OFI March/April 2019 by Quartz Business Media

OILS & FATS INTERNATIONAL

MARCH/APRIL 2019 â&#x2013;ª VOL 35 NO 3

OLIVE OIL Processing for quality

CANNABIS CBD OIL Meeting a high demand

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CONTENTS

OILS & FATS INTERNATIONAL

IN THIS ISSUE – MARCH/APRIL 2019

FEATURES

Oleochemicals

NEWS & EVENTS

OLIVE OIL

Jordan’s unique heritage With a history of thousands of years, Jordan’s olive oil industry meets domestic demand as well as several export destinations

Opportunities in India Malaysian palm oil could be a suitable feedstock for India’s steadily expanding oleochemical and surfactants industry

Cannabidiol oil

Comment

Cannabis CBD market on a high

News

Tensions grow as China halts Richardson’s canola shipments

Biofuels News

8 28 20

Processing for quality Many processing factors aﬀect the quality of olive oil including harvesting, transport and storage conditions, crushing speed and malaxation time

Meeting a high demand Demand for cannabidiol (CBD) oil and products is growing for medical and cosmetic applications

Plant & Technology

Global round-up of projects The latest projects, technology and processing news around the world

Malaysia ﬁghting EU palm oil biofuels ban

Biotech News

Illegal GM rapeseed dug up in France and Germany

Transport News

VTB agrees deal to acquire Novorossiysk grain terminal

Renewable News

Wilmar sells Lavéra ethoxylation plant

International Market Review

Global update

Diary of Events

International events listing

Statistics

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Contents MarchApril.indd 1

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OFI – MARCH/APRIL 2019

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EDITOR'S COMMENT

OILS & FATS INTERNATIONAL

VOL 35 NO 3 MARCH/ APRIL 2019

EDITORIAL: Editor: Serena Lim serenalim@quartzltd.com +44 (0)1737 855066 Assistant Editor: Gabriel Day gabrielday@quartzltd.com +44 (0)1737 855157 SALES: Sales Manager: Mark Winthrop-Wallace markww@quartzltd.com +44 (0)1737 855114 Sales Consultant: Anita Revis anitarevis@quartzltd.com +44 (0)1737 855068

Cannabidiol (CBD) has recently become a trendy new ingredient in drinks, foods and cosmetics, as well as for medical applications. CBD is one of the two most common cannabinoid compounds found in the cannabis plant, the other being tetrahydrocannabinol (THC), the psychoactive ingredient that gets people stoned. CBD doesn’t make a person high but the market for it is skyrocketing, with predictions that the global market value for CBD hemp oil alone will reach US$1.1bn by the end of 2025 and the whole cannabis market poised to hit US$22bn by 2020 (see feature, p28). So what is driving the growth of this industry?

PRODUCTION: Production Editor: Carol Baird carolbaird@quartzltd.com CORPORATE: Managing Director: Steve Diprose stevediprose@quartzltd.com +44 (0)1737 855164 SUBSCRIPTIONS: Elizabeth Barford subscriptions@quartzltd.com +44 (0)1737 855028 Subscriptions, Quartz House, 20 Clarendon Road, Redhill, Surrey RH1 1QX, UK © 2019, Quartz Business Media ISSN 0267-8853 WWW.OFIMAGAZINE.COM

A member of FOSFA Oils & Fats International (USPS No: 020-747) is published eight times/year by Quartz Business Media Ltd and distributed in the USA by DSW, 75 Aberdeen Road, Emigsville PA 17318-0437. Periodicals postage paid at Emigsville, PA. POSTMASTER: Send address changes to Oils & Fats c/o PO Box 437, Emigsville, PA 17318-0437 Published by Quartz Business Media Ltd Quartz House, 20 Clarendon Road, Redhill, Surrey RH1 1QX, UK oilsandfats@quartzltd.com +44 (0)1737 855000 Printed by Pensord Press, Gwent, Wales

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Cannabis CBD market on a high

Oils & Fats International

“In the last few years we’ve seen more and more people across the globe recognise the therapeutic benefits of CBD and cannabis and it’s beginning to become more commonplace,” says CBD oil producer Endoca. “We’ve also seen destigmatisation of the cannabis plant.” Legislation is relaxing, with Canada becoming the second country in the world to legalise recreational marijuana last year (Uruguay was the first in 2013). More importantly with regards to CBD, the US Farm Bill passed in late 2018 now allows the growing of hemp (used to produce a wide range of THC-free CBD products) and the sale of hemp-based products. In June last year, the US Food and Drug Administration also approved the CBD-derived drug, Epidiolex, for the treatment of two rare forms of epilepsy. Medical companies have been looking at CBD to treat conditions such as epilepsy, Alzheimer’s, inflammation and depression. There are creams for muscle aches or chronic pain. The cosmetics industry says CBD contains anti-inflammation properties and can be used to treat skin conditions such as acne, eczema and psoriasis. CBD is being added to foods such as sweets, snack bars, ice cream and salad dressings, while market research firm Euromonitor says CBD-infused drinks will be a major opportunity for the soft drinks industry. (Beer brewers have already moved into the cannabis space with Heineken’s Lagunitas craft brewer launching Hi-Fi Hops – a THC-infused sparkling water – last year and other brewers investing or looking to launch cannabis drinks in Canada). A Coca-Cola spokesman told Bloomberg last year that it was “closely watching the growth of non-pyschoactive CBD as an ingredient in functional wellness beverages around the world”. But while the CBD market is clearly growing, legislation will remain a key issue to its widespread adoption. In Europe, CBD is listed as a legitimate formulation tool in the EU Cosmetics Ingredients Database, but is also classified as a novel food and is regulated for medicinal purposes. In the USA, the FDA still needs to approve the addition of CBD to food, drinks and cosmetics on a national scale. In addition, the recent surprise resignation in March of FDA head Scott Gottlieb leaves CBD regulation in some limbo. One thing is for sure – we will, no doubt, be reading more about pot stocks and the cannabis and CBD markets in the future. Serena Lim – serenalim@quartzltd.com

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NEWS IN BRIEF CHINA: Beijing has committed to buying 10M tonnes of US soyabeans, according to a 22 February tweet by US Secretary of Agriculture Sonny Perdue. Together with the 5M tonnes of soyabeans US President Donald Trump said in early February that China was buying, the new commitment would mean a total of 15M tonnes of US soyabeans that China would buy since the two countries declared a 90-day ceasefire in their trade war on 1 December, World Grain said. China was the top buyer of US soyabeans before the trade war. SPAIN: Jaén-based olive oil production cooperatives Jaencoop and Olivar de Segura have agreed to merge after several years of negotiations, the Olive Oil Times reported on 11 February. After Dcoop in Málaga, Spain, the new entity would be the second largest producer and distributor of olive oil in the world, with an average annual turnover of more than US$286M. Likely to operate under the Jaencoop name, the new entity would include 28 associations with 26,000 farming partners, 130,000ha of olive groves and an expected production of 120,000 tonnes for the 2018/19 season, Olive Oil Times wrote.

Tensions grow as China halts Richardson's canola shipments China has cancelled a major Canadian grain handler’s registration to export canola to China in the latest flare-up of diplomatic tensions between the two countries, CBC News reports. A Chinese customs document dated 1 March said Richardson International’s registration had been cancelled, the news report said. "Richardson has been directly targeted," company vice-president Jean-Marc Ruest said. "We think this is part of a larger Canada-China issue, and we hope it gets resolved expeditiously." Ruest said the firm believed the issue was tied to a diplomatic dispute between the two countries when Canadian officials arrested Meng Wanzhou, vice-president of Chinese technology firm Huawei, at the request of US tax authorities as she was boarding a flight in Vancouver on 1 December. In late January the US Justice Department charged Huawei and Meng – who is the daughter of Huawei's founder – with con-

spiring to violate US sanctions on Iran. In addition, two Canadians have been detained since December, accused of stealing state secrets from China. Some industry experts believe the cancellation of Richardson’s permit is linked to the diplomatic issues. Almost half of Canada’s US$3.72bn worth of canola exports went to China last year, amounting to some 5M tonnes, according to the Canadian Canola Growers Association. CBC News said Richardson was among the largest individual shippers of the product in the world and China’s move would basically curb or shut down its canola exports. Newly-appointed Canadian Agriculture Minister Marie-Claude Bibeau said the government was “closely monitoring the situation and any potential impact on Canada's agricultural trading relationship with China”.

Kernel buys share of ViOil industrial group Kernel Holding SA, Ukraine’s largest producer and exporter of sunflower oil, announced on 20 February that it had acquired a 5.85% interest in ViOil Holding Ltd, which operates two multi-seed oil extraction plants with a crush capacity of 1.1M tonnes/year. The ViOil industrial group processes sunflowerseed, rapeseed, soyabean and flaxseed into oil and meal, and also provides storage and marketing services for oilseeds and grain crops, exporting its products to more than 60 countries, according

to its website. It operates 13 elevators with a total capacity of 360,000 tonnes. The group has also developed the railway infrastructure of Vinnitsa OFP and is a leading shipper of vegetable oils from Ukraine by flexi-containers.

On 19 February, Kernel also announced that it had acquired Rail Transit Kargo Ukraine (RTK-Ukraine) for US$64M, giving it access to 2,949 grain railcars, making it the second largest grain hopper wagon fleet operator in Ukraine after the state monopoly Ukrainian Railways. “The acquisition will ensure the efficient flow of grains and oilseeds from inland silos to ports as the company’s export volumes increase following the commissioning of the TransGrain Terminal in Chornomorsk port,” Kernel said.

Turkish forces accused of stealing Syrian olive oil for export to EU The Turkish government has been accused of stealing olives from northern Syria and pressing them into oil for export to EU countries, Fox News reported. The accusations come after an investigative report by Spanish newspaper El Público, Turkish government documents obtained and published by Firat News Agency (ANF) and observations by UK-based Syrian Observatory for Human Rights. Turkey invaded the northwestern Syrian province of Aleppo in January 2018 to protect its interests in the region, Fox News said. However, Turkish forces and the mili4 OFI – MARCH/APRIL 2019

General News.indd 2

tias they support have been accused of pillaging olive groves in the Afrin countryside and stealing thousands of olive oil tanks. Locals who spoke with El Público claimed that Syrian olives were pressed in local mills which had been taken over by paramilitary forces. The oil was then transported to Turkey, where it was blended and labelled as Turkish olive oil before being shipped to EU countries. Turkey is the third largest non-EU olive oil exporter to the EU after Tunisia and Morocco. According to interviews El Público conducted with Turkish sources and ANF

documents, at least 5,000 tonnes of olive oil had been produced this way, worth around US$80M. Fox News wrote that while Turkey had not formally acknowledged the accusations, the Turkish Minister of Agriculture told state media late last year that the government would be confiscating olives grown in the Afrin region to prevent them from being processed and sold by Kurdish forces that previously occupied the area. Turkey views Kurdish insurgent groups demanding separation from Turkey as terrorists. www.ofimagazine.com

14/03/2019 11:13

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NEWS

Wilmar takes sole control of Goodman Fielder Singapore-based palm oil giant Wilmar International will become the sole owner of Australasia food manufacturer Goodman Fielder in a deal announced on 11 March. Wilmar will acquire the 50% of Goodman Fielder it does not already own from co-shareholder First Pacific for US$275M. Goodman Fielder manufactures, markets and distributes a wide range of food products across Australia, New Zealand and Asia Pacific including bread, milk, cheese, chicken, flour, cooking oils, spreads, baking ingredients, ice cream and snacks. Its brands include Meadow Lea spreads,

Crisco oils and Gold’n Canola spreads and cooking oils. Wilmar said it believed that significant improvements could be created if it wholly owned and managed Goodman Fielder. The acquisition is expected to be completed in the fourth quarter of this year. Wilmar bought a 10.1% direct stake in Goodman Fielder in 2012, said CGS-CIMB research. In March 2015, Wilmar and First Pacific paid US$934M to buy 100% of Goodman Fielder via FPW Singapore Holdings, the vehicle through which they owned Goodman Fielder.

Goodman Fielder has over 40 manufacturing sites throughout Australia, New Zealand and Asia Pacific and has over 120 food brands. In a statement to the Hong Kong Stock Exchange, First Pacific said FPW Singapore Holdings generated a net profit of US$18M in 2017, compared with US$35M in 2016. Wilmar’s business activities include oil palm cultivation, oilseed crushing, edible oil refining, sugar milling and refining, and the production of consumer products, speciality fats, oleochemicals and biodiesel.

Tilray buys world's largest hemp-based food firm

WORLD: Cargill is investing its own digital engineering resources to develop Hyperledger Grid, a project which aims to streamline supply chains by using blockchain and other digital solutions. “Hyperledger Grid is another way to help make food and agricultural supply chains more inclusive," said Keith Narr, vice president of Cargill Digital Labs on 23 January. Hyperledger Grid is a recently announced project from Hyperledger, a large collaboration hosted by the Linux Foundation and including IT giants such as IBM, SUP, Intel and financial institutions like JP Morgan and Deutsche Börse. Cargill said that Hyperledger Grid could provide a suite of tools which it could use to address agricultural supply chain issues such as traceability, food safety and trade settlement. Blockchain technology is a growing tool in the agricultural industry. The data holding platform – which separates data into blocks, connected by a digital chain – shows tranaction information from owner to owner. In January, IBM Spain and Galprago partnered up to install blockchain technology to trace all stages of extra virgin olive oil production and distribution.

Canadian cannabis company Tilray Inc completed its US$318M acquisition of Manitoba Harvest, the world’s largest provider of hempbased foods, on 28 February. Manitoba Harvest produces and sells hempbased consumer products in Canada and the USA including hemp oil, hemp granola, hemp protein powder, and hemp milk. Tilray produces and distributes medical cannabis including cannabis oil extracts and dried cannabis. “This acquisition will expand Tilray’s portfolio into the natural foods category and bring Manitoba Harvest’s expertise in working with cannabinoid compounds, including cannabidiol (CBD), to Tilray,” the company said. “By leveraging Manitoba’s distribution network, Tilray plans to accelerate its expansion into the US and Canadian markets, where legal, for CBD products.” Tilray said it planned to launch a line of CBD-containing hemp extracts and hemp wellness bars this summer. According to GAI News, Tilray is the largest cannabis company in the world, with a valuation of US$12bn in May 2018, and a market capitalisation of some US$20bn. Tilray president and CEO Brendan Kennedy noted last year that the cannabis industry was

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General News.indd 3

Photo: Winnepeg Sun

IN BRIEF

in the midst of a worldwide paradigm shift. The 2018 US Farm Bill had legalised the industrial production of hemp in the country and removed it from the Controlled Substances Act, effectively treating it as a mainstream commodity crop, GAI News wrote. Marijuana and hemp – both part of the cannabis family – contain various cannabinoid compounds, the two most common ones being cannabidiol (CBD) and tetrahydrocannabinol (THC). THC induces a ‘high’ while CBD does not.

Extreme weather cuts Italy's olive harvest by 57% Italy has experienced a 57% plunge in its olive harvest – the worst in 25 years – as a result of extreme weather events, reports the Guardian. In the past 18 months, Italy had experienced summer droughts, autumn floods and spring ice waves. According to Prof Riccardo Valentini, a director of the Euro-Mediterranean Center for climate change, olive trees

were weakened by these kinds of weather shocks and, even if they recovered, were left more vulnerable to outbreaks of the xylella fastidiosa bacterium and olive fly infestations, which had hit farmers in Italy and Greece. The country’s Coldiretti farmers’ union had estimated that the cost of the olive oil collapse this year had already reached €1bn (US$1.13bn), the Guardian report said on 5 March.

As well as Italy, the European Commission had projected 2018/19 olive harvests to fall by 20% in Portugal and 42% in Greece, which had been hit by extreme drought and then heavy rains. The Guardian said total EU production could be saved by a surge from the bloc’s biggest producer, Spain, which was moving towards fast-growing, high-density olive plantations. www.ofimagazine.com

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BIOFUEL NEWS

Malaysia fighting EU palm oil biofuels ban Malaysia is proposing to halt all expansion of oil palm plantations this year to tackle deforestation concerns as the EU moves to ban palm oil in biofuels. Malaysian Minister of Primary Industries Teresa Kok told the Taipei Times on 1 March that a proposal to be presented to the Cabinet would cap the country’s oil palm plantation area at around 6M ha, up from 5.85M ha at the end of 2018, to give some leeway to growers in the middle of replanting or who had already bought land. On 17 January, members of the European Parliament endorsed new goals for renewable energy and fuels contained in the post-2020 EU Renewable Energy Direc-

IN BRIEF FINLAND: Parliament voted on 6 February requiring transportation fuel to be comprised of 30% biofuel by 2030, with advanced biofuels accounting for 10% of transportation fuel by the same year. The requirements would start to be ramped up in 2021, according to Ethanol Producer Magazine. Additionally, the new law would also require biofuel to be blended into light fuel oil for heating, machinery and ﬁxed engines, starting in 2021 and increasing through 2028, when it would reach 10%. EU/ARGENTINA: Eight Argentine biodiesel makers – Aceitera General Deheza, Bunge Argentina, LDC Argentina, Molinos Agro, Oleaginosa Moreno Hermanos, Vicentin, Cargill and COFCO International Argentina – will be allowed to export to the EU without paying duties as part of the two countries’ agreement to end their long-running trade dispute, the EU Oﬃcial Journal said on 12 February. The producers would be allowed to export a maximum of around 1.2M tonnes/year of biodiesel without 25%-33.4% duties as long as they meet a minimum price scheme. 8 OFI – MARCH/APRIL 2019

Biofuel news MarchApril.indd 2

tive (REDII). On 13 March, the European Commission (EC) adopted a draft delegated act specifying the criteria for determining high-Indirect Land Use Change (ILUC)-risk feedstock under REDII, classifying palm oil from large plantations as unsustainable. According to Euractiv, the delegated act will be assessed by the European Parliament and EU member states, which can either approve or reject it in the next two months, as no amendments are allowed. However, the period can be extended for another two months if requested by the Parliament or Council. The delegated act has been criticised by the European association of farmers and

cooperatives (Copa-Cogeca), which said it was “littered with loopholes”. Copa-Cogeca said the act excluded palm oil side streams from its scope, and exempted palm oil cultivated by smallholders (cultivating less than 5ha) or produced on “unused” land. “Under such provisions, there is a signiﬁcant risk that the use of palm oil for energy will increase.” The Taipei Times said the Council of Palm Oil Producing Countries, which included leading producers Indonesia and Malaysia, was planning to challenge the act through bilateral consultations, as well as through the World Trade Organization and the Association of Southeast Asian Nations.

Paraguay to build renewable diesel complex Paraguay President Mario Abdo Benítez signed an agreement on 25 February for the construction of a renewable diesel plant utilising soyabean oil, animal fats and used cooking oil, Biodiesel Magazine reports. The US$800M Omega Green complex would be South America’s ﬁrst second-generation biofuels project of its kind, according to Brazilian investment holding company ECB Group. The plant would be capable of producing up to 693,000 gallons (≈1,112 tonnes)/day of renewable diesel and synthetic

paraﬃnic kerosene, mostly destined for export markets such as the Europe and the USA. The hydrogen required for the renewable diesel hydrotreatment process would come through electrolysis of water using Germany-based ThyssenKrupp technology. Crown Iron Works would supply soyabean processing equipment, including oil extraction and treatment, and Honeywell’s UOP would supply a modular hydro-treatment plant. The complex would be fuelled by renewable energy and

feature steam generation from biomass and the treatment of all wastes and by-products, Biodiesel Magazine said. The plant would be built on the banks of the Paraguay River, with a logistics port and terminal, and add more than US$8bn to Paraguay’s estimated GDP over 10 years, beneﬁting some 10,000 small farmers with added soyabean demand. Construction was due to start this year and take 30 months, with full production projected by 2022.

EPA releases E15 ethanol and RIN proposals

On 12 March, the US Environmental Protection Agency (EPA) released its proposed rule to allow the year-round sale of E15 ethanol. Currently, 15% blends of ethanol in petrol are restricted in certain markets between 1 June and 15 September due to concerns that E15 contributes to smog in hot weather. US President Donald Trump promised farmers

and biofuel producers last year that his administration would lift the summertime ban on E15 to help boost demand for the corn-based fuel. The Ethanol Producer Magazine said the EPA’s proposed rule also included provisions to deter speculation in the renewable identiﬁcation number (RIN) market. A RIN is a serial number assigned to a batch of biofuel to track its production, use and trading. The EPA said the proposed RIN changes would “bring greater transparency to the market and deter price manipulation”. Proposals include bans on parties not involved in the fuel supply chain from trading RINs; public disclosure when RIN holdings exceed a certain threshold; and quarterly – instead of annual – sales of RINs to prevent “hoarding”. However, the Renewable Fuels Association urged the EPA to separate RIN reform from the E15 rule in order to pass the E15 rule before 1 June. Public comments on the rule must be submitted by 29 April. www.ofimagazine.com

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BIOTECH NEWS IN BRIEF USA: A coalition of 1,600 US farmers called A Fresh Look has launched a line of ‘pro-GMO’ chocolate bars to inform the public about the positives of GM crops. In a press release on 5 February, A Fresh Look said climate change threatened the cacao tree, which could go extinct by 2050. It said each Ethos Chocolate bar used ingredients that were symbolic of a GMO crop story including the cacao tree in the Dominican Republic; the papaya industry in Hawaii; and the orange tree in Florida. GERMANY: Bayer reported a net loss of US$4.46bn in its fourth quarter, compared with a profit of US$168M a year ago, mostly a result from writeoffs for consumer health brands it was selling, a pharmaceuticals plant it was closing and costs linked to buying Monsanto last year, the Wall Street Journal (WSJ) reported on 27 February. Bayer had made a US$695M provision in the fourth quarter, mainly for legal defence costs in the next three years, but had not provisioned for potential plaintiff payouts. Last year, a US groundskeeper was awarded US$78.5M after winning a cancer trial against Bayer, which is appealing the verdict. Bayer’s shares were set to remain under pressure until more cases were tried, WSJ said.

Illegal GM rapeseed dug up in France and Germany French and German farmers have been forced to dig up thousands of hectares of rapeseed after authorities found an illegal GM strain mixed in with seeds they purchased from Bayer-Monsanto, RT reported on 8 February. Authorities discovered the illegal seeds in three batches of rapeseed last autumn but the public had only just been notified, the news agency said. Bayer, which acquired Monsanto last year, issued a recall for the product but by the time farmers had learned about the issue, some seeds had already been planted, covering 8,000

ha in France and 3,000 ha in Germany. Bayer-Monsanto estimated the number of rogue seeds at only 0.005% of the total volume of rapeseed sold to both nations under the brand name DeKalb, which was acquired by Monsanto in 1998. Both countries however, have a ban on GMO cultivation with strict penalties for “accidental” contamination of standard crops. According to Bayer’s French COO Catherine Lamboley, farmers had also been barred from growing rapeseed next year “to avoid a re-emergence of the GM strain”. The compa-

ny had offered to compensate farmers at a rate of €2,000/ ha, which would total around €20M between both countries, RT wrote. Lamboley said the cause of contamination was unknown since the seeds were produced in Argentina in a GMO-free area. The company had chosen to immediately halt production of rapeseed in Argentina. Both France and Germany have banned their farmers from growing GM crops following an EU directive in 2015 which gave EU states the power to restrict or ban GM crop cultivation in their territory.

Pipeline buys SunOpta’s non-GMO business

US organic and non-GM food supplier Pipeline Foods LLC has acquired the organic and non-GM soya and corn business of Canada’s SunOpta Inc for US$66.5M. The acquisition complemented Pipeline Foods’ existing footprint in Canada and Argentina by adding four facilities in the USA, bringing its total operational footprint to 12 facilities, Pipeline Foods said on 26 February. Chief executive Eric Jackson said the deal

was a critical next step in the firm’s goal, when it entered the market in 2017, to dramatically increase the amount of organic and non-GM grain grown in the USA (see photo, left). The company would now be able to offer food-grade organic and non-GM corn and soyabean whole and milled ingredients, as well as complementary feed ingredients. As part of the transaction, which closed on 22 February, Pipeline and SunOpta have entered into a supply agreement for certain ingredients used in SunOpta’s consumer products business. SunOpta sources, processes and packs non-GM and organic raw materials from over 60 countries, including soyabean, corn, sunflower, coconut and cocoa products. SunOpta said it would continue to operate its other North American-based sourcing and supply operations, as well as its European-based sourcing and supply platform, Tradin Organic.

Roundup a ‘substantial factor’ in causing man’s cancer A US jury has found that Bayer’s glyphosate weedkiller was a “substantial factor” in causing a man’s cancer, BBC News reports. The jury in San Francisco ruled that Roundup, the weedkiller produced by pharmaceutical group Bayer, had contributed to causing non-Hodgkin’s lymphoma in California resident Edwin Hardeman. In the next stage of the trial, Hardeman’s lawyers are expected to present evidence showing Bayer’s efforts to influence scien10 OFI – MARCH/APRIL 2019

Biotech news.indd 2

tists, regulators and the public about the safety of its products, according to the BBC News report on 20 March. Bayer, which acquired Roundup as part of its US$66bn takeover of Monsanto last year, said it was disappointed with the jury’s initial decision. The trial is the first US “bellwether” case aiming to reach a large-scale resolution over Roundup. More than 760 of the 11,200 Roundup cases in the USA had

been consolidated at the San Francisco court, which heard that Hardeman had “extreme” exposure to Roundup. He was diagnosed with non-Hodgkin’s lymphoma in February 2015. Brian Stekloff, a lawyer for Bayer, argued that the cause of Hardeman’s cancer – and non-Hodgkin’s lymphoma generally – was not known. BBC News said another trial was due to begin in California on 28 March. www.ofimagazine.com

20/03/2019 12:27

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OFI – MARCH/APRIL 2019

TRANSPORT NEWS IN BRIEF CANADA: Timber Investments Ltd has bought a 51% stake in grain containerisation firm Columbia Containers Ltd (CCL) from Canada’s Providence Grain Group (PGG). CCL operates Canada’s largest grain container transloading facility on the south shore of Burrard Inlet in Vancouver, British Columbia. “With the completion of a recent expansion, CCL has two separate loading systems with a total capacity exceeding 1.5M tonnes, the ability to receive and unload unit trains on site, and over 10,000 tonnes of grain storage,” PGG said on 11 February. PGG will retain a 49% stake in CCL. The producer-owned agricultural commodity business offers grain handling, storage, trading and logistics services, as well as hedging, futures and options for grains, pulses, oilseeds and organic crops. Timber Investments Ltd. is a privately-owned investment company located in Vernon, British Columbia. “PGG expects the investment by Timber, which has interests in two other west coast logistics operations, will benefit CCL through operating synergies,” PGG said.

VTB agrees deal to acquire Novorossiysk grain terminal Russia’s second largest bank, VTB, reached an agreement on 14 February to buy Novorossiysk Grain Terminal, one of country’s largest port terminals for the transshipment of grains and oilseeds. The acquisition from Novorossiysk Commercial Sea Port (NSCP) would give VTB more control over Russia’s main

deep-sea grain export hub, World Grain reported. Russian regulators had already approved the deal, which was expected to close in the second quarter of this year. Last August, VTB acquired a 10.93% stake in Novorssiysk Grain Plant, one of the largest grain terminals in Russia. VTB now had a 33.18% stake in No-

vorossiysk, World Grain wrote. Novorossiysk’s main activities include grain storage, processing and sea port and railway loading and unloading. The group’s facilities are located at the port of Novorossiysk on along Russia’s Black Sea coast. NSCP is the largest port operator in Russia by cargo turnover, World Grain said.

POSCO buys 75% share of Mykolaiv terminal

Korea’s largest trading company, POSCO Daewoo, has signed an agreement with Ukraine’s Orexim Group to buy 75% of an export grain terminal in Mykolaiv, southern Ukraine, one of the main export hubs around the Black Sea, reported PortSEurope on 14 February. The 2.5M tonnes/year terminal is scheduled for completion in July. Orexim Group is one of Ukraine’s leading

logistics companies, exporting 1.4M tonnes of sunflower oil in 2017, representing 30% of total outbound sunflower oil shipments, according to the Korea Times. With the acquisition, POSCO Daewoo would become the first Korean firm to operate an overseas grain terminal, and it would have logistics control over a significant amount of Ukrainian grain coming into the terminal, the South Korean trading firm said. Approximately 22% of Ukraine’s grain exports went through Mykoliv port, it added. “This [acquisition] has significant meaning as it contributes to Korea’s food security,” a POSCO Daewoo official said. “We aim to become Korea’s largest food resources company, capable of handling 15M tonnes of food.” POSCO Daewoo imports and trades agricultural commodities such as rice, wheat, soyabeans, corn and oils and fats. It has invested in crop distribution facilities such as grain silos and export terminals and and has invested in large scale oil palm oil plantations and facilties spanning 34,000ha in Papua, Indonesia.

GrainCorp sells bulk liquid terminals business to ANZ Terminals Australia’s largest edible oil business, GrainCorp Ltd, has agreed to sell its bulk liquid terminals business to ANZ Terminals Pty Ltd for approximately (US$246M). The Australian Bulk Liquid Terminals business – which GrainCorp acquired in 2012 – runs eight liquid terminal sites across Australia, with a total storage capacity of about 211,000m3, GrainCorp said in a press release on 4 March. “The sites specialise in the storage and handling of bulk liquid fats and oils, fuels and chemicals for a range of customers, including GrainCorp Oils. As part of the sale, GrainCorp Oils will enter into a long-term storage agreement with ANZ Terminals. GrainCorp said the Australia Bulk Liquid 12 OFI – MARCH/APRIL 2019

Transport news March.indd 2

Terminals business was increasingly serving other sectors, in addition to the edible oils commodities more closely aligned with GrainCorp’s core business. “Divesting the asset, while putting in place a long-term storage agreement, allows us ongoing access to the storage needed to support our oils business, whilst releasing capital and unlocking shareholder value,” said GrainCorp CEO Mark Palmquist. GrainCorp said the sale was the outcome of an ongoing portfolio review and it retained ownership of its New Zealand bulk liquid terminals, although it was reviewing options for this business. The sale is subject to regulatory approvals and a number of conditions.

GrainCorp is Australia and New Zealand’s largest integrated edible oils business and also handles and stores grain and oilseeds in Australia. It has a combined storage capacity of 20M tonnes in Australia and operates seven bulk grain export elevators carrying an average of 5M tonnes each. It crushes canola, and produces canola oil and meal for domestic and international markets, with two plants in Victoria and Western Australia producing about 120,000 tonnes of oil and 180,000 tonnes of meal annually. ANZ Terminals is an independent provider of bulk liquid storage terminals across Australia and New Zealand with a total storage capacity of some 426,000m3. www.ofimagazine.com

14/03/2019 11:27

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OFI – MARCH/APRIL 2019

RENEWABLE NEWS

Wilmar sells Lavéra ethoxylation plant Asian agribusiness giant Wilmar International Limited completed the sale of its French ethoxylation plant to multinational chemicals firm Ineos Oxide at the start of this year. Financial terms of the sale of the Lavéra ethoxylation plant by Wilmar France Holdings SAS to Ineos Chemicals Holdings Luxembourg SA were not disclosed. Wilmar acquired the plant in 2014 when it bought the European commodity surfactants business of Huntsman Corporation. As part of the sale, Wilmar Europe Trading, a wholly-owned subsidiary of Wilmar, and Ineos Europe AG have concluded

a toll manufacturing agreement which guarantees Wilmar a long-term supply of surfactant products produced at Ineos’ network of ethoxylation plants located across Europe. “Wilmar now has access to five locations for ethoxylation in north-western and southern Europe and will continue expanding its activities in the European surfactants market built around the natural fatty alcohol plant which it owns and operates in Rozenburg, the Netherlands,” the company said in a press release on 3 January. “The sale consolidates our position as a reliable partner to the European soap and

detergent industry.” Wilmar’s business activities include oil palm cultivation, oilseed crushing, edible oils refining, and the manufacturing of consumer products, speciality fats, oleochemicals, biodiesel and fertilisers. It has over 500 manufacturing plants including oleochemical facilties in China, Malaysia, Indonesia and the Netherlands. Industrial ethoxylation is primarily performed upon fatty alcohols in order to generate fatty alcohol ethoxylates (FAEs), which are a common form of nonionic surfactant, used widely in personal care, cleaning and cosmetic products.

IN BRIEF

POET launches corn oil-based asphalt product

SPAIN: Spanish sugar and oilseeds cooperative Sociedad Cooperativa General Agropecuria (ACOR) announced late last year that it had signed an agreement with Italian bioplastic producer Bio-on to explore the feasibility of building a plant in Spain to produce polyhydroxyalkanoates (PHA) bioplastics from the co- and by-products of sugar beet processing. ACOR groups more than 4,000 members who produce sugar, oilseeds, oils, meal and biodiesel.

US biofuels producer POET has entered the asphalt market with a corn-oil-based product now being used by construction companies to modify or rejuvenate asphalt, the company said on 29 January. “JIVE is being used today to make roads more resilient in both high- and low-temperature conditions. It helps roads resist cracking in cold weather and rutting during the warm season. It is also used to soften old asphalt so that it can be recycled into new roads,” POET said. “Companies have used JIVE over the past year to pave high-traffic highways in places like New Jersey and roads exposed to fierce elements in Utah, parts of Canada and elsewhere,” said Matt Reiners, vice president of business development for POET

AUSTRALIA: Bod Australia is planning to launch a new hemp seed oil and Manuka honey skin care range in the next few months, reported Cosmetics design-asia on 14 February. Simone Cunico, head of communications at Bod Australia, said hemp seed oil contained omegas 3, 6 and 9, and had anti-inflammatory benefits that could help skin conditions. Bod Australia already produced medicinal cannabis products and had access to quality hemp seed oil, Cosmetics design-asia said. Bod Australia’s True Earth brand would initially consist of six products including a cream cleanser, face serum and body oils. 14 OFI – MARCH/APRIL 2019

Renewables news.indd 1

POET says its corn oil-based product can be used to modify or rejuvenate asphalt across US roads and highways

Nutrition. With 264,000km of highway across the USA and annual state and local government expenditures of US$175bn on highway construction and maintenance, JIVE was a high quality and environmental asphalt binder or additive to meet a signifi-

cant need, POET said. “At full JIVE production, POET could improve enough roadways to circle the globe each year.” POET has 27 US biofuel production plants and JIVE is produced as a co-product of the biofuel process.

Nisshin OilliO chooses Hammonia Oleo as distributor Japan’s Nisshin OilliO Group has selected Hammonia Oleochemicals GmbH as its distributor of beauty and personal care ingredients in Germany, effective 1 February. Nisshin OilliO manufactures, processes and distributes edible oils, with operations in oils and fats, modified fats, fine chemicals and foods. Its fine chemicals unit manufactures and supplies cosmetic raw materials and chemical ingredients. “We are very impressed with Nisshin OilliO’s range of speciality ingredients for the beauty and personal care market,” said Marc Schlüter, managing director at Hammonia Oleo, which markets

and distributes oleochemicals, waxes and natural products and their derivatives. Hammonia Oleo said Nisshin OilliO’s portfolio of products included low and high polar esters, as well emulsifying and gelling agents. “Our products are utilised to manufacture high quality cosmetic products and have been used for many years in a large number of international brands”, said Keiichi Oyama, assistant general manager of fine chemicals at Nisshin OilliO. “Working with Hammonia Oleo will enable us to access a larger marketplace in Germany than we currently cater to.” www.ofimagazine.com

14/03/2019 10:03

INTERNATIONAL MARKET REVIEW

World still awash with soya Ample soyabean supply, questions over palm oil demand from the world’s top importers and oilseed price weakness will contribute to volatility in prices and product markets John Buckley

markets are on tenterhooks about how a more formal trade pact between the two countries will shape up later in March. There is also the nagging question of China’s spreading outbreak of African swine flu disease, which some analysts think has knocked about 5% off its soya meal consumption. The severity of this problem is underlined by the fact that Chinese hog prices have soared to their

highest level in 14 months. The last US Department of Agriculture (USDA) forecasts have Chinese imports down from 94M tonnes last season to 88M tonnes but some Chinese officials have been talking 85M tonnes or less. Hopes of a sustained improvement in Chinese demand for US soyabeans have been the main factor keeping the bellwether CBOT price over US$9/ u

The first quarter of 2019 has offered plenty of ‘fundamental’ fodder for price volatility in the oilseed and product markets. Significant cuts in Brazilian and US crop estimates still leave the world awash with soyabeans. Rapeseed supply is tighter in Europe from lower domestic crops but much looser than expected in Canada and promises to expand again in the former Soviet region. Palm oil supply is a bit less flush than expected a few months ago, with biodiesel promising to drain much of the record accumulated surplus stocks over time. However, the peak yield season is still ahead, amid persistent concern about sustaining demand from top markets – Europe, India and possibly China as well. Sunflower oil, meanwhile, continues to expand market share in the food sector. Overall, a price weakness in oilseeds, led by soya, contrasts with a firmer trend in oil markets, which is positive for crush margins and features encouraging record levels of US throughput, as well as increased processing in Western Europe.

The China factor

As markets ponder these supply-side issues, the dominant demand issue remains China. US President Donald Trump’s December trade truce with Chinese Premier Xi Jinping has already resulted in a surge of Chinese purchases of US soyabeans and plenty of pledges of more on the way. However, after the season’s dreadful start, the total for this trade in 2018/19 will nowhere near match ‘normal’ levels. That’s shown by US exports to all sources which, despite some windfall trade won in other markets at these low prices, is still running some 30% down on the year. As this review goes to press, the www.ofimagazine.com

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Figure 1: Crude vegetable oil prices (US$/tonne)

Figure 2: Malaysian palm oil futures, 2015-2019 (US$) u bushel for most of 2019 to date – but

that market has fallen recently, even as the USDA predicted a 4.7% drop in this spring’s US planted hectarage. That would produce a 117/118M tonne crop – hardly the foundation for a bull market, given the USA should start the new season with a record 24.5M tonnes of surplus stocks – more than double the normal level. The other soya fundamentals going forward include a lower than expected – but still huge - Brazilian crop which started harvest earlier than usual and is already undercutting US prices. Recent estimates for this have fallen to around 113/115M tonnes – a far cry from the initial 130M-plus talk, yet still the third largest crop ever. The 5-7M tonne drop against last year also coincides with a forecast 17M tonnes-plus bounceback in Argentina, whose drought losses last year arguably rescued the soya price from a more disastrous drop. Overall soya production for the current season has been clipped by about 9M tonnes since my last review, taking 16 OFI – MARCH/APRIL 2019

John Buckley March.indd 4

carryover stocks down by about 8M tonnes. Clearly there will be some big reverses to the past season’s unusual trade patterns, with Argentina reclaiming some of its leading share of product export markets and some soyabean trade as well, posing a further challenge for US exporters. Against this backdrop, it is no wonder that some USDA officials at their recent annual ‘Outlook Forum’ suggested that it could take years to clear the US soya surplus and allow prices to get up off the floor. One bright spot for soyabean oil is biodiesel use which, in the USA itself, is seen jumping from 3.2M tonnes to about 3.7M tonnes this season. The EU will also allow a maximum of around 1.2M tonnes/year of Argentine biodiesel imports duty free, as part of its agreement to end its long-running trade dispute with Argentina.

Can palm prices rally?

The palm oil market has had many false dawns over the past year or two of

Source: John Buckley

INTERNATIONAL MARKET REVIEW depressed prices. On the benchmark Malaysia Bursa contract, the dollar equivalent price had dropped by 17% last year and has since managed a 12% rally, only to fade to just 1.4% recently. However, the stars may finally be aligning more favourably this year as slowing production gains run up against a further massive hike in Malaysia and Indonesia’s biodiesel use, drawing down some of those massive origin tank stocks. Analysts at a recent industry conference in Kuala Lumpur suggested reduced inputs, labour shortages and ageing trees are already inhibiting output growth. Oil World’s expert, Thomas Mielke, meanwhile saw Indonesia, with a rising biofuel mandate, making 7.5M tonne of biodiesel this year. Another encouraging bit of news for palm oil producers was third largest importer China reportedly agreeing to buy an extra 1.62M tonnes from Malaysia, implying an annual flow of 4.7M tonnes in that direction. Malaysian traders had feared a US trade deal with China might bolster soya’s pre-eminent position in this mega market. China is forecast to use about 16.7M tonnes of soya this season against about 6M tonnes of palm oil but says it wants to diversify suppliers in light of its trade disruption with the USA. Demanding some caution towards these demand forecasts is the fact that Chinese imports from Malaysia actually fell sharply in February to one quarter of the volume it shipped in the previous month. Conversely, a big oilseed crop in top palm customer India is expected to boost its rapeseed oil output by 500,000 tonnes, covering its expected demand growth for edible oils. The main cloud overhanging palm oil demand is the EU’s plans to curb palm use in its biodiesel programme on the grounds it has caused vast environmental damage. Europe has been regularly taking in 7M tonnes/year of palm oil – as much as 15% of world trade in the oil. There has been talk of allowing some exemptions in the EU’s plan for ‘less damaging’ smallholder producers – or those developing through expanding yields rather than land use – but the lion’s share of trade is in the hands of larger operators. Last year, Malaysian output made a big seasonal leap in March, then flattened until the late summer/autumn peak period, when it went sharply ahead again, probably due to trees resting after a big recovery in 2017 from earlier El Niño dryness. Competition is another factor. Indonesia recently sounded out India to cut its www.ofimagazine.com

20/03/2019 11:32

INTERNATIONAL REVIEW 45% import duty on crude palm in return for easier access to the Indonesian sugar market – one of the world’s largest. But Indian processors want more, not less, tariff protection from imports.

Mixed fortunes for rapeseed producers

It has not been a good year for the Canadian canola industry, facing much weaker than expected market prices as excessive stocks run up against an uncertain export outlook caused by its political rift with top customer China. Leading canola shipper Richardson has seen its exports to China blocked and other suppliers have reportedly run into increasing barriers – including stricter requirements for GM certification for rapeseed oil and meal. China imports are still forecast 600,000 tonnes higher this season at 5.3M tonnes but that may be optimistic. In total, Canada expects to ship 11.2M tonnes of canola this season. Lower than expected Canadian exports will lead to higher ending stocks. Canadian government body AAFC recently reported that exports had dropped twice as much as domestic crush had risen, much of that down to lost Chinese orders. A thaw in US/ Chinese soya trade could also rob Canadians of canola sales to the world’s largest rapeseed (and oilseeds) importer. On the plus side, Canada’s largest grain handling company, Viterra, suggested the EU may need to import as much 800,000 tonnes against a normal 600,000 tonnes amid a crop shortfall from rival supplier Australia. The USDA has just cut its estimate of Australia’s crop to just 2.2M tonnes against last year’s 3.67M tonnes and the previous season’s 4.31M tonnes. So far this season, EU supply has been supported by ample flows from Ukraine, which shipped out a record 2.4M tonnes last year, 60% of that going to Europe. EU grain lobby Coceral, meanwhile, forecasts the next EU crop at 18.5M tonnes against last year’s 19.7M tonnes and the previous year’s 22.1M tonnes, mainly due sowing cuts in Germany, France and Romania in response to low prices, drought in the planting window and curbs on pesticide use. However, Ukraine is expected to boost its area by as much as 29% and Russia by some 14%. The EU has also been facing a weaker market for rapeseed oil. Rapeseed oil is, by far, the main contributor to EU industrial use, led by biodiesel, which used in excess of 7M tonnes in recent years against 3.55M tonnes of palm oil and under 1M tonnes of soyabean oil. EU food use of rapeseed oil has also peaked as crop growth stalled and sunflower oil expanded its share in this sector. If the EU does slash palm oil use, rapeseed might be expected to pick up some windfall demand down the road. Ukraine confirmed a 25% increase in its 2018 crop at some 2.75M tonnes and has been producing record volumes of rapeseed oil. Russia is also producing record amounts of the oil from a large 2018 crop.

Sunflower oil expands market share

Interestingly, while Russia is planting more rapeseed for 2019, early signs are that it will backtrack on its expansion in sunflower cultivation. A recent survey suggested a 334,000ha cut in planted area. Last year, Russia grew 12.7M tonnes, and is expected to boost sunflower oil output seasonally by 620,000 tonnes and sustain exports at some 2.3M tonnes. More competitive pricing from expanding supplies, especially from the former Soviet countries, have seen sunflower oil continue to expand its market share this season. On a global scale, sunflower oil contributes about 9% of total oil consumption for all purposes but, within the EU, it now commands almost 31% of food oil consumption versus 25% just four years ago. ● John Buckley is OFI’s market correspondent www.ofimagazine.com

John Buckley March.indd 5

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20/03/2019 11:32

OLIVE OIL

Jordan’s unique heritage

With a history of thousands of years, the Jordanian olive oil industry has managed to satisfy domestic demand, in addition to having a number of major export destinations

n Jordan, located on the east bank of its eponymous river, the olive industry is one of the country’s most important sectors. This is due to the large volume of investment it attracts, estimated at more than 1bn Jordanian dinars (US$1.4bn) in 2010. The country is one of the oldest historic olive habitats in the world and the olive tree is considered to be an important part of Jordanian heritage. Olive trees have been cultivated for olive oil production in the Middle East for over 6,000 years. The earliest evidence of olive stones from settled sites in the Levant – the region covering Cyprus, Israel, Iraq, Jordan, Lebanon, Palestine, Syria and Turkey – can be dated back to the Neptunium period, more than 10,000 years ago. Jordan is home to some of the oldest olive trees in the world, as evidenced by the studies of a French-Jordanian team of archaeologists in 2008, proving that the south Jordan Wadi Rum has been planted with olives trees since 5400 BC. There is a great deal of diversity in Jordan’s olive cultivars and the variation in its climate gives its olive oil a number of unique characteristics.

Olive oil production

Olive growing is spread over two regions in Jordan, in the west and northeast. 18 OFI – MARCH/APRIL 2019

Jordan.indd 2

According to the Department of Statistics of Jordan, the olive growing area – consisting of 12M trees – covers 24% of Jordan’s total arable surface area, accounting for 74% of the surface planted with fruit trees. The growing olive acreage reached 64,000ha in 2016. Average annual olive production over the last five years stands at 151,000 tonnes, while olive oil production totals approximately 23,000 tonnes (see Figure 1, opposite page). As of 2000, Jordan achieved selfsufficiency in the production of both olive oil and table olives, reaching a record high of 37,000 tonnes of olive oil in the 2006/07 crop year. Most of this production is consumed nationally, with the average annual consumption standing at 2.5kg/person. Any remaining production is exported to Jordan’s main markets – Pakistan, Kazakhstan, Saudi Arabia, the United Arab Emirates, Kuwait and Qatar, among others (see Figure 2, opposite page).

Tree varieties

Some 30 different varieties of olive trees can be found in Jordan, with all of them capable of producing high quality extra virgin olive oil (EVOO). Most of the olive trees planted in Jordan are dual purpose varieties used for the production of both www.ofimagazine.com

14/03/2019 10:07

OLIVE OIL

Industry connections

Jordan has 134 oil mills, most of which employ advanced technologies. Olives are harvested manually to guarantee a high quality product and the use of chemicals is kept to a minimum. There is great interest in organic farming and the number of organic olive tree estates is growing in the country. Jordan has been a member of the International Olive Council (IOC) since December 2002, and has participated actively since then, both in the successive International Agreements on Olive Oil and Table Olives and in the working groups created to monitor

olive oil and table olives. The predominant local varieties of olives are Nabali, Rasie Nassohi and Souri, which have been grown in the country for centuries. The Souri variety produces oil with an intense fruity aroma with distinct organoleptic characteristics. Each variety produces different characteristics of olive oil. The non-native varieties grown in Jordan are Gordal, Manzanilla, Arbequina and Picual (Spain); Ascolano, Frantoio and Leccino (Italy); Chemlali (Tunisia); Kalamata (Greece) and Barnea, K-18 (Palestine).

the organisation’s activities. As a result of its membership in the IOC, four tasting panels have been recognised and accredited by the organisation, from a total of seven olive oil tasting panels accredited and administered by the Ministry of Agriculture. There are three further table olive tasting panels. Governmental and non-governmental organisations in Jordan cooperate to improve the olive sector. The Ministry of Agriculture has a strong relationship with the organisations working in the sector, namely the Olive Oil Press Owner Association (OPOA) and the Jordan Olive Products Exporters Association (JOPEA), which works to promote Jordan as a producer and exporter of olive oil. ● This article is based on a March 2018 newsletter report titled ‘Olive Growing in Jordan’ by the International Olive Council

Source: International Olive Council

The main export destinations are Israel, which accounts for 35% of total exports, followed by Saudi Arabia at 21%, the United Arab Emirates at 20%, Kuwait at 12% and the USA at 4%, among others.

Figure 1: Olive oil industry statistics in Jordan, 1990-2018

Jordan also has a considerable production of table olives, with an average of 27,000 tonnes over the last five crop years. Record production was reached in the 2010/11 crop year with 54,000 tonnes. Over the past 25 crop years, Jordanian table olive production has gone from 8,000 tonnes in 1990/91 to 20,000 tonnes in 2016/17, an increase of 150%. Consumption has mirrored trends in production over this period, with current average annual consumption of table olives standing at around 3kg/person. Jordanian exports of table olives in 2016/17 increased by 43% compared to the previous crop year, rising from 7,000 tonnes to almost 10,000 tonnes. www.ofimagazine.com

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Source: International Olive Council

Table olive production

Figure 2: Olive oil exports destinations, 2016 OFI – MARCH/APRIL 2019

14/03/2019 10:07

OLIVE OIL

Processing for quality Many processing factors affect the quality of olive oil including harvesting and transport conditions, crushing speed, sieve grid size, malaxation time and temperature and storage conditions Christoph Sippel The olive tree is one of the oldest plants to be cultivated and is believed to have originated in Iran and Syria around 6,000 years ago. From there, it spread around the whole Mediterranean and, today, the olive tree can be found all over the world. Great developments and changes have taken place in the production of olive oil during the centuries. The first techniques developed for the extraction of olive oil were based on crushing the fruits, breaking the structure, using compression systems like the ‘molae’ and extracting the oil with a wedge or screw press. The modern extraction process to produce extra virgin olive oil (EVOO), 20

OFI – MARCH/APRIL 2019

olive oil processing NEW.indd 2

the highest olive oil category, generally involves the following steps: ▪ Harvest and transport of olives to the mill ▪ Belt elevator with deleafer ▪ Washing ▪ Crushing ▪ Malaxation ▪ Decanter process ▪ Centrifugal olive oil separator (‘polishing’) ▪ Filtration ▪ Bulk storage ▪ Bottling

General aspects

In order to determine processing steps, the olive fruits’ condition, maturity and moisture content must be determined to decide on the most appropriate strategy for paste preparation and oil separation. The fruit condition and water content will also determine if the operator should use processing aids such as talcum powder or enzymes to improve oil extractability and decanter working capacity.

Harvest and transport

It is absolutely necessary to treat olives very carefully during harvest as any damage to the fruits leads to fermentation, which begins after fruits are harvested from the trees. During internal

fermentation, enzymes are activated to destroy the fruit to set the pit free. Therefore, storing olives in the grove over several hours or days should be avoided. The best storage conditions are cold and in shade. Olives should ideally be processed immediately after delivery to the mill or their storage time kept to a minimum.

Deleafing and washing

In the mill, processing starts with the deleafer to get rid of leaves, stems and little twigs. If these are not removed, they may influence the taste of the olive oil. Normally, after the deleafing, the leaves are cut into pieces and used as fertiliser. After deleafing, olives should be washed with clear, cold water to remove dirt and other debris or additives used during the year. Sand can cause serious damage to the hammer mill or quickly wear out a decanter or the separator, reducing their life span. For the cleaning process, it is important to use fresh water and not to use the water already in long circulation as fermentation may already have taken place, impacting the quality of the oil.

Crushing

The next step is crushing the olives into

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OLIVE OIL

Figure 1: Olive oil processing steps u pieces, which can be carried out with

stone mills, metal tooth grinders, or various kinds of hammer mills. The crusher is the most important machine during the process. If the hammers are worn or not in the right position, lubricating effects that cause emulsions may result, which cannot be separated properly during further processing. To reduce this effect, the right speed of the mill must be set and the correct grid size chosen. Normally low-maturity fruits will characteristically require a coarse crushing degree (6-7mm) and, therefore, a wider grid size in the crusher to maximise oil extractability. Riper fruits with softer cell tissues as well as high-moisture fruits are best prepared with smaller grid sizes (4-5mm) to maximize extraction efficiency. High maturity fruits require a larger grid size (6-7mm). The purpose of crushing is to tear the flesh cells apart to facilitate the release of the oil from the vacuoles. De-pitting olives prior to crushing can modify the aromatic profile and phenolic composition of the oil. This practice also reduces extraction efficiency. The aromas produced from de-pitted olives are milder and not so strong. Normally the ground pits are needed as a kind of ‘sandpaper’ during malaxation to facilitate the release of the oils in combination with the fruit enzymes.

Malaxation

Malaxing or mixing the olive paste is the next step, with time and temperature being the most important, and controversial, factors. Many oil producers believe that the 22

OFI – MARCH/APRIL 2019

olive oil processing NEW.indd 3

longer the malaxation time, the more oil can be extracted. The same opinion is also common for temperature. With higher temperatures, the oil becomes more fluid. However, a long malaxation time and high temperature above 27°C causes a loss of aroma and stability. International Olive Council (IOC) guidelines and EU regulations set a limit of 27°C for the production process of the highest quality EVOO. Lower malaxation temperatures tend to generate more aromatic and complex oils but also reduce extraction efficiency. However, a modern decanter minimises the loss of efficiency. In batch processing, the malaxation time comprises three steps – the time for filling the malaxer, the mixing time of the paste and the time for draining the malaxer. In several publications, a malaxation time of about 75 minutes is standard. However, this is too long for an aromatic and highly graduated oil and adjusting malaxation parameters is absolutely necessary. Higher malaxation times maximise paste extractability but reduce the complexity of the oil. Frequently inspecting the paste in the malaxer and looking for the presence of free oil being released from the paste should be performed. The most common mixer is horizontal with spiral mixing blades but vertical types also exist. In summary, malaxing is carried out to soften the cell wall (via native enzymes), improve breaking of the cell walls (utilising pits as cutters) and agglomerate oil droplets from 1μm to >30μm (continuous oil phase). During the malaxing process, the activated enzymes destroy the cells and

allow small oil droplets to combine into bigger ones. However, it is important that the paste is homogenous and no free oil is visible at the surface. The shorter the process time, the less oxidation takes place. Processing aids should be considered when required. Talcum powder and pectinase enzymes can help in improving the physical condition of the paste for better oil extractability. Talcum powder can be added to the paste in the malaxer if the fruits are excessively wet (moisture content >58%) or if the paste looks emulsified in the malaxer. Pectinase enzymes can be added, according to different regulations, to the paste when the fruit is of low maturity (green or turning green). These products usually have a synergetic action when used together and can be added at the same time in the malaxer. However, under normal circumstances, the use of pectinase is not necessary.

Separation (decanter)

During separation, oil becomes separated from the rest of the olive components. There are three fractions which are separated – the water, the oil and the solid fraction. Separation used to be carried out in former times with presses (hence the now somewhat obsolete terms, ‘first press’ and ‘cold press’), but is now done by centrifugation with decanters, except in old facilities still using hydraulic presses. Some decanters are called three-phase because they separate the oil, the water (containing fruit and added water), and the solids separately. Two-phase decanters separate the oil from a wet paste. Using the two-phase process, no water for the decanter is needed, but the pomace still contains the fruit water. The two-phase extraction represents the most modern process. When the paste is processed, it is important to ensure that the oil emerging from the decanter is not too ‘dirty’ with paste as this could mean that the paste feeding-speed is excessively high or that the oil outlets are excessively open. The waste needs to be checked regularly to determine the extent of oil losses, as well as whether pastepreparation decisions were correct and whether to slow down the feeding rate of paste into the decanter.

Centrifugal ‘polishing’

In most cases, the oil coming out of the first centrifuge is further processed to eliminate any remaining water and solids by a second centrifuge that rotates faster. u www.ofimagazine.com

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OLIVE OIL The condition of the oil should be continually inspected. The optimum oil appears clean with a slight milky aspect and low foam content. The foam should look bright with beige aspects but not brown. If it looks like this, the oil contains more proteins and enzymes. If the oil has a shiny aspect, it may mean that there are excessive temperatures in the malaxer, or that excessively warm water was added into the decanter or the vertical centrifuge. The vertical centrifuge has to be visually checked to ensure that no oil is coming out from the water outlet, or water from the oil outlet. It is safe to add a small amount of water to the centrifuge with a similar temperature to the oil, or 2-4°C higher, to improve the cleaning operation.

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Filtration and storage

It is good practice to let the oil settle before filtration as it is necessary to separate the oil from fine water droplets and particles in suspension. The settling process will also help release most of the air bubbles contained in the oil. This is called racking the oil. Settling tanks should be drained regularly to remove sediments and water. After one to a maximum of three days, the oil should be filtered. This is the best way to keep the aroma and increase the stability of the oil. Several studies show that an unfiltered oil has no long-term stability and, therefore, has a reduced shelf life. This is caused by still active enzyme activity, which firstly causes loss of aroma, and then damages the oil. Relatively often, only decantation is used to clear the oil but the best route is filtration a short time after processing. After filtration, an in-house sensory analysis should be carried out, as well as testing of free fatty acids and peroxide value to decide on the final destination of the oil in the tank storage facility. The best storage conditions involve the use of stainless steel tanks, nitrogen blanketing and temperature control in the storage room to minimise oxidation processes in the oil to maximise the shelf life of the product. The oil is best stored at temperatures ranging between 14-19°C.

Conclusions

Many factors influence the sensory quality of olive oil including: ▪ Harvesting and fruit transport method ▪ Fruit condition (including any pest infection from the olive fruit fly, dacus oleae) and diseases ▪ Crushing speed, sieve grid size, malaxation time and temperature ▪ Good Manufacturing Practices (GMP) ▪ Exposure to oxygen and light ▪ Filtration ▪ Cleanliness of tanks, piping and bottling machines ▪ Oil storage temperature

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The condition and treatment of olives and their production parameters are directly linked to oil quality. Factors influencing an olive oil’s character, aroma profile and style include: ▪ Irrigation practices, fertilisation, cutting of trees ▪ Climate/weather conditions ▪ Olive variety ▪ Fruit maturity related to time of harvesting ▪ Oil extraction or pressing system Any issue in the production and distribution chain of extra virgin olive oil can negatively impact oil quality. ● Christoph Sippel is the business development manager of sensory science at Eurofins Analytik GmbH, Germany www.ofimagazine.com

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06/03/2019 10:51 14/03/2019 11:35

OLEOCHEMICALS

Opportunities in India Malaysian palm oil could be a suitable feedstock for a wide range of oleochemical and surfactant products currently produced for India’s steadily expanding market Rajeev Churi

he Indian oleochemicals market is expected to reach 1.7M tonnes in volume terms, and the surfactants market US$6.15bn in value terms, by 2022, based on demand from key users. Palm oil will have opportunities to meet this demand, not only for conventional end uses, but newer applications as well. As regulatory requirements become stricter, sustainability, environmental protection and safety issues are of paramount importance. Emerging applications of oleochemicals will oﬀer exciting opportunities in India.

Vegetable oil scenario in India

The estimated turnover for the Indian vegetable oil and oilseed sector in 2016/17 was Rs1.9 trillion (US$25bn). Edible oil imports increased to 15.5M tonnes, making up 14.5 % of global imports. This means India imported 65% of its edible oil demand. This problem is compounded by the country’s low average oilseed productivity of 1.15 tonnes/ha. In 2016/17, India’s total oilseed production accounted for just 7.69% of global output. As such, India is responsible for 4.95% of global oilseed production and 10.35% of global demand. 24 OFI – MARCH/APRIL 2019

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India’s palm oil consumption stands at 7M tonnes, which is 14% of global consumption. About 17% of the palm oil used in India is imported from Malaysia.

Global oleochemicals market

Historically, about 12-14% of the world’s vegetable oil production has been used for oleochemicals. The global oleochemical market is estimated at about 18M tonnes comprising some 10.5M tonnes of fatty acids, 4.1M tonnes of fatty alcohols and 3.8M tonnes of glycerol. The Asia Paciﬁc region dominates the global oleochemicals market with a 68% market share. It also accounts for over 60% of global oleochemicals capacity and is expected to grow at a CAGR of 6.2% for the next few years. Europe is the second largest market for oleochemicals with a 18% share.

Indian oleochemicals sector

In 2016/17, the total estimated consumption of fatty acids in India stood at 0.9M tonnes, out of which about 0.7M tonnes was captive consumption mainly for soap making. Industry-wise, soap production made up 30% of total

fatty acid consumption, derivatives 18%, polymers 16%, rubber and coatings both 6% and personal care and foods both 2%, with the remaining 16% for other uses. The total installed capacity for fatty alcohols in India is 185,000 tonnes, while total consumption of fatty alcohols was 125,000 tonnes. The irony is that the total imports of fatty alcohols was about 75,000 tonnes, an eﬀect of the inverted export tax problem that the Indian oleochemical industry is struggling with. Middle chain alcohols make up 72% of total consumption, with the home and personal care industry consuming 66% of middle chain alcohols. The total estimated consumption of glycerol by Indian industry was 110,000 tonnes in 2016/17. The personal/oral care and coatings segments were the top consumers, with both taking up 27% of the total. Pharmaceuticals were at second place with 16%, followed by food at 9%, specialities at 6% and coolants at 4%. The remaining 11% went to other uses. The major Indian players in the oleochemicals sector include Godrej, VVF, Rayalseema, HLL, Jocil, Sunshine, Food Fats, Nirma, Galaxy and Rhodia. With oleochemicals-based products being more environmentally friendly due to their biodegradability aspects, less polluting and coming from a sustainable source, demand for them is rising. The introduction of regulations similar to REACH (EU Registration, u www.ofimagazine.com

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Figure 1: Surfactants production value in India by segment, 2010-2020 u Evaluation, Authorisation and Restriction

of Chemicals legislation) is also driving demand.

Surfactants industry in India

The global surfactants industry is quite complex as ‘surfactant’ is a broad base term. There are numerous applications, a large number of suppliers (estimated at over 1,000 worldwide) and a wide range of product chemistries – more than 3,500. Various industry segments use surfactants in one form or another. It is estimated that the current Indian surfactants market in terms of production is worth US$3.75bn. In 2015, the home care segment was the leading sector in the market, valued at some US$1.95bn. Industrial cleaners and ‘others’ was the second biggest segment, valued at US$590M, followed by the personal care segment at US$400M (see Figure 1, above). This structure is expected to remain until 2020, although the home care segment will grow further ahead of the other two, reaching US$3.38bn by 2020. The industrial cleaners and ‘other’ sector is forecast to grow to US$1.35bn, while the personal care segment will see more modest growth, reaching only US$690M. In value terms, the household cleaners segment is by far the largest user of surfactants in India, being responsible for 66% of total consumption. It is followed by the personal care and industrial cleaners segments, both taking up 12% of the total. Other uses consume 10% of India’s total surfactants demand.

Retail scenario

The Indian retail market is expected to grow from US$680bn to US$1.1 trillion by 2020. In the same time period, the fast-moving consumer goods (FMCG) market – including consumer packaged 26 OFI – MARCH/APRIL 2019

India.indd 4

goods like packaged foods, beverages and toiletries – is expected to grow from US$49bn to US$103bn. Indian rural markets are growing faster than urban ones. The projected growth of the rural market is from current US$29.4bn to US$220bn by 2025. According to Euromarket International data from May 2017, within the Indian personal care market, the bath and shower products are the leading segment at US$3.32bn. This is followed by hair care at US$3.06bn, oral care at US$1.79bn and men’s grooming at US$1.32bn. The beauty and personal care market is expected to grow from US$13.2bn in 2017 to US$14.73bn in 2021.

Surfactants from palm oil

Palm oil and – in particular – palm kernel oil (PKO) are essential feedstocks for the oleochemicals industry, which, in turn, provides critical raw materials like fatty acids and fatty alcohols for the production of surfactants globally. Various anionic, non-anionic and amphoteric surfactants are produced commercially and made available in India. These surfactants are used in consumer products, such as laundry detergents, shampoos, soaps and many other household, industrial, institutional and personal cleaning products. Palm oil-based glycerol esters, diethanolamides, alkyl polyglycosides and methyl ester sulphonates are widely used in surfactant formulations. It has been shown that palm oil-based methyl ester sulphonates, which are used in powder and liquid detergents, have: ▪ High detergency in low concentration ▪ High detergency in high water hardness ▪ High biodegradability ▪ Environmentally-friendly factors

Palm oil is ethoxylated to various ethylene oxide (EO) products, from which ingredients with different hydrophilelipophile balance (HLB) values are obtained. Depending on the degree of ethoxylation, water or oil soluble emulsifiers can be produced. These have numerous applications in textiles, paints, surface coatings, lubricants, agriculture oils, pesticides and others. Palm oilbased alkyl polyglycosides, used as green surfactants, have also made inroads in applications such as light-duty hand dishwashing. As safety, sustainability and responsive care become increasingly important, there are a number of emerging applications for palm oil and its derivatives. An ideal surfactant for personal care products should be: ▪ Mild to skin and hair ▪ Non-toxic to the user ▪ Biodegradable ▪ Made from renewable sources ▪ Consuming less resources like water and energy Amino acid surfactants from palm oil fatty acids can fulfil the above criteria. Palm oil fatty acids are converted into fatty acid chlorides. By reacting amino acids with a base, various N-acylamide amino acid surfactants can be produced. These surfactants can be, among others, glutamate, glycinate, taurate or sarcosinate and they can be used in combination with other mild surfactants in body washes, shampoos, bubble baths, face washes and body hygiene formulations. Alpha-sulphonated ethyl esters, synthesised from palm oil via the transesterification process, have been proven to be 25% more effective in enhanced oil recovery. Palm oil, when reacted with monoethanolamine, produces fatty acid monoethanolamine amides. When they are subjected to sulphating using sulphuric acid, the resulting product is a novel surfactant that has proven to be a very effective corrosion inhibitor for mild steel in CO2 environments. Malaysian palm oil has the appropriate chemical fatty acid structure to be a feedstock for a wide range of surfactants currently produced in India, as well as for exciting new emerging applications. ● This article is based on the presentation, ‘India’s Oleochemical and Surfactant Market – Opportunities for Malaysian Palm Oil’ by Dr Rajeev Churi, vice president of the Oil Technologists’ Association of India (OTAI), presented at the 2nd POINTERS Palm Oil Internet Seminar on 6-12 August 2018 www.ofimagazine.com

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CANNABIDIOL OIL

Meeting a high demand

In recent years, the cannabis plant has begun to shed some of the stigma that has traditionally haunted it. While cannabis still remains an illegal substance in most parts of the world for recreational use, legislation has begun to relax, especially in North America. Canada and US states such as California and Colorado have legalised the recreational use of cannabis, hoping that the now taxable drug can bring in some income for state authorities and lower the number of people arrested for minor infractions of drug laws. But even in places where recreational cannabis remains illegal, the medical opportunities of the plant are being explored. Several countries and states in both the Americas and Europe now allow the cultivation and use of cannabis for medical purposes. Beyond medical use, cannabis products are also finding their way into skincare products and health foods, with CocaCola even looking to introduce extracts into new “wellness drinks”.

Cannabis vs hemp vs marijuana

So what exactly is the difference between cannabis, hemp and marijuana? Cannabis is a family of plants with two primary classifications – Indica and Sativa. While marijuana can be considered a member of either classification, hemp is a member of the Sativa family (see Figure 1, following page). Cannabis contains a variety of different 28 OFI – MARCH/APRIL 2019

CBD.indd 2

Although cannabis is mostly associated with being a recreational drug, demand for cannabidiol (CBD) oil and products is growing for medical and skin care applications. What exactly is CBD and what is driving the increasing demand for it? lle Kauppila compounds called cannabinoids, the two most common ones being cannabidiol (CBD) and tetrahydrocannabinol (THC). THC induces psychoactive effects (a ‘high’) while CBD does not contain any psychoactive properties. Hemp contains a very low concentration of THC (0.3% or less) while marijuana has 15%-40% THC. Because of this, hemp is mainly grown for industrial purposes while marijuana is grown for recreational and medicinal purposes. However, with the fast-growing popularity of CBD, hemp is also used to produce a wide variety of THC-free CBD products. These differences explain the distinction between cannabis oil and CBD oil. Cannabis oil – sometimes called hash oil – is a general label for oleoresins (a mix of oils and resins) extracted from the flowers of the marijuana plant (making it cannabis oil) or all parts of the plant (making it hash oil) using a solvent, such as butane or ethanol. Demi Pradolin, community manager at Netherlands-based hemp product and CBD oil producer Endoca, explains to Oils & Fats International that the

cannabis oil produced through the above-described extraction process is a thick and molasses-like extract. The most important thing, however, is the high level of tetrahydrocannabinol (THC) in the final product. Although the levels of THC vary wildly between different products, Pradolin says cannabis oil generally has a THC content of anywhere between 4% and 35%. “CBD oil, on the other hand, does not contain high levels of THC and is therefore not psychotropic, nor does it produce a ‘high’.” The industrial hemp plant used in CBD production is a strain of Cannabis sativa that has been used for fibre production for more than 10,000 years. The actual THC content found in industrial hemp differs according to regional laws, with the allowable limit in Europe set at 0.2% and the USA at 0.3%. Despite a distinction in the chemical properties of the two oils, differing regulations between different regions keep muddying the waters. In the USA, for example, even low-THC products are sometimes labelled as “cannabis oil”, u www.ofimagazine.com

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Figure 1: The cannabis family – hemp compared with marijuana

Source: Endoca

companies joining the space every day, How isQueen the oil produced? and a quantity that is correct today will Royal Seeds. How much is produced globally? most likely be out of date by tomorrow.” In Europe such labelling practices are The oil can be produced in a wide variety of ways, from tincture form which requires the use of a solvent However, she says that there has been not allowed and, therefore, the low-THC like alcohol or vegetable glycerin to extract the vital plant molecules, to the industry gold standard of a huge increase in the demand for CBD product is called hemp oil. But, going C02 extractions which is what we do here at Endoca. products globally, and production is back to the other side of the Atlantic, constantly According to Pradolin, hemp oil and CBD oil are more or less This requires the plant material to be put into a chamber where the growing. temperature and pressure of the the which CBD ‘washes’ industrythe is plant poised to beand worth interchangeable terms, even though C02 is set and compressed, turning the C02an into a fine mist material extracts all “CBD the vitaloil” plant compounds. is released, plant material and extracted US$22bn bythe 2020. American product oftenOnce has the a pressure While global production numbers for higher CBD content than an American CBD oil are vague, the extraction methods “hemp oil” product. are easier to explain. “The oil can be It is no wonder that with such wildly produced in a wide variety of ways,” says fluctuating labelling practices, neither Pradolin, “from tincture form – which regulators, consumers or the industry are requires the use of a solvent-like alcohol quite clear on what exactly all the different or vegetable glycerin to extract the vital kinds of cannabis-derived oils are. And plant molecules – to the industry gold this is all without even mentioning the standard of CO2 extraction, which is what hemp seed oil used in cooking. As a general rule of thumb, however, Endoca uses.” the distinction suggested by Pradolin will In CO2 extraction, plant material is suffice in most situations: cannabis oil placed into a chamber. CO2 is pumped contains THC while CDB oil is virtually into the chamber, and its temperature and THC-free. pressure are set. The gas is compressed, which turns it into a fine mist that ‘washes’ the plant material and extracts Production and extraction the desired plant compounds. China is the leading industrial hemp “Once the pressure is released, the producer in the world, being responsible plant material and extracted compounds for some 70% of total world output. remain separated. This is what we refer to Far behind it, France is the second as our ‘first extract’ and it is then used to largest hemp producer, growing roughly formulate various CBD products.” 25% of global output. Together, these two countries dominate global hemp production with a nearly 95% share, Medical applications while 30 more countries produce globally One of the major applications where negligible amounts of hemp. cannabis and CBD oils are gaining traction However, when it comes to global is the field of medicine. Many medical CBD oil production, Pradolin says that benefits have been attributed to the oils, estimating outputs becomes increasingly particularly low-THC CBD oil, but the difficult. “The global amount of CBD or topic remains contentious. even cannabis oil itself is not something “Using CBD oil as medicine is a hotly I can give an answer to. There are new debated topic within both the cannabis

u according to Spanish cannabis seed firm

30 OFI – MARCH/APRIL 2019

CBD.indd 4

and medical industries,” says Pradolin. “Currently scientific research into the benefits of CBD is considered limited, but there are some promising studies and literature that support CBD as a therapeutic alternative to prescription medicine.” Endoca has carried out reviews of scientific literature surrounding the use of CBD in medicine. The studies suggest that CBD is effective in the areas of pain relief, neurological disorders and autoimmune disorders. In pain relief, CBD helps to stimulate the body’s endocannabinoid system to produce more of a pain-fighting cannabinoid called anandamide. This natural compound works to regulate pain and high levels of anandamide can reduce pain responses. This could be useful for patients suffering from, among others, arthritis pain, multiple sclerosis, migraines, joint and nerve pain. Medical marijuana is already prescribed as a pain medication in certain parts of the world, so it makes sense that CBD oil would also work in similar roles. On 25 June 2018, the US Food and Drug Administration (FDA) approved a medicine called Epidiolex for the treatment of seizures associated with two rare and severe forms of epilepsy, namely Lennox-Gastaut syndrome and Dravet syndrome. The effective substance in Epidiolex is CBD, and the drug does not contain THC, according to the FDA. Studies reviewed by Endoca showed that CBD could also help with other neurological conditions including schizophrenia, Alzheimer’s, Parkinson’s and strokes. In the area of autoimmune disorders, Endoca says CBD works as an antioxidant that can help fight inflammation by stimulating the body’s vanilloid pain receptors. This activity prevents the body from destroying the previously mentioned anandamide by inhibiting a process known as fatty acid amide hydrolase (FAAH). One medical condition where this property might prove beneficial is Crohn’s disease. An Isreaeli study – the first of its kind – found in October 2018 that a treatment with cannabis oil containing 15% CBD and 4% THC showed a significant reduction in the symptoms of Crohn’s disease. However, the same study said that despite cannabinoids’ “profound anti-inflammatory effects”, the researchers found that the medicine did not impact the gut inflammation associated with Crohn’s disease. In addition to these fields, Endoca says that CBD could help in regulating anxiety and panic attacks, combating addictions www.ofimagazine.com

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CANNABIDIOL OIL and treating hormonal and digestive issues. However, Pradolin calls for more research to be performed on CBD’s benefits. “There needs to be more support for double-blind, placebo-controlled studies looking at CBD and its benefits. Without this scientific research behind us, we will continue to see a stigma surrounding the use of CBD as a medicine,” says Pradolin.

Skincare use

Outside the medical field, cannabis and CBD oils have found popular use in the skincare products industry, with Hollywood stars and the public in the USA embracing the ‘cannabis craze’. In a presentation for the American Academy of Dermatology, Dr Jeanette Jacknin says the skin has an endocannabinoid system that helps regulate the production of various hormones and proteins with research suggesting that cannabinoid receptors in the skin can affect epidermal differentiation and skin development. Jacknin says several studies have shown that cannabinoids produce lipids that regulate acne and seborrhea. Due to their anti-inflammatory properties, CBD may also help in fighting eczema and atopic dermatitis. Jacknin notes that hemp oil’s “anti-inflammatory and moisturising properties make it wonderful for skin care”. It no surprise, then, that the cosmetics industry is one of the major end-users of cannabis oil products and that the CBD skincare boom is now looking to cross the Atlantic to the EU.

Hazy legal status

However, the big obstacle standing in the way of cannabis and CBD products is that they are extracts of a plant best known for illicit drugs. That means that they will inevitably run into two majors hurdles – regulations and public perception. Despite recent legalisation and decriminalisation decisions, marijuana remains an illegal substance in most parts of the world for recreational use. With medical marijuana, the regulatory situation is slightly more lenient, with a good number of countries having some kind of prescription system in effect. However, cannabis and CBD oils keep running afoul of cannabis laws, sometimes even in cases where their end uses are purely industrial. As mentioned earlier, the legal limit for THC content in industrial hemp – from which CBD products are manufactured – is 0.2% in Europe and 0.3% in the USA. According to the Hemp Business Journal, the 2018 US Farm Bill effectively legalised hemp production in the USA but, in www.ofimagazine.com

CBD.indd 5

‘The global market value for CBD hemp oil alone will reach US$1.11bn by the end of 2025 with the entire cannabis market poised to grow to US$22bn by 2020’ January 2019, four men were arrested in Oklahoma on suspicion of drug trafficking after law enforcement officials discovered they were transporting nearly eight tonnes of industrial hemp, worth some US$850,000. Police tests discovered undisclosed levels of THC in the hemp batch, which led to the arrests. The shipment was intended for Panacea Life Sciences, a hemp and wellness company specialising in hemp-based therapeutics. “This is such a grey area,” Panacea Life Sciences president Jamie Baumgartner told Hemp Business Journal. “We’re trying to work to clarify the situation that this was industrial hemp. We also hope that this is going to be a test case so that there is better clarification in the future for the transportation of what is an important agricultural product.” One of the issues in the USA is the cannabis field test kit provided to local police officers simply detects the presence of THC and not whether its levels surpass the legal federal limit. In the EU, the situation is similarly muddled. The bloc’s own CBD legislation is patchy and regulations vary wildly between member states. Germany and Finland, for example, allow medicinal use and cultivation of cannabis while, for instance, Sweden bans it altogether. However, these restrictions often apply only to smoked cannabis products. Whether they concern cannabis and CBD oils is questionable, although CBD/ hemp oil produced through cold pressing can currently be sold in the EU without authorisation (within legal THC limits). However, CBD oil produced through certain extraction and purification techniques – such as the CO2 method – is classified as a novel food product.

To be able to sell CBD products in the EU, the seller must apply for novel food authorisation from the EU. Apart from the legal question, there is also the matter of public perception. For a long time, cannabis has been presented to the public as a drug and parts of the population continue to regard it as such. In recent years, though, attitudes have begun to change and the demand for hemp and CBD products is skyrocketing. Market research firm QY Research, in a February 2019 study, forecasts that the global market value for CBD hemp oil alone will reach US$1.11bn by the end of 2025 with the entire cannabis market poised to grow to US$22bn by 2020. It sees the cosmetics industry, alongside pharmaceuticals and food, to be the market drivers for CBD hemp oil through 2025. “Technological advancements – such as the rising usage of CBD hemp oil in the form of tincture, spray and vape – is expected to boost demand in the coming years. Rising concerns for various neurological disorders, an increasing number of chronic diseases such as diabetes, and growing awareness of depression and stress among youngsters have led to increasing usage of CBD hemp oil in the healthcare sector. CBD hemp oil also helps in the treatment of skin problems such as acne.” Pradolin also agrees that the future might hold great promise for cannabis and CBD oil. According to her, more and more people across the globe have come to recognise the therapeutic benefits of CBD and cannabis and it is beginning to become more commonplace. However, she says the explosion in demand has led to huge levels of production with many companies doing so without the attention to detail or understanding, so regulation and education “are still incredibly important”. Pradolin says that she can see regulation going one of two ways. “The first, which is what we are hoping for, is that CBD becomes commonplace in all homes. Whether that be in a trendy food product, or in someone’s medicine cabinet, I think there is space for both and different companies will fill different purposes in the industry. Nonetheless, we do know it’s possible for legislation to go the other direction and for CBD to be a highly regulated and controlled medicine.” For the time being, the cannabis industry is riding a high of great demand and a promising future. Whether that high turns out to be reality or just a pipe dream depends on the regulators. ● Ile Kauppila is OFI’s former assistant editor OFI – MARCH/APRIL 2019

14/03/2019 11:52

NEWS PLANT & TECHNOLOGY

Global round-up of projects Oils & Fats International reports on some of the latest projects, technology and process news and developments around the world

IN BRIEF USA: US soyabean processor Quality Roasting LLC was awarded a US$80,000 Michigan Business Development Program performance-based grant on 15 February to fund the construction of a new soyabean processing plant in Reese, Michigan. World Grain said that the joint venture, established last year by Quality Roasting Inc and DeLong Co, planned to follow a similar business model to Quality Roasting Inc, heating and pressing soyabeans to produce crude oil, and meal primarily for the dairy industry. Quality Roasting said that it expected to use around 2.2M bushels of soyabeans, or about 2% of Michigan’s state-wide annual soyabean yield.

Clariant in biomass-to-biodiesel deal with REG and ExxonMobil Swiss speciality chemicals firm Clariant announced on 23 January that it had signed a joint research agreement with ExxonMobil and Renewable Energy Group (REG) to evaluate the potential use of cellulosic sugars from sources such as agricultural waste, including corn stover and wheat straw, to produce biofuel. The new partnership expands a previously announced agreement for joint research between ExxonMobil and REG to test REG Life Sciences’ bio-conversion technology to convert sugars from cellulosic biomass into biodiesel through a single-step process. “The new agreement with Clariant allows ExxonMobil and REG to further optimise REG’s bio-conversion process using cellulosic sugars created through Clariant’s sunliquid process,” the companies said in a press release. “The companies’ ultimate objective is to combine Clariant’s and REG’s processes into a seamless cellulosic biomass-to-biodiesel technology.” “Over the past three years, our work with

REG has led to important advances in genetically improving REG’s proprietary microbes for a beneficial use in facilitating the conversion of cellulosic sugars into biodiesel,” said Vijay Swarup, vice president of research and development at ExxonMobil Research and Engineering Company. “Applying Clariant’s expertise will help us better understand and advance a key stage in the overall cellulosic conversion process, and hopefully lead to the development of scalable biodiesel technology.” Clariant will conduct trials at its pre-commercial plant in Straubing, Germany using different types of cellulosic feedstock that will be converted into sugars for conversion by REG and ExxonMobil into biodiesel. In September, Clariant began construction of its first large-scale commercial sunliquid plant in Podari, near Craiova, in southwestern Romania. At full capacity, the plant will process around 250,000 tonnes of wheat and other cereal straw into 50,000 tonnes/year of cellulosic ethanol.

www.sepiolsa.com Ph: +34 949 010 000 bleachingearth@sepiolsa.com

2 OFI 32 OFI––MONTH MARCH/APRIL 2018 2019

March P&E NEW.indd 2

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14/03/2019 12:04

PLANT & TECHNOLOGY

www.dsengineers.com

OLVEA develops refinery for vegetable and fish oils

French supplier of vegetable and fish oils OLVEA has developed a refining plant directly on its site in Fecamp, Normandy (pictured above). “Thanks to our supply chains located in Africa, closest to the raw material, and our own refinery, OLVEA is now able to offer customers bio-sourced and eco-refined vegetable and fish oils with complete traceability. These oils, prized by cosmetic, pharmaceutical and food laboratories, are used in the composition of many finished products,” OLVEA said. Equipped with two refining lines with a daily capacity of 100 tonnes, the plant was one of the first eco-designed refineries in Europe, OLVEA said. The building of an old factory

had been completely rehabilitated and the demolition materials were recycled and re-used. The plant has 1,300m2 of photovoltaic panels installed on the roof, which covers 50% of the needs of a refining line. The remaining energy supply is purchased from green sources of gas and electricity. The plant is also equipped with heat exchangers to recover and interchange heat energy at different stages of the process. OLVEA has also installed three rainwater storage tanks, with a storage capacity of 1M litres, to recover up to 12M litres/year. “The equipment and the process of this plant make it possible to purify oils while guaranteeing the absence of cross-contamination.” There are 93 tanks and 10,000 tonnes of storage on site, as well as a refining capacity of more than 30,000 tonnes/year. The OLVEA Group is a leading supplier of vegetable and fish oils for the cosmetic, pharmaceutical, food and feed industries. It has 12 worldwide, with a turnover of more than €100M (US$113M).

Eni castor-for-biofuel project

Italian gas and oil company Eni has launched a biofuel pilot project in Gafsa city, Tunisia, to grow castor oil plants and use the oil as a biofuel feedstock The project would cultivate the castor oil plants in semi-arid areas and the oil extracted from the plant’s fruit would be used to fuel Eni’s biorefineries, ANSAmed reported in January. Experimentation began on a 140ha plot of land and the yield per tonne of castor fruit would be evaluated to define an extended cultivation plan, Eni said. The project was launched to find an alternative raw material to palm oil. Eni has been present in Tunisia since 1961, managing upstream petroleum operations.

Cargill to expand soya processing unit

The Cedar Rapids City Council has preliminarily approved a US$37.62M expansion at Cargill’s Cedar Rapids east soyabean processing plant, The Gazette reported in January. Cargill planned to spend approximately US$31.5M to install and upgrade machinery and equipment, design and engineering. The remaining US$6.12M was earmarked for construction and site preparation. u www.ofimagazine.com

March P&E NEW.indd 3

OFI – MARCH/APRIL 2019 33

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IN BRIEF USA: US agricultural processor Epitome Energy LLC has chosen Crookston, Minnesota as its location for a new US$130M plant for soyabean extraction and biodiesel production, reported the Crookston Times on 11 January. Plans for the Crookston site include a 21M bushel soya extraction unit, a 30M gallon biodiesel production facility, and a mechanical extraction plant to produce speciality soyabean products such as refined oils. The company’s decision to open the plant in Crookston was linked to a mandate that recently went into effect in the state of Minnesota requiring No. 2 diesel fuel to contain 20% biodiesel, the Crookston Times said. Epitome Energy’s facility would help to increase the availability of biodiesel in the state. CANADA: US alternative energy firm Benefuel has secured a site in Ontario to build a new 75M litres/year biodiesel plant. “Benefuel has begun engineering at the Sarnia facility and has secured the land for the project,” CEO Rob Tripp said. The company has commercialised its solid catalyst biorefining platform to produce biodiesel and bio-lubricants from waste feedstocks, such as used cooking oil and byproducts from ethanol refining. Its technology has been licensed to Flint Hills Resources, which operates a 50M gallons/year refinery in Beatrice, Nebraska for more than two years. “We are looking to leverage this success in the key low carbon markets – Canada, the USA and the EU.” In December, Benefuel also announced that it was searching for a site to build a 150M litres/year plant in British Columbia. 34 OFI – MARCH/APRIL 2019

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CEPT technology can increase olive oil yield Swedish cleantech company Arcaroma has developed an olive oil processing unit which it says increases olive oil yield by 5-15% by extracting more oil out of olive paste. Arcaroma’s CEPT technology is based on Pulsed Electric Field (PEF) or non-thermal short-term high voltage pulses. “The technology is extremely energy efficient, processing cells by creating pores or blast cell membranes and other structures, killing undesirable microorganisms or releasing encapsulated nutrition,” the company said. Designed for biological purification and hygiene of pumpable products, the CEPT technology has been applied to olive oil. “The traditional extraction process will not get all the oil out of the olive paste,” said Arcaroma CEO Johan Möllerström. “We are increasing the efficiency of the process.” Ten oliveCEPT units are currently installed at plants in Spain, Morocco, Italy and Greece, and Aracoma is now ready to roll out its technology worldwide. “The oliveCEPT technology runs day and night during harvest and is inserted between the malaxing and extraction steps,” it said. “Olive paste, from the malaxer, enters one side of the oliveCEPT, which breaks down the cell walls of the olive flesh, releasing more oil that then flows into the extractor.” The technology’s impact on yield has been validated by Professor Maurizio Servili of the University of Perugia, who wrote: “The impact of the PEF technology applied to the olive oil mechanical extraction process showed a significant impact on EVOO (Extra Virgin Olive Oil) yield for the test conducted on olives using the extraction plant at the University of Perugia. The yield increase was determined to at least 5% compared to the reference extraction where the PEF technology had not been applied.” In Vallo Della Lucania, Italy, olive oil

producer Frantoio Conti has installed an oliveCEPT, with quality manager Emilio Conti highlighting the increased quantity and quality of his yield including the flavour profile, polyphenol content and aesthetics. “The yield of our olive oil increased by 4-6%. A better quality of our oil is extracted, as it increases the colour of the oil, so if we have a green it’s a more intense green, if we have a yellow it’s a more intense yellow”. “As for the fruitiness, it increases by about one point. We also have a significant increase in health beneficial polyphenols of between 100 and 150 ppm.” Arcaroma said another important parameter that defined olive oil quality was acidity, which should be kept in balance. It said no changes of acidity were found using oliveCEPT. The CEPT technology is based on 20 years of research into PEF technology by Arcaroma founder Pär Henriksson. Several patents held by the company have resulted in a growing number of business areas and products, including juice and wine production in the food and beverage industry.

Molinos buys stake in Patagonia Bioenergia Argentine soyabean crusher and processor Molinos Agro has acquired a 33% stake in biodiesel producer Patagonia Bioenergia for an undisclosed sum, S&P Global Platts reported in January. The purchase expanded Molinos’ biodiesel interests in the city of San Lorenzo, Santa Fe, granting it access to nearby soyabean fields and the Paraná

River for transport. Patagonia Bioenergia operated a biodiesel plant in San Lorenzo, with 250,000 tonnes/ year of capacity, which Molinos was planning to expand, S&P Global Platts quoted market sources as saying. Argentina’s biodiesel industry market had been through a rough year with an increase in US import duties cutting sales,

and a contracting economy lowering demand for diesel, the market analysis firm said. Molinos was formed in 1902 as a unit of Bunge Ltd and was sold to the Perez Companc group in 1999. Its main crushing facility is located in San Lorenzo, with a nominal crushing capacity of 20,000 tonnes/day of soya, according to Reuters. www.ofimagazine.com

14/03/2019 12:04

DIARY OF EVENTS 8-30 April 2019 Globoil International JW Marriott Marquis Dubai, UAE www.teﬂas.com 5-8 May 2019 110th AOCS Annual Meeting & Expo America’s Center Convention Complex, St Louis, USA www.annualmeeting.aocs.org 14-17 May 2019 The 9th ICIS World Surfactants Conference Hyatt Regency Jersey City, USA www.icisevents. com/ehome/index. php?eventid=200178918 21-22 May 2019 MCPD Esters and Glycidyl Esters – Symposium 2019 Hotel Seminaris, Berlin Germany www.dgfett.de/meetings/ aktuell/berlin2019mcpd 5-6 June 2019 Oleofuels 2019 NH Venezia Laguna Palace Venice, Italy www.wplgroup.com/aci/ event/oleofuels 11-12 June 2019 IGC Grains Conference 2019 Congress Centre London, UK https://www.igc.int/en/ conference/registration/ regform.aspx 12-15 June 2019

DGF events for oils and fats industry The German Society for Fat Science (DGF) is organising three symposiums focused on production, 3-MCPDs and GEs, and plant lipids. 6th Leipzig Symposium 19 March - 20 March 2019 Leipzig, Germany http://www.dgfett.de/meetings/aktuell/ leipzig2019 2nd MCPD Esters & Glycidyl Esters Symposium 2019 21 May - 22 May 2019 Seminaris Campus Hotel, Berlin, Germany http://www.dgfett.de/meetings/aktuell/ berlin2019mcpd 9th European Symposium on Plant Lipids 7 July - 10 July 2019 World Trade Centre, Marseille, France http://www.dgfett.de/meetings/aktuell/ marseille2019

28 October-1 November 2019

19-21 November 2019

FOSFA Advanced Course Egham, Surrey, UK www.fosfa.org

86th NRA Annual Convention Park Hyatt Aviara Carlsbad, USA www.nationalrenderers.org/ events/convention/

International Palm Oil Congress & Exhibition 2019 Kuala Lumpur, Malaysia http://pipoc.mpob.gov.my

8-13 September 2019 FOSFA Basic Introductory Course Egham, Surrey, UK www.fosfa.org 25-27 September 2019 Globoil India Mumbai, India www.teﬂas.com

18th AOCS Latin American Congress and Exhibition on Fats, Oils and Lipids Foz do Iguacu, Brazil www.meetings@aocs.org 20-23 October 2019

16-19 June 2019

9-10 November 2019

15 International Rapeseed Congress bcc Berlin Congress Center Germany www.irc2019-berlin.com

2nd AOCS China Section Guangzhou, China www.aocs.org/networkand-connect/membership/ sections#china-section

Diary NEW.indd 1

TOGETHER WE ARE MAKING THE WORLD SAFER, HEALTHIER & MORE PRODUCTIVE

5-11 October 2019

17th Euro Fed Lipid Congress Seville, Spain www.eurofedlipid.org/ meetings/seville2019

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For all events, contact: DGF, Germany Telephone: +49 69 7917-529 Email: info@dgfett.de

23-28 June 2019

EFPRA Congress 2019 Atlantia Congress Centre La Baule, France www.efpralabaule2019.com/ en

The 6th Leipzig Symposium is focused on the latest trends in technology, operation and plant management. The aim of the 2nd MCPD Esters and GE Symposium is to give an update on the status and knowledge of all aspects of MCPD esters and glycidyl esters in oils and food. More than 10 years after the first findings of 3-MCPD esters in vegetable fats and oils, qualified experts will discuss relevant aspects of formation and mitigation during oil and food processing, new developments in analytics and the toxicological assessment of the esters and approaches taken for their regulation. The European Symposium on Plant Lipids will showcase the role of lipids in plant/ algal development, physiology and biotech applications.

Learn more at www.filtration.group/ofi

OFI – MARCH/APRIL

20/03/2019 13:11

STATISTICS STATISTICAL NEWS FROM MINTEC Olive oil

Global olive oil production for the 2018/19 season is expected to fall, down 6% y-o-y. Consumption is also forecast to fall 2% y-o-y, to 2.9M tonnes, 6% below production. The EU remains the largest producer, with production forecast to rise 2% y-o-y in 2018/19, with production in Spain up 27%. However, other parts of Europe continue to struggle with disease, and countries such as Italy (down 38%) and Greece (down 35%) are suﬀering large losses. Prices for Italian virgin olive oil are up 40% y-o-y overall. Ideal growing conditions for Spanish olives have led to a boost in production, causing Spanish extra virgin olive oil prices to fall, down 23% y-o-y. Despite the high demand, prices are down 9% since the start of the year.

Extra virgin olive oil prices (€/kg)

Sunﬂower oil

Sunﬂower oil has remained relatively stable since the start of 2019. Global production remains up 7% y-o-y, with high production seen in Russia and Ukraine, up 15% and 6% respectively. Output in Argentina is also up y-o-y by 8%. Global exports are also seeing an increase, however only slightly at 2%.

Soyabean and soyabean oil

Soyabean CBOT prices are down 4% from the start of the year. However, prices for soyabean oil are 3% up. Global soyabean production is up 6% y-o-y. Brazil’s production fell, down 3% y-o-y, following severe droughts seeing the harvest being brought forward with a lower yield. However, Argentina has seen ideal conditions, boosting its harvest, which is now forecast 46% up y-o-y for 2018/19 after a particularly low 2017/18 season. Global production for soyabean oil is projected up 3% y-o-y and ending stocks are also expected to increase 5% in 2018/19. The US-China trade war continues to weigh heavily on the soyabean market, with China shifting demand to alternative vegetable oils.

Soyabean oil prices (US$/tonne) Sunﬂower oil fob NW Eur (L)(DH-3)

Sunﬂower oil prices (US$/tonne)

Prices of selected oils (US$/tonne) 2017

Nov 18

Dec 18

Jan 19

Feb 19

Mar 19

Soyabean

829.0

722.1

707.7

718.8

736.8

734.7

Crude palm

690.0

522.8

526.5

585.5

588.4

556.9

Palm olein Coconut Rapeseed Sunﬂower

661.0

555.5

533.5

576.4

581.5

563.1

1,537.0

780.6

824.0

814.5

747.8

766.3

855.0

830.3

810.8

826.7

810.5

793.4

800.0

670.8

679.5

694.2

707.5

704.4

1,250.0

718.2

752.9

799.6

740.8

715.0

Average

946.0

686.0

691.0

717.0

702.0

691.0

Index

224.0

162.0

164.0

170.0

166.0

164.0

Palm kernel

36 OFI – MARCH/APRIL 2019

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Mintec works in partnership with sales, purchasing and supply chain professionals to deliver valuable insight into worldwide commodity and raw materials markets using innovative technology and a knowledgeable team of specialists. We provide independent insight and trusted data to help the world's most prestigious brands to make informed commercial decisions. Tel: +44 (0)1628 851313 Email: sales@mintecglobal.com Web: www.mintecglobal.com

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20/03/2019 12:57

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