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Palm oil import logistics

US imports of palm oil have grown in the past decade, with the East Coast ports of New Orleans and Savannah handling the most shipments Zainuddin Hassan, Nur Adibah

The USA is a leading global market for edible oils, consuming nearly 16M tonnes of vegetable oils in 2019, according to data from Statista.

Soyabean oil was, by far, the main oil consumed at 10.66M tonnes that year, followed by 2.465M tonnes of canola oil and 1.518 tonnes of palm oil.

The future of the US vegetable oils industry is projected to be optimistic as there is growing usage in food applications.

Demand from the bakery, food service and food processing sectors are expected to spur growth of the vegetable oils market in coming years.

Furthermore, increasing utilisation of vegetable oils, such as palm oil, in non-food uses is projected to aid market growth.

Palm oil in the USA

Over the past decade, consumption of edible oils and fats, including palm oil, has undergone considerable change in the USA.

Several factors, including consumer awareness of nutrition and health attributes of various oils and fats, dietary guidelines, and legislation in the form of nutrition labelling of saturated and trans fatty acids have helped shape consumption patterns in the USA.

According to the earliest recorded data published by the research group IndexMundi, palm oil gained access into the US market from 1965. Import volumes have grown steadily over the years and recorded a huge increase between 2002 and 2008.

In 2019, US palm oil imports reached 1.58M tonnes (see Figure 1, p32).

Data released by the US Census Bureau showed that US palm oil imports from January-December 2018 amounted to US$1.09bn compared with US$1.05bn in 2017.

The top three palm oil exporters were Indonesia, Malaysia and Colombia. Indonesia accounted for 60% of total US palm oil imports (1.43M tonnes) from January-November 2019 and Malaysia accounted for 38%, according to trade data from the US Census Bureau.

Based on the data published by Statista, US consumption of palm oil totalled 1.48M tonnes in 2019 (see Figure 2, p32).

Competitive palm oil prices and the u

Figure 1: US palm oil imports by year (‘000 tonnes)

Figure 2: Palm oil consumption in USA, 2000-2019 (‘000 tonnes)

u functional applications of palm oil in the food sectors were two of the key factors in sustaining palm oil demand and consumption growth in the country.

Logistical support

The edible oils market in the US food sector is a huge 11M tonnes industry due to its large number of food-related businesses.

The bakery, snack food and dairy products sectors constitute huge growth and demand potential for palm oil.

The East Coast is the most populous region in the USA which supports huge demand and consumption for oils and fats, including palm oil.

A high concentration of highway, railroad and waterway systems within the East Coast makes this area suitable for oils and fats distribution network centres, making it the primary destination for palm oil imports (see Figure 3, below left).

About 80% of all palm oil imports landed on the East Coast.

Agricultural commodities use the US ocean transportation network extensively to serve global customers.

Volume of freight by mode (million tonnes/year)

250 100 50

Interstate highway

Non-interstate highway

Railroad

Inland waterway

Top 3 palm oil ports of entry

The WorldCity research group reported that in 2019, the top three ports of entry for palm oil were the Port of New Orleans in Louisiana, Port of Savannah in Georgia and Port of New York in New York (see Table 1, following page). These ports have the facilities to handle palm oil shipments.

The New Orleans Port brings all modes of transportation (ocean, barge, rail, and truck) together by giving ocean-going vessels access to ports 228 miles upriver from the Gulf of Mexico, linking them with the Gulf of Mexico, Caribbean Sea, Atlantic Ocean and Panama Canal.

New Orleans is also an important port region for US agricultural imports of bulk commodities like coffee and edible oils such as palm oil and coconut oil (see Table 2, following page). Because of its strategic location, agricultural imports that transit through New Orleans come from all over the world. Some of the top origin countries are Canada, Malaysia, Indonesia, Brazil and Mexico.

The top three ocean carriers which moved about 46% of agricultural imports through New Orleans were Cargill, Great White Fleet and Raffles Shipping & Investment (see Table 3, following page).

The second largest port of entry for palm oil; Port of Savannah, is located on the US Eastern Seaboard just up the Savannah River from the Atlantic Ocean.

It is operated by the Georgia Ports Authority. The Port of Savannah is the

fourth largest container port in the USA, handling more than 2.9M 20-footequivalent units of containers annually.

The port imports more than 2M tonnes of agricultural products every year, the top agricultural imports being sugar, palm oil and beer. The port imported 27% of US waterborne imports of palm oil and 34% of palm kernel oil (in 2011). The top origin markets were Panama, Malaysia, and Brazil while the top shipping lines are Navesco SA, Maersk and Cargill International (see Table 4, above right).

Expanding the Malaysian palm oil market in the food sector within the East Coast with a main focus on the usage of palm oil in bakery, snack food and dairy products is a progressive way forward. These three market sectors offer huge demand potential for palm oil.

There are opportunities for Malaysian companies to establish palm oil handling and redistribution centres at US ports. This could pave the way for the market expansion of Malaysian palm oil within the USA’s East Coast. ● This article is based on the report ‘Logistical supports for palm oil market expansion in the United States’, written by Zainuddin Hassan and Nur Adibah of the Malaysian Palm Oil Council and published on 20 July

Rank Port % of palm imports 1 New Orleans 35.7 2 Savannah 30.6 3 New York 14.3 4 Stockton 6.7 5 Richmond 5.6 6 Charleston 3.9 7 Houston 1.5 8 Long Beach 0.5 9 Los Angeles 0.4 10 Boston 0.3

Table 1: Top 10 arrival ports for palm oil, 2019 (Source: Datamyne.com)

Rank Shipping line

1 Cargill International 2 Great White Fleet 3 Raffles Shipping 4 Mediterranean Shipping 5 Hapag Lloyd Line

% of total arrivals

21 14 11 8 6

Source: Port Import Export Reporting Service (PIERS)

Table 3: Top shipping lines moving US waterbourne agricultural imports through New Orleans port region

Rank Commodity

1 Palm oil 2 Coffee 3 Bananas 4 Palm kernel oil 5 Coconut oil

% of total imports

22 14 13 11 8

Source: Port Import Export Reporting Service (PIERS)

Table 2: Top US agricultural imports through New Orleans port region

Rank Shipping line % of total arrivals

1 Navesco 2 Maersk 3 Cargill International 4 Hapag Lloyd Line 5 Mediterranean Shipping 30 6 5 5 5

Source: Port Import Export Reporting Service (PIERS)

Table 4: Top shipping lines moving US waterbourne agricultural imports through Port Savannah