EDITOR'S COMMENT
OILS & FATS INTERNATIONAL
VOL 36 NO 4 MAY 2020
EDITORIAL: Editor: Serena Lim serenalim@quartzltd.com +44 (0)1737 855066 Assistant Editor: Gill Langham gilllangham@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 PRODUCTION: Production Editor: Carol Baird carolbaird@quartzltd.com CORPORATE: Managing Director: Tony Crinion tonycrinion@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 © 2020, 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
Global effect As we went to press in mid-May, with global COVID-19 cases hitting more than 3M and deaths over 200,000, it is clear that the ongoing pandemic has touched every aspect of the oils and fats market, with no sign of a quick recovery. Having enough healthy employees to keep facilities operational and products moving has been one key concern. However, logistics are also expected to be impacted, with safety and quarantine procedures likely to affect the global shipping of oilseeds, oils and food commodities (see page 12). As drivers stay off the roads due to lockdowns and movement restrictions, petrol and diesel demand and prices have crashed, with blended ethanol and biodiesel following suit. Roughly half the US ethanol industry, for example, is now shut (see page 10). While some production has shifted to meet the alcohol demand for disinfectants and hand sanitisers, the shift does not compensate for the drop in fuel ethanol demand. Meanwhile, restaurants and hotels remain closed, impacting demand for vegetable oils. The market has seen palm oil demand from the hotel, restaurant and catering sector in India – the world’s largest edible oil consumer – falling by as much as 40% (see p6), while seasonal Ramadan demand for the world’s top traded vegetable oil has also slumped. International cooperation is needed to ensure that COVID-19 is contained and the supply and trade of food commodities continues to flow. However, the danger is that protectionism will kick in instead. Some countries have already banned exports of food commodities, including edible oils and oilseeds, to protect domestic supplies (see p4). At a 21 April virtual meeting, G20 agriculture and food ministers said worldwide food supplies were adequate and vowed not to allow current emergency measures wreak havoc on the global supply chain. Any emergency measures should be “targeted, proportionate, transparent and temporary,” the G20 said, adding that any actions should not create unnecessary trade barriers or disrupt global food supply chains. The emergency measures also should be consistent with World Trade Organization (WTO) rules, the G20 said. While the reported number of COVID-19 cases and deaths have been highest so far in the world’s most developed countries, a bigger threat looms in developing nations with weaker health systems which are highly dependent on imports, notably Africa, where the worst locust outbreak in decades has already ravaged food crops. “We must ensure that our response to COVID-19 does not unintentionally create unwarranted shortages of essential items and exacerbate hunger and malnutrition,” the United Nations, World Health Organization and WTO said in a joint statement on 1 April. COVID-19 has shown us how interconnected our world is today. Economists are predicting that the impact of the measures taken to contain the virus will lead to the worst global downturn since at least the Great Depression of the 1930s. Millions may end up in economic hardship or poverty. “It is at times like these that more, not less, international cooperation is essential,” the three global organisations said.
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Oils & Fats International
2 OFI – MAY 2020
Comment.indd 1
Serena Lim serenalim@quartzltd.com www.ofimagazine.com
04/05/2020 09:26:50
