. Less handling cost - The sizes and weights of PHE’s are very small and therefore it is easy to transport and install at lesser cost. 10. Easy Availability - Plate heat
March & April 2012, SAARC OILS & FATS TODAY
31
Technology
Pic. 22: Installation of Plate Heat Exchangers in SEP
exchangers are available in a wide variety of materials, designed to fit specific applications. Plates are available in: Stainless Steel, Titanium, Titanium-Palladium, Nickel, Hastelloy, Inconel, Tantalum, SMO-254, and Incoloy 825, selected for their durability and efficient heat transfer qualities. Gaskets are available in Nitrile, EPDM, Viton, and Compressed Fiber, with Glued or Clip-on designs. There are many manufacturers like ALF A LAVAL, GEA, APV, TRANTER and SONDEX. The plate heat exchangers can be used in evaporators but one has to take care of fines which is necessary evil in processing of oil seeds as their presence especially in oil cake processing renders the PHE to get choked soon. The solution is to use standby PHE to avoid the production loss and good miscella filering system. A combination of Addrest miscella filter and Eaton filter proved to be very good. Miscella Filter Why do we Need Miscella Filter? In the continuous solvent extraction of oilseeds the quantity of fine meal solids (fines and tines) that is carried out from the extractor with the oil-solvent mixture (miscella) depends upon the oilseed, the method of preparation, and the extractor used but even then how best you condition the seeds to be extracted, how best you make the flakes, how best you use the conveying system and how best you make the extractor the “fines” are a necessary evil and are created during any of the various steps of the extraction operations; in the flaking equipment, in the conveying and elevating” of the’ flakes/collets, in the dryer cooler and 32
Pic. 23: Installation of Plate Heat Exchangers in SEP
while carrying to extractor, during the extraction operation and, finally, during the elimination of the solvent from the extracted meal because the physical characteristics of vegetable oil bearing materials vary to a wide degree. In flaking such seeds as soybeans or corn germ, the “fines” may easily and economically be kept at a minimum but with such seeds as cottonseed, flaxseed, sesame, rape seed, mustard seeds, palm kernel seeds, castor seeds, rice bran, sunflower seeds it is very difficult to prepare the material for extraction without “fines”. While processing seeds other than the soybeans and corn germs the quantity of “fines” is increased many folds and particularly while processing mustard the heat exchangers demand cleaning even in less than 30-40 days period. We don’t hesitate in saying that any equipment that has difficulty in handling “fines” may be considered a technical and economical failure when called upon to process such difficult seeds. Peanuts may also be added to this list as well as all oil cakes from the presses and expellers. In a conventional distillation system the separation of the “fines” from the miscella is really an important problem because their presence causes a great deal of trouble, the principal one of which is the sticking of these solid particles to the heating surfaces of the distillation and solvent recovery system. The consequent scorching causes discoloration, low flashpoint, higher impurities, higher moisture and volatiles in crude oil, more steam consumption per ton of seed processed, reduction in the life of the heat exchanger’s tubes and loss of precious production hours in getting the tubes clean. These consequences disturb quality of products, delivery schedules and increase the cost of production.
SAARC OILS & FATS Today, March & April 2012
Pic. 24: Miscella Filter-for fines separation
The fines collected by this miscella filer have been shown in the pictures as follows:
Pic. 25: Fines-collected from filter
Pic. 26: Fines-fines collected from filter
The analysis of fines received from mustard and soybean is as under: Moisture%
Mustard 11.35
Soybean 10.69
Protein% 41.98 42.30 Sand/Silica% 4.34
2.26
Fat%
1.2
1.48
Protein content indicates that these fines are the fines particles from DOc. Keeping the above problems in mind the present novel apparatus has been developed to minimize fines from miscella by using the combined techniques of percolation, hydro clone separation, en massing of escaped fines, minimizing recycle of concentrated miscella and continuous on-stream operation. The
Technology equipment has been tested up to the plant capacity of 1000 TPD successfully and we have developed the equipment for 1500 tonnes also. The miscella filter uses a special filtering and en-massing media, perforated sheet and SS-304 mesh built in a robust housing with a pneumatically and electrically or pneumatically commanded Deltech butterfly valve (American company) to drain fines rich miscella to extractor bed after fixed intervals. This valve help in eliminating the chocking problem of the drain line of miscella filter because one has to run the hydro cyclone by throttling the .valve otherwise whole miscella will go to the extractor. Also many people put smaller valve and it gets chocked and hampers the filtration process i.e. miscella goes without filtration. In our system no drain line gets chocked and no miscella can escape without passing the filtering media in any condition. The pump required for fines separator will have the head around 35-40 meter and the capacity equal to the miscella sent for distillation every hour. The HP and capacity of the pump varies according to the crushing capacity and miscella concentration but the RPM are generally 2900. We recommend the pump make Jonson and model No. CN 40-200 for 25 to 30 M3 miscella flow per hour. If the miscella flow is more the required pump can be suggested. Bellows Sealed Stop ValvesAdvantages l Ultimate solution to on/ off stop valve needs l Environmentally sound solution. l Bellows sealed design ensures stem seal leaks are totally eliminated l Meets most stringent worldwide emissions legislation. l Vital to maintain plant safety. l Save energy, promote a cleaner environment. l Zero emissions are guaranteed. User benefits l Eliminates fugitive emissions environmentally friendly and energy efficient. l Easy to operate. l Long valve life. l No ongoing maintenance required.
Hot De-hulling process differs from conventional preparation in that the hulls are removed from split soybeans before cracking and flaking. l Fully complies with the requirements of the European Pressure Equipment Directive 97/23/EC. l SpiraxSarco’s guarantee of worldwide technical support, knowledge and service. Product features Long life: Bellows sealed construction offers trouble free operation and the fatigue life of the bellows is designed to meet the latest international standards. In the unlikely event of a bellows failure, a precautionary second seal exists to prevent leaks. Maintenance free: Not only do the BSA valves eliminate stem seal emissions, they are virtually maintenance free. The procedure for changing internals is rapid and simple. All SpiraxSarco gaskets are asbestos free. Robust: The BSA valves are unaffected by vibration and will operate over a wide range of pressures and temperatures. Throttling plug: The new BSA_T offers a throttling plug as opposed to the standard flat disc. The throttling plug allows manual regulation to adjust line pressure and flow, it can also be used as a ‘crude’ control valve or a substitute for ‘bypass’ lines. The throttling plug version also benefits from having twin ply bellows which will extend the products service life. Those valves fitted with a throttling plug have a locking screw as standard, enabling the user to lock the valve in the throttling position. The stainless steel versions, being more likely to be used in corrosive environments, have been fitted with a
grease nipple to enable simple lubrjcation of the stem and bonnet bushes. Process applications: Bellows sealed stop valves are, suitable for use on a wide variety of industrial and process fluids and gases such as steam, air, thermal fluids, oils, hot water and cold water applications. Ranging from DN15 to DN250 and rated up to PN40, ANSI 300 and Cli1sS 800; with flanged, screwed and socket weld connections, there is a valve to meet most process applications. Isolation applications include: Steam and condensate, process fluids, hot and cold water systems, hot oil systems, toxic fluids, compressed air and other gases, water / glycol systems and thermal fluid systems e.g. Dowtherm*, Santotherm*, Thermex*, Therminol*, Ucon* (*Registered trademarks). Throttling applications include: Balancing lines, bypass lines and’ crude’ control valve substitute. FRP Fanless Cooling Towers l These cooling Towers are made from a corrosion proof polymer composite shell that will never corrode, flake, chip, peel or even need painting or coatings. l Cooling Towers are ENERGY SAVING BY DESIGN. Towers work on venture principal for air induction as air is induced by whirlpool jet inside from the top of the cooling tower, thereby eliminates need of fan. Power saving = Rs.35,000/- Per year per H. P. of fan power. l Tower require very low maintenance by design. They have been designed carefully to have minimal maintenance issues. l No fills, no cleaning, no shutdowns and hence no production loss. l They have high aesthetic look. l Cooling Towers payback period is very short due to savings in power consumption and maintenance.
March & April 2012, SAARC OILS & FATS TODAY
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Technology Induction of atmospheric air due to ventury effect Hot water in Built in Drift Eleminators
Production process plants, pipeline control centers, Airport, avionics and airfields Railways and metro lines, Hospitals, healthcare, Hotels and Cinema halls, Security and Alarm equipments, Defense
New Industrial Roofing Systems:
Air plumes out
Pic.27: FRP fan less Cooling Tower-No fins
l l l l l l
Cold water sump
Pic. 28: Working of Cooling Tower
To achieve this, whirl-jet nozzles are used. Due to water jet partial vacuum is created on top of the tower that induces surrounding air from top to bottom, (cocurrent) which in turn cools the water. For better surface contact atomization (Mist formation) of water is Pic. 29: Whirl Jet Nozzle created. Hollow Cone nozzles are best for cooling tower application, which requires good atomization of liquid (water) and quick heat transfer. Nozzles are tangential entry type. Free passage is given to the water to form uniform hollow cone spray pattern with non-clogging characteristic. Industrial UPS: Industrial UPSs are regarded as fully customized power supply systems for rugged environments and designed particularly to safeguard critical loads in industrial applications where transients, created by degraded mains supply, can seriously affect the quality and quantity of production. The system consists of rectifier / charger, inverter, static bypass maintenance bypass, rectifier isolation transformer, inverter isolation transformer, bypass line isolation transformer, automatic line stabilizer, DC distribution, AC distribution, controls and monitoring.
Pic. 32: Industrial Roofing - No Truss, No Purlins, No nuts & Bolts
Main Features: l Self supported structure without trusses, purlins and ancillary supports l Aesthetically appealing l Unobstructed 115 feet (36 meters) of clear span l 100% leak proof l Zero Maintenance l Free from holes, nuts, bolts and overlaps l No bird nuisance l On side fabrication and installation
Coolers temperatures Resistance to damage and corrosion Faster projects turnaround Value for money Pan India presence with an installed capacity of 6000 M2/ day l DOC bags packing, weighing, stitching and stacking systemTechnology available. l l l l l
DOC bags packing, weighing stitching and stacking systemTechnology available This is a novel system in India introduced for the first time in soybean processing Industry. The system can pack, weigh, stitch and stack 600 begs per hour involving 3-4 persons only up to the stack height of 30 layers of begs.
Read Every Month
Pic. 30: Industrial UPS
Pic. 31: Industrial UPS System
The Application of Industrial UPS l Industrial UPS Systems are primarily designed to meet requirements for the applications; l Oil and gas offshore and onshore, l Petrochemical and Chemical, l Power- and Substations 34
SAARC OILS & FATS Today, March & April 2012
SAARC Oils & Fats Today Contact: MediaTodayMails@gmail.com
Technology Pic. 33: Packing, weighing and stiching
Packing, wighing and stiching-2 person engaged Pic. 34: Stacking of begs in go-down by mechanical and automatic system
Stacking of begs-one person engaged
Value added products:
Pic. 35: Edible Flakes
l snacks and breakfast cereals l energy and protein bars l weight loss ready-todrink beverages l soups, sauces, and baked foods l ice cream, yogurt and other dairy or dairy-free Pic. 37: Soyabean Protein Isolate products l meat alternatives l processed meat, poultry and fish products
Soybean Protein Concentrate-Technology Available l The most frequent method used is alcohol extraction l Soy protein concentrate should contain at least 65% protein on a moisture free basis l Soy protein concentrate can be found in different forms: granules, flour and spray dried l Soy protein concentrate is widely used as functional or nutritional ingredient in a wide variety of food products: l baked and breakfast foods and in some meat products. l It is digestible and therefore suited for children, pregnant and lactating women and elderly. It is in pet foods and milk replacers for calves and pigs. l SPC can accommodate the many nutritional needs of aquaculture worldwide as a protein substitute in aquafeeds. l SPC is a renewable plant protein product that can help reduce pressure on natural fisheries stocks and help provide sustainability to the growing demand for aquatic products. l Low-antigen SPC is the preferred SPC product for aquafeeds. l The high protein level of SPC (65-57%) makes it suitable for nutrient dense aqua feeds for marine fish, marine shrimp and for fry and finger-ling feeds of both freshwater and marine fish. l SPC, when supplemented with methionine, can significantly reduce dependence on fishmeal in aquaculture diets.
Pic. 36: Edible Flakes
Low NSI edible flakes produced from hot de-hulled soybeans with fiber content less than 3% Soybean Protein Isolate-Technology available Continuous acid-alkali process-Plant available up to 10, 000 tonnes/annum l Soy protein isolate is the soy protein with the highest content of protein. It is made from defatted soy meal by removing most of the fats and carbohydrates, yielding a product with 90 percent protein
Pic. 38: Soyabean Protein Concentrate-Chunks
Pic. 39: Soyabean Protein ConcentrateGranules March & April 2012, SAARC OILS & FATS TODAY
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Technology Soybean Lecithin-Various types:- Technology available Health benefits of Lecithin l Help protect against cardiovascular disease-hardening of the arteries l Reduce cholesterol, l Support liver health-fatty liver (hepatic steatosis) l Help weight loss, l Help with the health of joints, l Help treatment of Alzheimer’s disease, amnesia and dementia-Hence improves memory l Help prevent the onset of gallstones and improving gallbladder function and health, l Treatment of bipolar disorder, eczema-a skin disease l Warning: High doses cause nausea, vomiting, diarrhea, bloating and sweating
Pic. 40: Lecithin Capsules of LecithinFood GradeTechnology available
1. Lecithin 2. Normal Modified Lecithin 3. Fine Modified Lecithin
Capsules of Lecithin-Food Grade-Technology available Pic. 41: Lecithin Capsules
Pic. 42: Lecithin Capsules
They are from more concentrated lecithin Pic. 43: Lecithin Granules
Granules are less concentrated then capsules
Pic. 44: Lecithin Capsules
From more concentrated lecithin
Soybean Lecithin Granules- Technology Available
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SAARC OILS & FATS Today, March & April 2012
(Concluded)
Corporate News
Hatsun Agro to invest 50-cr to start ice-cream chain
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hennai-based Hatsun Agro Product Ltd will invest over Rs 50 crore to set up a national chain of ice cream parlours over the next one year. The exclusive chain, under the brand name Ibaco, will be a stand alone format, offering a range distinct from its flagship Arun Ice Creams brand. The company plans to set up a chain of 250 Ibaco outlets including 70 in Tamil Nadu. As of now, there are 45 Arun Ice Creams Unlimited exclusive ice cream parlours which will be rebranded, and in the next one month 25 Ibaco outlets will be added. R. G. Chandramogan, Managing Director, Hatsun Agro, said the company plans to establish a strong presence across South India and in stages will enter the markets in the North over the next one year, when 180 Ibaco outlets will be added to gain a national presence. Each outlet will involve an investment
of about Rs 25 lakh-30 lakh. The company has roped in international consultants for an aggressive expansion. For Hatsun Agro, the largest private sector dairy with a turnover of Rs 1,355 crore last year, Ibaco will be the second national brand after the Hatsun range of dairy products such as ghee, butter, dairy whitener and milk powder. Its flagship brand Arokya milk and Arun Ice Creams are regional brands restricted to the South. As of now, the ice cream business, including Arun Ice Creams and the parlour chain, account for about 7-8 per cent of its total turnover amounting to about Rs 95 crore. Its ice cream parlours contributed to about Rs 10 crore. Arun Ice Creams will constitute the ice cream range in cups, cones, sticks and bars. Hatsun has two ice cream factories in Chennai and Salem with a total capacity of about 70,000 litres a day. Its existing cold chain infrastructure can be used to
R. G. Chandramogan
expand the ice cream distribution, he said. The company announced to the BSE that it has resolved to sell a new range of ice creams under the Ibaco brand and open 70 outlets in Tamil Nadu and 250 across South India, including select outlets in North India by March 2013.
Hatsun Agro’s profits up by 66 %
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tabilisation of the milk ingredients business in the domestic markets has contributed to a steep jump in net profits for Hatsun Agro. The company has reported a 66 per cent jump in net profit for the third quarter ended December 31, compared with the corresponding quarter in the previous year. The net profit was Rs 10.66 crore (Rs 6.42 crore) on an income of Rs 404.56 crore (Rs 340.36 crore) for the quarter. R.G. Chandramogan, Managing Director, Hatsun Agro told Business Line the growth in profits has been due to the establishment of dairy products such as ghee, dairy whitener, milk powder and butter in the domestic market and improved contribution from them. The company has launched these products over the last two years after it exited the milk powder exports business following the changes in Government policy.
Cream and Arokya milk brands in the south, the company now has a national brand in the Hatsun range of dairy products which are available up to J&K, the North-East and the West. The company has established 38 branches in various markets and the related infrastructure, he said. Previously, branded products contributed to 72 per cent of its business and the balance was commodity business, primarily exports. Now, over 94 per cent of its business is from branded, value added products, which has a beneficial impact, he said. The company has announced a total interim dividend of Rs 1.10 an equity share of Re 1 including Re 0.50 (50 per cent) Silver Jubilee year interim dividend. Hatsun Agro, subject to shareholders’ approval, has decided to make a bonus issue of one equity share of Re 1 for every two equity shares. The EGM to seek shareholders approval will be held on March 12.
The last two years’ focus and expenditure on these products are now starting to pay off, he said. In addition to Arun Ice
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News
Higher China import swings up palm oil prices
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alm oil prices have hit an eight-month high due to higher imports by China, forcing Indian companies to raise retail prices for the third time in four months. Palm oil is India’s most popular oil, with a 45 per cent share of the edible oil market. “Soya oil and refined palm oil prices have increased by $40-70 a tonne in the last one month. An immediate price increase of Rs 1-2 a litre on consumer packs will take place,” said Angshu Mallick, chief operating officer, Adani Wilmar, which owns India’s largest selling cooking oil brand Fortune. The company crushes a million tonne of soyabean annually and exports 11.2 million tonnes soya meal, apart from handling 8-10 lakh tonnes of refined palm oil. Since November, edible oil companies have raised retail prices by Rs 4-5 a litre owing to the weakening of the rupee. Currently, edible oil consumer pack prices range from Rs 60 to Rs 70 a litre. “We might see prices remaining at the same level with a likely upward trend,” said Cargill India chairman Siraj Chaudhry. In India, Cargill owns edible oil brandsNatureFresh, Gemini and Sweekar. Most edible oil companies expect the volatility in edible oil prices to continue till Holi. “Prices will stabilize in India after Holi as the new mustard crop’s availability will peak. Also, the just-cropped palm oil production will begin in May-June in
Malaysia and Indonesia which might ease pressure on prices,” said an official from Ruchi Soya. The company, the third largest player in the refined oil business, will be increasing the price of Nutrela Soyumm (soyabean oil) consumer packs by Rs 2 a litre and the Ruchi Gold (palmolein oil) consumer packs by Re 1 a litre. However, the industry is waiting for the new mustard/rapeseed crop production figures. According to second advance estimates, the oil seeds crop for 2011-12 is projected to drop by 6 per cent to 30.53 million tonnes owing to uneven rains in the kharif season and low pre-winter rains in the northern region. Analysts expect mustard production to be at 65 lakh tonnes compared to 70 lakh tonnes in 2011.
“Since 2008, there has been a lot of volatility in the edible oil business, which might continue due to challenges in the supplies of raw material. Even as the country had a bumper soyabean crop, a fall in the US crop size and an expected smaller crop in South America due to drought have impacted Indian edible oil manufacturers,” said Sandeep Bajoria, CEO of Sunvin Group, a vegetable oil consultancy firm. According to traders, palm oil prices are supported by the tight supplies and increasing global demand, particularly from China. On Tuesday, crude palm oil futures for delivery in March were firm by 0.35 per cent to Rs 547.50 per 10 kg on the Multi Commodity Exchange.
Government’s flawed policy affects oil palm farmers: Dr Y Sivaji
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r Y. Sivaji, honorary president of the AP Tobacco Growers’ Association and a former member of the Rajya Sabha, who participated in pre-budget consultations with the Union Finance Minister, Pranab Mukherjee, said that the Central Government is taking several steps to promote oil palm cultivation in the country to meet edible oil scarcity and for import substitution, but unless farmers get a remunerative price for the fresh fruit bunches (FFB), the situation will not 38
improve. He requested in a written note that the present price fixing formula for oil palm FFBs is unscientific and wholly in favour of the oil palm processor rather than the farmer. Unless farmers get remunerative price for FFB, the objective of area expansion cannot be achieved. He said that unlike in Indonesia and Malaysia where oil palm was a rain-fed crop it was being cultivated in India in irrigated conditions.
SAARC OILS & FATS Today, March & April 2012
Andhra Pradesh stood first in oil palm cultivation, especially West Godavari district, and several processing units had been set up in the district by private companies. However, due to the flawed policies of the Government, enterprising oil palm farmers in Andhra Pradesh and elsewhere were being forced to give up the crop. He said the present price-fixing formula for oil palm FFBs was based on the statistics of oil extraction rates and value
News realisation provided by the processing units and not on the research of the Indian Council of Agricultural Research (ICAR) or some other independent agency. It was being done on a monthly basis, he added. He said at present the processing units were realising Rs 11,400/tonne of FFB. The farmer was spending Rs 8,145 per tonne of FFB, according to a 2010
survey, exclusive of cultivation subsidies given by the Government. Processing cost The processing cost as recorded in the AP Oil Fed processing unit in West Godavari district was Rs 1,853/tonne of FFB. Therefore, proportionately, the farmer should get Rs 8,900/tonne and the processor Rs 2,500/tonne.
But in fact now the farmer was getting Rs 6,000/tonne and the processor Rs 5,400/tonne. It clearly showed how flawed the price fixing formula was, he added. He urged the Union Finance Minister to address the issue in the coming budget and also to announce some incentives to oil palm farmers.
Maize exports slow down due to rupee appreciation
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aize exports have slowed down with a stronger rupee. However, the exporters and companies are expecting orders to pick up in the coming days as global stocks run down to record lows. Amrit Lal Kataria of Mehak Overseas, a Mumbai-based trader and exporter said, “Exports have slowed down but queries are coming. With the arrival of the new crop in March-April from Bihar and Andhra Pradesh, we should expect increased orders”. He added that Indian prices were competitive compared to that of other global players. According to traders in Nizamabad, the exporters have done major forward contract buying. “The poultry industry has slowed down procurement of maize since the past few months when prices reached Rs 1,200 to Rs 1,300 a quintal. They are substituting maize with bajra, which was 15 per cent cheaper,” said Jaydhar, a broker in Hubli mandi of Karnataka. Unlike the previous year when maize prices shot up in January-February, the prices have remained stable this time. “This year, exporters procured the
commodity early and stocked it on signs of increased export orders,” said a Delhibased analyst. In 2010-11 marketing year (October-September), over 2.8 million tonnes maize was exported. The industry expects to export 3 million tonnes this year with over one million tonnes already shipped. NCDEX spot market price for maize (Nizamabad) closed at Rs 1,160 a quintal in mid-February and in Delhi at Rs 1,275 a quintal. Maize delivery in March weakened 1 per cent to Rs 1,183 a quintal on NCDEX with open interest of the contract stood at 11,370 lots. Maize for delivery in January dropped 2.5 per cent to Rs 1,212 a quintal with an open interest of 2,370 lots. “Maize prices will rule firm as local and export demand is expected to remain strong,” said Vishal J. Majithia, MD of Sahyadri Starch & Industries, and the president of All India Starch Manufacturing Association. He added that with rupee appreciation, the export of both maize and glucose has slowed down but it may rebound.
“Demand is stable from textile, pharmaceutical and food processing industries. Glucose price, which was Rs 23 a kg in the previous year, is now selling at Rs 21. Also, starch prices are at Rs 20-21 per kg compared to Rs 24-25 in 2011”.
Cabinet Committe approves National Dairy Plan
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abinet Committee for Economic Affairs has approved the National Dairy Development Board’s ambitious National Dairy Plan for the 12th Five-Year Plan starting this year. The government will launch this countrywide plan with an outlay of Rs 1,760 crore. International Development Association will provide Rs 1,584 crore towards the project and the rest Rs 176 crore will come from the Union government. “The cabinet panel has given its clearance to the longawaited project. However, due to the
election code of conduct in various states, a formal announcement has not been made, “according to a source. The project aims at boosting milk production using scientific breeding and feeding programmes covering about 2.7 million milch animals in 40,000 villages. It will also focus on modernising villagelevel infrastructure for milk collection and bulking such as milk cans, bulk milk coolers for a cluster of villages, associated weighing and testing equipment and related IT equipment. National Dairy
Development Board says the demand for milk is likely to be about 150 million tonne by 2016-17 and 200-210 million tonnes by 2021-22. “India was the largest milk producing nation in 2010-11 with a production of 116.2 million tonnes. This was close to 16 per cent of world milk production. Milk production in the country is growing at 3.3 per cent per annum while consumption is growing at 5 per cent leaving a gap in demand and supply. We need to plug that gap to steady the domestic supply and
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News milk prices,” said a source. “It is estimated that the capacity created by the private sector in the last 15 years equals that set up by cooperatives in over 30 years. In the changing scenario, cooperatives currently procure about 16
per cent of the national marketable milk surplus covering around 21 per cent of the country’s villages and 18 per cent of rural milk producing households. It is desirable that the cooperative sector achieves a procurement share of at least 20 per cent
of the marketable milk surplus by 201617 so as to retain an overall 50 per cent share of the marketable surplus handled by the organised sector,” an NDDB report on National Dairy Plan said. The project took five years to get the clearance.
Genes make us love fatty foods: Research Study
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enn State University’s researchers have claimed to have found persons having some specific kinds of CD36 gene tend to love fatty foods while those who lack these genes or have other forms of this gene do not get attracted to such unhealthy fatty foods. The lead researcher claimed that people naturally crave for fatty foods, but some do more than others. They have found that people who have certain forms of the CD36 gene get infatuated by higher fat content in the foods. This is unhealthy but they appear helpless before their craving which is deep and stubborn. Eventually, they become obese and may develop many health complications. Lead researcher Prof Kathleen Keller said while animals must have this CD36 to know their likings about various taste preferences for fat, humans have varying forms of this gene. Keller also added that this is first of its kind study in this field.
“We tested 317 African-American people of both sexes because they belong to a certain ethnicity who are highly predisposed to obesity,” said Keller who headed researchers at Penn State, Columbia University, Cornell University and Rutgers University The participants were served Italian salad dressings made with canola oil as it has high content of fatty acids. The researchers asked them to tell their perceptions of the dressing’s fat content and oiliness on a scale with “too low” and “too high”. The researchers used a process which involved asking certain questions regarding taste and food preferences. They gave their answers based on two extreme factors: “do not love at all” and “love very much”. The team used such foods in their questionnaire which are not so healthy, or which are used in fast foods. The list
Mother Dairy to look toward south
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other Dairy, the iconic dairy milk and milk product giant of Delhi, is willing to look towards the south region. It may set up a production facility in that region for its ice-creams and fresh dairy products in the next one and a half years. Currently, Mother Dairy has nine manufacturing facilities. Out of these, eight are outsourced units in the North and West. Subhashis Basu, Business Head, Dairy Products Division, Mother Dairy Pvt Ltd, said, “The company has launched its ice-creams in Bangalore recently and will do the same in Chennai and Hyderabad within this year.” For the time being, the company’s production facilities in Delhi, Mumbai 40
SAARC OILS & FATS Today, March & April 2012
included cake, cookies and doughnuts mayonnaise, fries, fried chicken, bacon, cheese, chips, sour cream and hot dogs and other such fast foods. They discovered that respondents having “AA” form of the gene found the salad dressings as “creamier” than those lacking this form of the gene. To know the forms of the gene CD36, researchers took participants’ saliva samples. They extracted DNA fragments from these samples to detect slight or major variations in this gene. Prof Keller elaborated that it is of course and undoubtedly this CD36 gene which cause differences in perception about the fatty contents in the food. “The gene controls the mind’s perception,” Keller said. Prof was sure from the research’s outcome that obesity is directly linked to this gene.
News and Warana would supply ice-cream for the Bangalore market. “But to launch our fresh dairy items which have short shelflife, like dahi, paneer and buttermilk, we have to set up a production facility in the region,” he said. Mother Dairy ice-creams have about 15 per cent market share of the country’s Rs 1,500-crore ice-cream market. It usually registers sales of Rs 250 crore
annually. The volume sales of the company’s ice-cream brands are around 225 lakh litres during 2011-12, which is an annual growth of 30 per cent. Basu added that just like Delhi, in Bangalore too, the company plans to tap the vending cart channel. Mother Dairy uses about 3,000 carts in Delhi to sell its ice-creams. “We’ will start with about 100 carts here and then go up to 400 over a
period of time,” he said. The company is expecting a 10 per cent share of the Bangalore ice-cream market, which is around 9 lakh litres per year. “Apart from its ‘impulse category’ of ice-creams, Mother Dairy would focus on growing its premium ‘take home’ in the Bangalore market,” he said.
Mother Dairy milk procurement rises
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other Dairy’s daily procurement of milk has increased by around 12 per cent, which has helped the dairy major to pile up stock for the lean summer season. This procurement increase is attributed to the intelligent use of the flush season. Mother Dairy Fruit and Vegetable managing director, Shiva Nagarajan, said, “Mother Dairy is collecting about 60 lakh litres of milk daily. Out of this 38 lakh litres is sold daily and the rest gets converted for the lean season collection in 2011-12 fiscal compared to the last fiscal has increased by about 12 per cent. We have secured the upcoming summer’s requirement and will be able to meet the lean season demand without relying on import of SMP (Skimmed Milk Powder”. He said that due to flush in milk production, the procurement cost of milk has been lowered. “But, farmers have not lost because despite the slash price is still
higher by about 10-12 per cent compared with last financial year,” he added. Nagarjan appreciated the fact that with about Rs 5,200 crore in value this financial year, Mother Dairy, which rules the milk and dairy products market in Delhi and NCR, is growing at around 28 per cent. Mother Dairy is in four businesses – refined vegetable oil (Dhara), dairy products, milk and horticulture. Set up in 1974, Mother Dairy is a wholly owned subsidiary of National Dairy Development Board (NDDB) of India. It collects milk daily from farmers of Punjab, Uttar Pradesh, Maharashtra, Karnataka and Rajasthan. “With handsome growth in all the four businesses, we hope Mother Dairy will be able to keep the inflation at low in the next financial year,” he added. It is paying increased focus in UP
TN Dairy Minister wants to boost milk production
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he Tamil Nadu Milk and Dairy Development Minister, V. Moorthy, called on Dr Amrita Patel, Chairperson, National Dairy Development Board (NDDB), and discussed with her ways and means to increase milk production in the southern State. Moorthy, accompanied by senior officials from Tamil Nadu, was on a twoday visit to Anand in this connection. They also discussed the innovations introduced by NDDB in animal breeding and nutrition which could contribute to increasing productivity. NDDB explained the National Dairy Plan, which aims to increase milch animal productivity
through scientific approach to breeding and feeding. The Minister has sought NDDB’s support in studying the existing facilities in Tamil Nadu and assistance in strengthening them for the benefit of the milk producers in that State, according to an NDDB release here. The Tamil Nadu delegation also visited the Sabarmati Ashram Gaushala, which has the largest semen station in the country, being managed by NDDB. Besides, they visited other NDDB-run institutions such as the Centre for Analysis and Learning in Livestock and Food.
region by forging partnership with Pradeshik Cooperative Dairy Federation (PCDF) in the most populous State.
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News
Dairies want export as production goes up
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urplus milk supply is expected to keep prices stable till May, 2012. Though dairy players selling liquid milk will hold on to margins, makers of downstream products are facing pressure on their profits and are banking on the government to allow casein -- a major milk protein -- exports after elections are over. After three years of milk shortage and a steep increase in prices, production has increased this year. Procurement by the largest player, Gujarat Cooperative Milk Marketing Federation (GCMMF) that markets the Amul brand of dairy products has gone up by an all-time high of 20% to 145 lakh litre per day. Owing to a good procurement price and marketing, we have seen an all-time rise in milk procurement this flush season, said GCMMF MD R S Sodhi. GCMMFaffiliated district cooperatives had procured 112 lakh litres per day during last year’s peak season. Surplus milk has become a problem for milk product makers, which are mainly concentrated in the North. There is pressure on profits. Smaller factories have either reduced procurement by up to 50 per cent or closed down their units, said Kuldeep Saluja, managing director, Delhi based Sterling Agro. The demand for allowing casein
export is getting stronger. The country has surplus milk production and we think the government might allow the export of casein on the condition that we import skimmed milk powder, said Uttar Pradesh-based VRS Foods MD Rajendra Singh. The company sells liquid milk under the Paras brand. India exported 70,000 tonnes of milk powder, casein and casein products till February 18, 2011 when export was banned. Dairies convert excess milk into powder when there is excess supply but powder prices too have fallen. In the past fortnight, skimmed milk powder (SMP) prices have fallen to Rs 160-170 a kg. Companies such as Nestle, GSK, ITC and Parle have completed SMP procurement ahead of summer when milk production falls. Others expect a further fall in prices to Rs 140-150 a kg by April. To ensure quality, we procured SMP between December and January at Rs 175 a kg, said Vadilal Industries MD Rajesh Gandhi. The ice cream manufacturer procures over 1,500 tonnes SMP in the flush season. In 2010, it had procured SMP for Rs 140 a kg in the December-January period. Casein is used in the manufacturing of protein supplements and health drinks. To manufacture a kg of casein, 33 kg of liquid
milk is used. Liquid milk sales are higher in the south. About 80-100 % of milk goes for sale as liquid milk. Only the surplus, which is marginal, gets converted into products, said Hatsun dairy chairman and managing director RG Chandramogan. After three years of milk shortage and a steep increase in prices, production has increased this year Surplus milk has become a problem for milk product makers, which are mainly concentrated in the North Dairies convert excess milk into powder when there is excess supply but powder prices too have fallen They are banking on the government to allow casein -- a major milk protein -- exports after elections are over.
Milk can strengthen memory power, a research study
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ilk has long been known to help build healthy bones and provide the body with a vitamin and protein boost. But now it’s being hailed as a memory aid after a study found those who regularly have milk – and other dairy products such as yoghurt, cheese and even ice cream – do better in key tests to check their brainpower. Scientists asked 972 men and women to fill in detailed surveys on their diets, including how often they consumed dairy products, even if only having milk in their tea and coffee. Drinking just one glass of milk a day could boost your brain power, say scientists 42
The subjects, aged 23 to 98, then completed a series of eight rigorous tests to check their concentration, memory and learning abilities. The study, published in the International Dairy Journal, showed adults who consumed dairy products at least five or six times a week did far better in memory tests compared with those who rarely ate or drank them. The researchers said: ‘New and emerging brain health benefits are just one more reason to start each day with low-fat or fat-free milk.’ In some of the tests, adults who rarely consumed dairy products were five times more likely to fail compared with those
SAARC OILS & FATS Today, March & April 2012
who had them between two and four times a week. The researchers, from the University of Maine in the U.S., believe certain nutrients in dairy products, such as magnesium, could help to stave off memory loss. They also suspect dairy foods may help protect against heart disease and high blood pressure, which in turn maintains the brain’s ability to properly function. Some experts have disputed this, however, claiming dairy products increase the likelihood of heart disease and strokes as they are high in saturated fat.
Victam Report
Focus on safety of animal feed from chemical — A Bureau Report
“The quality of animal feed is directly linked to the quality of livestock food productions both in terms of taste and quantity, and the most concerning issue today is the safety of the feed from chemicals and residues,” said Yukol Limlamthong, Permanent Secretary, Ministry of Agriculture and Cooperatives, Thailand, while inaugurating VICTAM ASIA, FIAAP ASIA and GRAPAS ASIA 2012 at BITEC, Bangkok on 15 Feb, 2012.
The 3-day event is South East Asia’s largest and the most admired exhibition cum conference on animal feed production. The show was attended by senior trade executives from Asia/Pacific region and exhibitors from all over the world who displayed their latest technology and systems required for the safe and economical production of animal feeds, dry petfood and aquafeed. “Presently, chemical free meat commodities have become an important issue of the world,” Limlamthong said. “With the concern in quality and safety of agricultural products, the Ministry of Agriculture and Cooperatives realizes that it is important to simplify technical knowledge and modern technology in production of raw material procurement, ingredients, manufacturing, technology, machinery, processing, storage and agriculture to primary producers”. “This is vital for us to be able to ensure and solidify our quality and safety of the exported agricultural commodities as well as to protect and maintain our sustainable environment and ecology,” the Secretary added. After the ribbon cutting ceremony with the VICTAM Board, the doors to the exhibition were opened and visitors from all over the world flooded the floor. More than a third of the visitors came from around 66 countries, said Victam Managing Director Henk van de Bunt. A total of 166 exhibitors from 29 countries including 12 from Asia welcomed the visitors. This time, the exhibitors acquired 30 per cent more space individually and built larger stands. Awards were also given to the eligible exhibitors. March & April 2012, SAARC OILS & FATS TODAY
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Victam Report India emerged as one of the most valued and important countries at the exhibition. The proof of this was the presence of many Indian trade visitors including Feed Millers, Poultry & Husbandry companies, Grain & Cereal Millers, Importers and Exporters of technologies apart from representatives of different international Grain Milling companies displaying their innovative technologies like Bhuler, Norvidan, among others. The organizers were thankful to Indian media for its successful campaign provided by selected quality media houses from India. Being the host, VICTAM Group sponsored travel and accommodation arrangement of media persons which create an impact on visitors’ profile and their numbers from India at the show. The event had many attractions and conferences like Aquafeed horizons, Petfood Forum Asia, Pellet Update Asia, organized by different independent known publication houses. A large number of companies had introduced new products at this show and also earned awards. Awards The Aquafeed Innovation Awards, sponsored by Aquafeed.com, were given away to Dr Eckel GmbH (Germany), Geelen Counterflow (Holland), Jiangsu Muyang Group (China), Nanchang Li Feng Industry and Trading Co. Ltd. (China), P.L.P. Liquid Systems s.r.l. (Italy), Shandong Yingchun Steel Silo Manufacturing Co. Ltd. (China), Wenger Manufacturing, Inc. (US), Zhanjiang Hengrun Machinery Co. Ltd. (China), Zengchang Group (China). They received the awards for being the finest
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in aquafeed ingredient, additive or processing technology. The FIAAP Animal Nutrition Awards, sponsored by AllAboutFeed, were given to A.W.P. s.r.l. (Italy), Buchi Labortechnik AG (Germany), Kemira Asia Pacific Pte Ltd. (Singapore), Nanchang Li Feng Industry and Trading Co. Ltd. (China), P.L.P. Liquid Systems s.r.l. (Italy). They were given the awards for the excellence in animal feed ingredient or additive. The 2012 VICTAM Awards for Milling, sponsored by Grain and Feed Milling Technology, went to Agentis Innovation (Thailand), Buhler AG (Germany), FOSS (Denmark), MORRILON (France), Norvidan Overseas A/S (Denmark), Van Aarsen International (Netherlands). They got the awards for achieving excellence in milling or grain processing technology/ system. The BITEC exhibition center is well equipped for machine manufacturers who want to expose their larger pellet mills and ex traders in full due to fewer
SAARC OILS & FATS Today, March & April 2012
weight restrictions on the exhibition floor. Also for the first time, exhibitors showcased their innovations in an Asian show, something that was not seen in previous editions due to fear of copying of equipment by competing Asian manufactures. But the market seems to have matured and copycats now realize it is not only price that determine sale but also the quality, especially in the fast growing market in Southeast Asia.
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Date of Publishing 4-5 Every Month Date of Posting 9-10 Every Month
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