OFI July/August 2017

July/August 2017 Vol 33 No 6 www.oilsandfatsinternational.com

OILSEEDS

Canola – a key to greatness

RENEWABLES

Synthesised squalene saving sharks Cover JulyAug 17.indd 1

13/07/2017 15:38

We team up with the most demanding Oils & Fats processors in the world COMPLETE PREPARATION PLANTS Innovative proprietary Technologies based on the experience of • 220+ Preparation Plants • 3,000+ Rosedowns Presses

COMPLETE EXTRACTION PLANTS Reliable and unmatched Technologies based on the experience of • 900+ Extractors • 900+ Desolventiser Toasters (Dryer Coolers) • 700+ Distillations & Solvent Recovery Sections

COMPLETE REFINING PLANTS State-of-the-Art refining Technologies based on the experience of • 700+ Oil pretreatment Processes • 900+ Bleaching Processes • 1,400 + Deodorizing Processes

COMPLETE FAT MODIFICATION PLANTS High performance Technologies based on the experience of : • 100+ Full Hydrogenation Processes • 80+ Interesterification Processes • 400+ Fractionation Processes

Desmet Ba ll delivered th estra designed and e largest ex tr in the worl d, operatin action plant g at 20,000 with unmatc hed efficien TPD cy.

Science behind Technology

THE B USI NE SS MAG AZ IN E FOR TH E OILS AN D FATS IN D UST RY

PHOTO: ADOBE STOCK

CONTENTS VOL. 33 NO. 6 JULY/AUGUST 2017 EDITORIAL: Editor: Serena Lim Tel: +44 (0)1737 855066 E-mail: serenalim@quartzltd.com

FEATURES

Assistant Editor: Ilari Kauppila Tel: +44 (0)1737 855157 E-mail: ikauppila@quartzltd.com

OILSEEDS

SALES: Sales Manager: Mark Winthrop-Wallace Tel: +44 (0)1737 855 114 E-mail: markww@quartzltd.com Sales Consultant: Anita Revis Tel: +44 (0)1737 855068 E-mail: anitarevis@quartzltd.com

18

Canola – a key to greatness

22

Consider the consequences

PRODUCTION: Production Editor: Carol Baird E-mail: carolbaird@quartzltd.com

HIGH LOCAL DEMAND COULD BE THE INSTIGATOR OF A NEW GOLDEN AGE FOR THE SOUTH AFRICAN CANOLA INDUSTRY. P18

MARGARINE & BUTTER

CORPORATE:

NEWS & EVENTS

The battle of the spreads

2 PHOTO: ADOBE STOCK

24

Managing Director: Steve Diprose Tel: +44 (0)1737 855164 E-mail: stevediprose@quartzltd.com SUBSCRIPTIONS: Elizabeth Barford Tel: +44 (0)1737 855028 E-mail: subscriptions@quartzltd.com Address: Subscriptions, Quartz House, 20 Clarendon Road, Redhill, Surrey, RH1 1QX, UK Annual Subscription: UK £149, Overseas £173.

Two years: UK £268, Overseas £311. Single copy £37 © 2017 Quartz Business Media ISSN 0267-8853

What’s in a name?

2

6

8

10

Transport & Logistics News

Nibulon to improve grain transportation 12

Renewable Material News

L’Oreal sells The Body Shop to Brazil’s Natura Cosméticos

Printed by Pensord Press, Gwent, Wales

Oils & Fats International

Biotech News

China approves GM soya and corn imports

Synthesised squalene saving sharks PHOTO: ADOBE STOCK

29

Published by Quartz Business Media Ltd Quartz House, 20 Clarendon Road Redhill, Surrey RH1 1QX, UK Tel: +44 (0)1737 855000 Fax: +44 (0)1737 855034 E-mail: oilsandfats@quartzltd.com

@oilsandfatsint

Biofuels News

EPA releases 2018 biofuel volumes proposal RENEWABLE MATERIALS

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

News

Norway prohibits state purchase of palm biodiesel

Website: www.oilsandfatsinternational.com

A member of FOSFA

Comment

14

Diary of Events

SHOW REVIEW

16

International Market Review

32

36

Statistics

OFI India 2017 report

1 OFI – JULY/AUGUST 2017 www.oilsandfatsinternational.com

Contents.indd 1

14/07/2017 11:37

NEWS

COMMENT

What’s in a name?

C

an almond milk really be called ‘milk’ or tofu butter ‘butter’ when they have no dairy content?

The answer is a resounding ‘no’, at least in Europe, according to a EU Court of Justice ruling on 14 June, which said dairy descriptions such as milk, cream, butter, cheese or yoghurt are reserved for animal products only (see news story, opposite page).

The verdict is “a good day for dairy”, European Dairy Association secretary general Alexander Anton says.

“The unique and natural blend of micro- and macronutrients of milk and dairy products cannot be matched by any plant-based products.”

The European Vegetarian Union, however, believes the court’s interpretation contradicts consumer perception and everyday language, according to a Dairy Reporter article.

For the butter industry, the ruling is good news as it makes its steady comeback against margarine and spreads, due to its ‘natural’ image and absence of artificial trans fats.

Unilever, for example, added butter to its Rama spread brand in Germany back in 2014 after criticising butter in the past. In contrast, the consumer goods giant unveiled plans in April to sell its spreads unit, saying the future of the spreads business “now lies outside the group”.

For the milk market, the picture is somewhat different, with milk alternatives – particularly almond – seeing strong sales growth against the contraction of dairy milk, according to Nielsen research.

So what are European producers of plant-based products to do?

The European Vegan Society (EVS) says the court verdict has little to do with consumer protection, according to Dairy Reporter.

“How likely is it that someone buys a carton of soya milk and think it’s dairy milk,” EVS spokes woman Dominika Piasecka was quoted as saying. “There’s no denying that the meat, dairy and egg industries are feeling threatened, and this court case is a desperate move to try to restrict the marketing of vegan products.”

USA to follow?

The decision in Europe could spread to the USA as well.

“The European Court of Justice did just what we’re asking the US Food and Drug Administration (FDA) to do: Uphold and enforce current standards of labelling for milk and milk products,” says Jim Mulhern, president of the US National Milk Producers Federation (NMPF).

“I hope those in decision-making positions in the USA can follow the lead of their counterparts in Europe. None of the fake milk products provides the same high-quality nutrition package as real milk.”

But the US Department of Agriculture (USDA) and FDA can’t even agree between themselves what to call soya ‘milk’, according to an Associated Press report.

The FDA says the federal definition of milk is a “lacteal secretion” from cows and suggests using ‘beverage’ or ‘fortified beverage’ for soya, almond and rice drinks. However, the USDA wants to use plain language in its public material, according to the Associated Press report.

Setting aside the nutritional argument of dairy versus plant, which is another thorny subject altogether, it is hard to imagine the public not using everyday terms for alternatives to milk and cheese, whatever a court or agency rules. Shoppers don’t add cartons of ‘lacteal secretion’ to their baskets, and they are not going to write ‘fortified soya beverage’ on their shopping list.

The issue is another aspect to the continuing war between butter and spreads (see ‘The battle of the spreads’, p24). w

Norway prohibits state purchase of palm biodiesel

N

orway’s parliament has banned government purchasing and use of palm oil-based biodiesel as a study by a Norwegian NGO claimed that the product is up to three times worse for the climate as fossil diesel.

The decision by the parliament on 13 June called on Norway’s government to “impose requirements through regulations to the Public Procurement Act that biofuel based on palm oil or byproducts of palm oil shall not be used”, according to the Rainforest Foundation Norway (RFN).

The resolution further stated that the regulatory amendment should come into effect as soon as possible and it instructed the government to advocate the fuel industry to abandon palm oil biofuels.

“Norway’s decision is an important step towards removing environmentally-damaging goods from the market. It also demonstrates the need for a serious reform of the world’s palm oil industry,” said RFN’s head of the policy campaign department Nils Hermann Ranum.

“It is now incumbent on other consumer countries to follow suit. In particular, the EU should take urgent steps to reduce the consumption of commodities, such as palm oil biodiesel, that are linked to rainforest destruction and accompanying greenhouse

gas emissions, biodiversity loss and human rights violations.”

Ranum added that “to the best of his knowledge”, Norway was the first country in the world to ban all use of palm oil biofuel by public entities.

Public procurement is the process in which governments use public funds to acquire services and goods from companies.

In June 2016, Norway passed a resolution to make the government’s public procurement policy deforestation-free to ensure the state would not contribute to rainforest destruction.

The latest decision came on the same day that RFN published its report, ‘For Peat’s Sake’, which argues that because of indirect land use change (ILUC), palm oil biodiesel is worse for the climate than the fossil fuel it replaces.

The paper said that tropical peatland forests acted as carbon stores and sinks, with Malaysian and Indonesian peatlands holding an approximate 70 gigatonnes of carbon and binding a further 25M tonnes of carbon annually.

Based on figures from the European Commission, the CO2 released from these massive stores as a result of conversion to oil palm plantations caused the resulting biofuel to have a total carbon footprint nearly three times higher than fossil diesel, the study said.

Cargill palm oil scheme in Colombia

G

lobal agribusiness Cargill, together with the international NGO Solidaridad and Colombian trading company CI Biocosta SA, launched a new palm oil smallholder sustainability programme in Colombia on 7 June.

The two-year project – Cargill’s first sustainable palm oil initiative in Latin America – aimed to improve agricultural practices and farmer livelihoods by providing direct training and support on good agricultural practices and improved farm management techniques to more than 480 farmers in northwestern Colombia, Cargill said. The programme would promote the adoption of the Roundtable on Sustainable Palm Oil (RSPO)’s principles and criteria.

Palm oil is Colombia’s third largest cultivated crop, after coffee and bananas. Biocosta, which forms Cargill’s supplier base for producers and mills, is one of the country’s largest palm oil exporters, overseeing more than 700 farmers who account for nearly 50% of palm oil production in the country’s northern regions.

2 OFI – JULY/AUGUST 2017 www.ofimagazine.com

Comment and News.indd 1

20/07/2017 12:38

NEWS

Agrokor’s debt could cut olive oil production in Croatia

A

grokor, a Croatian food and retail concern, is planning to close up to 100 of its Konzum grocery stores, which could affect regional olive oil prices and cut its olive oil production.

The retail giant, whose revenue represented 15% of Croatia’s GDP, was struggling with nearly US$6bn of debt, wrote the Olive Oil Times on 5 July.

Agrokor owned the Ol Istria and K Plus olive oil brands and was a major buyer and seller of olive oil, sourcing its oil from both Croatia and the EU. The company owned at least 65,000 olive

trees on the Istrian Peninsula and produced 130 tonnes/year of extra virgin olive oil through its Agrolaguna subsidiary, according to the Olive Oil Times report.

Croatia produces less than 6,000 tonnes/ year of olive oil, based on International Olive Oil Council data, but disruption in any of the former Yugoslavian countries could impact the global market, which already suffered failed harvests in 2016.

Now some of Agrokor’s suppliers had begun to demand early payment or to withhold product deliveries until compensated due to

concerns over the company’s ability to meet its liabilities.

Olive Oil Times said the Croatian government had appointed a crisis manager to ensure Agrokor repaid its debts and restructured itself as it considered the company “too large to fail” due to its significant contribution to the Croatian economy.

The company recently secured a US$535M loan to help avoid bankruptcy and repay creditors but that may have been a temporary fix due to competitors pushing into the Croatian market.

New programme to protect orangutans on Borneo ome of the world’s largest palm oil companies launched a programme on 13 June to protect critically endangered orangutans and other wildlife on the island of Borneo.

The palm oil company members of the Palm Oil & NGO (PONGO) Alliance include Musim Mas, Sime Darby and Wilmar. They are working with the Orangutan Land Trust and other environmental experts and NGOs to manage orangutans, whose numbers have halved over the past 50 years.

The animals, the largest population of which lives on Borneo, are threatened by poaching, illegal logging and intensive agriculture, and traditional logic has dictated that their protection and palm oil cultivation cannot realistically go hand in hand.

However, new research conducted by Borneo Futures for the Orangutan Land Trust and Wilmar has shown that there are ways for orangutans and the palm oil industry to coexist.

In a joint statement, the palm oil companies that joined

PHOTO: ADOBE STOCK

S

THE LARGEST POPULATION OF ORANGUTANS LIVE ON BORNEO

the PONGO Alliance said they acknowledged their responsibility for ensuring that palm oil cultivation was carried out with minimal impact on local biodiversity and committed to promoting the use of sustainable landscape management.

“The PONGO Alliance’s approach is to engage with all stakeholders on the ground, including palm oil companies, local governments and local communities to implement best management practices for the protection of orangutans

and wildlife in the oil palm landscape,” said Ginny Ng Siew Ling, forest sustainability manager at Wilmar International.

This approach looked at an entire eco region as wild animals did not stay within the boundaries of one particular concession or plantation, the PONGO Alliance said.

“Our research shows that the collaborative approach at the landscape level can become a game changer for wildlife conservation,” said Erik Meijaard, an independent researcher at the Centre of Excellence for Environmental Decisions and the founder of Borneo Futures.

The PONGO Alliance said orangutans could live in palm oil plantantions if developers set aside at least 10% of the plantation area as intact forest, with corridors between them to act as orangutan habitats.

However, Borneo Futures’ research showed that around 10,000 of the great apes still lived on non-certified palm oil concessions and were at the risk of extinction if these habitats were not properly managed.

No dairy names for plant-based products in the EU

T

he EU’s Court of Justice has ruled that plantbased products cannot be marketed with dairy descriptions such as ‘milk’, ‘cream’, ‘butter’, ‘cheese’ or ‘yoghurt’.

The ruling on 14 June said these designations were reserved by EU law for animal products only even if descriptions were used to clarify the plant origin of the product, according to Dairy Reporter.

The decision follows an action brought against Germany’s TofuTown.com, which produces and distributes vegetarian and vegan foods such as ‘Soyatoo Tofu butter’, ‘plant cheese’ and ‘veggie cheese’.

German competition association Verband Sozialer Wettbewerb eV alleged that promoting products in this way infringed EU legislation on designations for

milk and milk products, Dairy Reporter said.

However, TofuTown argued that it did not use ‘butter’ or ‘cream’ descriptions on their own but always in association with words referring to the plant origin, such as ‘tofu butter’ and that the way in which consumers understood those designations had changed considerably in recent years.

The court ruled that dairy designations could not be legally used for marketing and advertising purposes for purely plant-based products unless that product was mentioned on the list of exceptions, which was not the case for soya or tofu, Dairy Reporter said.

European Dairy Association secretary general Alexander Anton was quoted in the report as saying that the decision was “a good day for dairy”.

IN BRIEF BRAZIL: Soyabean sales in Brazil are lagging behind last year’s figures as farmers are hoarding the crop in hopes of fetching better prices, Reuters wrote on 5 June.

According to Brazilian market consultancy Safras & Mercados, soyabean farmers had so far sold 58% of their projected crop this season, well behind the 76% at this time last year and the average figure of 74%.

Luiz Fernando Guierrez Roque, a Safras consultant, said the key factors behind lagging sales were a stronger Brazilian currency and the price of less than US$10/bushel on the Chicago Mercantile Exchange.

Safras projected a bumper soya crop of 113.3M tonnes for the 2016/17 season from Brazil, out of which the total traded by farmers was 66M tonnes on 5 June.

ITALY: Protesters clashed with police to prevent the last 42 of 200 ancient olive trees in Puglia from being removed to a nursery to make way for the controversial US$4.5bn Trans Adriatic Pipeline (TAP) to move gas from Azerbaijan to Europe, Olive Oil Times said on 12 July.

TAP was now moving to phase two of construction, in which it would remove another 2,000 olive trees from the pipeline’s 8km route. Some 10,000 trees could be moved in total.

TAP said the trees would be cared for in a nursery until they could be replanted at their original location but environmentalist and the local authorities feared that moving the trees might expose them to the Xylella bacteria, which ravaged thousands of Puglia’s olive trees in 2015.

3 OFI – JULY/AUGUST 2017 www.ofimagazine.com

Comment and News.indd 2

20/07/2017 12:38

NEWS

Consumer goods firms in sustainable coconut oil project A group consisting of some of the world’s largest chemical and consumer goods producers has formed a development partnership to establish sustainable and transparent coconut oil supply chains in Southeast Asia.

Including global agribusiness giant Cargill, chemical manufacturer BASF, consumer goods firm Procter & Gamble (P&G) and German sustainability agency Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ), the group intends to tackle several challenges faced by small-scale farmers in the world’s two

largest coconut producers, Indonesia and the Philippines.

These challenges included little to no economies of scale, lack of financing and training and a rigid supply scale, the companies said in a joint statement on 27 June.

The new partnership aims to train farmers on good agricultural practices, intercropping and enhanced farm management skills.

Out of the 3,300 enrolled farmers in Southern Mindanao and Southern Leyte in the Philippines and Amurang in North Sulawesi, Indonesia, 800 would also receive additional

training on sustainability standards in order to apply for the Rainforest Alliance certification.

Cargill would train the smallholder farmers and set up certification structures, while the produced oil would be processed by BASF and P&G for home and personal care ingredients and for the nutrition and health markets.

The companies said the project continued work begun through Cargill’s, BASF’s and GIZ’s Nucleus of Change project launched in 2011, which ended in 2015 and produced the world’s first 300 Rainforest Alliance certified coconut farmers.

Unilever freezes Olive oil could be safer for frying Sawit Sumbermas panish researchers have a study suggesting S palm purchasing thatreleased using olive oil to fry food is

G

lobal consumer goods giant Unilever ceased buying palm oil materials from Indonesian palm oil company Sawit Sumbermas Sarana (SSS) on 27 June after a report linked the firm with unsustainable palm oil practices.

In a statement, Unilever said it had independently verified the claims made by Chain Reaction Research (CRR) in its report titled ‘Sawit Sumbermas Sarana: Supplying the Palm Oil Leakage Market, Risks for Purchasers’ through Daemeter Consulting, an Indonesian sustainable development consultancy.

The inquiry concluded that SSS was in breach of Unilever’s sustainable palm oil sourcing policy.

Unilever said it had discontinued purchases from the company in line with its grievance policy and it did not intend to resume sourcing palm oil products from SSS until “clear progess” on a remedial action plan was visible.

“We are actively engaging with SSS and relevant NGOs and stakeholders to work together to determine a way forward for SSS to address and remediate the proven complaints and to demonstrate their commitment to the No Deforestation, No Peat, No Exploitation (NDPE) principles, which are part of our sustainable palm oil sourcing policy,” the company said.

According to the CRR report, in December 2013, more than 95% of SSS land bank was contested due the company lacking regulatory approvals and further assessments showed that SSS subsidiaries continued to deforest land and clear peatland.

not any more harmful than using other oils and may, in fact, be safer.

There is a widespread belief that frying food in vegetable oils could be harmful to health due to aldehydes, toxic chemicals that are produced in the process, according to an Olive Oil Times report on 6 July.

Aldehydes are organic compounds that contain a carbon-oxygen double bond, which are found naturally in the human body. However, consuming excessive amounts of them could contribute to illnesses such as diabetes.

Scientists at Spain’s University of the Basque Country performed a study on olive, sunflower and flaxseed oils, measuring their aldehyde content after heating the oils to 190°C. The results showed that sunflower and flaxseed oils, which are polyunsaturated, produced higher amounts of aldehydes at a faster rate than olive oil, which is monounsaturated.

The research team suspected that the reason behind olive oil’s lower aldehyde content was that polyunsaturated oils contain more regions for chemical reactions than olive oil, which could indicate that olive oil is a safer option for frying food.

However, scientists had so far researched the effects of high aldehyde doses on animals and not humans, and therefore the Spanish team said it was too early to draw conclusions from the study.

Some experts had argued that the risk from frying also depended on the quality and freshness of the oil used and on how hot it was allowed to get, wrote the Olive Oil Times.

Indian soya yields could grow 50%

R

uchi Hi-Rich Seeds has developed a non-GMO soyabean seed variety that could increase yields by 50% when compared to currently used strains.

Set up in 2014 by Ruchi Soya, Agrimax, DJ Hendrick International and Agri-India Holdings, the joint venture has developed commercial seed varieties in just three years and is projecting sales of 27,000 tonnes by 2021, which would give it a 10% market share, according to an Oilseed & Grain News report on 18 July.

“The seeds that we have developed outperform the current seeds available, reducing systemic risk,” said Michael Treytiak, managing director at KMDI International and Ruchi HiRich Seed’s fundraising director.

Treytiak said soyabean yields in India were half of those in North America, primarily due to weather abnormalities, poor farming practices and seed genetics.

India’s soyabean productivity is less than a third of the world average, with the country producing 11.5M tonnes of the 346M tonnes globally in 2016.

Algae-based omega 3 plant to be built in Nebraska

G

erman chemicals maker Evonik and Dutch health company Royal DSM have decided to base their new commercial-scale marine algae-based omega 3 fatty acids production facility in Nebraska, USA. Evonik and DSM said on 15 June that they would invest about US$200M in the facility, to be built in the city of Blair.

The plant, projected to come online in 2019, would have an initial capacity to meet roughly 15% of the total annual demand for EPA and DHA fatty acids by the salmon aquaculture industry.

Blair was chosen as the location due to Evonik’s two-decades-long presence in the city with its facility producing the Biolys brand L-lysine amino acid.

The new plant would be located adjacent to Evonik’s current facility on Cargill’s site, with established access to the raw materials needed to produce the EPA and DHA omega-3 fatty acid oils.

Evonik and DSM announced their Veramaris joint venture in March 2017, stating that it would be the first to produce omega-3 fatty acids for animal nutrition without the need to utilise wild caught fish as a resource.

According to the companies, around 1M tonnes/ year of fish oil is produced globally, with the aquaculture industry consuming some 75% of this total and limited wild fish stocks restricting the amount of available fish oil.

4 OFI – JULY/AUGUST 2017 www.ofimagazine.com

Comment and News.indd 3

20/07/2017 12:38

Crown Iron Works Your Total Processing Solution From start to finish

We have your total processing solution, from preparation to finished product. But more than that, we’re personally invested in making you successful, which is why we’re with you—every step of the way.

Let’s connect. Call or visit:

1-651-639-8900 www.crowniron.com

BIOFUELS NEWS

EPA releases 2018 biofuel volumes proposal

T

he US Environmental Protection Agency (EPA) has released its proposal for the 2018 renewable volume standards (RVOs) as well as the 2019 RVO for biomass-based diesel.

In the proposal, released on 5 July, the EPA called for a total of 19.24bn gallons of renewable fuels to be blended into the US fuel supply, down from the 19.28bn gallon RVO of 2017.

Included in the proposed total are 238M gallons of cellulosic biofuel (down from 311M gallons for 2017), 2.1bn gallons of biomassbased diesel (finalised in 2016) and 4.24bn gallons of advanced biofuel (down from 4.28bn gallons). The RVO for biomass-based diesel for 2019 is set at 2.1bn gallons.

The EPA said it was lowering the RVO in all categories except biomass-diesel due to an “anticipated shortfall” in cellulosic biofuel production, according to the Biomass Magazine.

In its statement on the proposal, the EPA said the volumes were based on “requirements under the law and an analysis

IN BRIEF SOUTH AMERICA: Finnish forestry giant UPM’s biofuels division UPM Biofuels has begun to develop a new feedstock concept based on Brassica carinata grown as a sequential crop in South America.

The sequential cropping period would allow contract farmers to put agricultural land into use outside their main cultivation period without compromising food production, UPM said in a statement on 28 June.

The approach would not cause land use change and would benefit farmers by preventing erosion, improving soil quality and providing additional income during the winter months.

WORLD: Anglo-Dutch oil and gas firm Royal Dutch Shell has been granted exclusive development and licensing rights to SBI BIoEnergy’s biofuel technology.

Using a continuous catalytic process, SBI’s patented technology was capable of converting a wide range of waste oils and greases into drop-in replacements for diesel, jet fuel and petrol that require no engine modifications, Shell said in a 27 June statement.

Shell and SBI said they would work together to prove the technology’s potential and, upon success, scale it up for commercial applications.

of current market dynamics”.

“We are proposing new volumes consistent with market realities focused on actual production and consumer demand while being cognisant of the challenges that exist in bringing advanced biofuels into the marketplace,” said EPA administrator Scott Pruitt.

The EPA also intended to begin a technical analysis to inform a future rule to reset statutory biofuel volumes, which the agency said was required by the Clean Air Act when “certain conditions are met”.

“We expect those conditions to be met in the near future, so we are conducting technical analysis now to inform future reset rules,” Pruitt said.

The proposal drew a mixed reaction from the US biofuel industry.

Bob Dinneen, president and CEO of the Renewable Fuels Association (RFA), said he was “pleased” with the proposal maintaining the conventional biofuel RVO of 15bn gallons.

“By maintaining the 15bn gallon level for corn ethanol, the rule will help to drive more

investment in infrastructure to accommodate higher ethanol blends. We encourage EPA to finalise this rule as quickly as possible,” he said in a statement.

Growth Energy, a US ethanol industry trade association, was more reserved, saying the proposal signalled President Donald Trump’s government was holding onto its promises to support the Renewable Fuel Standard (RFS), but called for increased certainty.

“We would like to see final levels for cellulosic and advanced biofuels continue to give producers and stakeholders certainty in their investment in second generation technology,” said Growth Energy CEO Emily Skor.

The National Biodiesel Board was less enthusiastic in its response and called the proposal out of touch with reality.

“This proposal continues to underestimate the ability of the biomass-based diesel industry to meet the volumes of the RFS programme. This is a missed opportunity for biodiesel,” said NBB vice president of federal affairs Anne Steckel.

Abengoa closes sale of four European ethanol plants

S

pain’s struggling renewable energy company Abengoa Bioenergia completed the sale of its four remaining European ethanol plants to private equity fund Trilantic Europe on 1 June.

According to Trilantic, included in the sale were three Spanish plants in Cartagena, La Coruña and Salamanca (40M, 52M and 53M gallons/year respectively) and one plant in Lacq, France (66M gallons/year).

Additionally, the deal included Egoagricola SA, Abengoa’s subsidiary focused on grain purchases and the handling of dried distiller’s grains (DDGS), reported Ethanol Producer.

The sale was originally announced in March, when Abengoa said the deal would be closed once a “number of conditions” had been met.

In early March, Spanish energy company Cepsa purchased Abengoa’s San Roque plan in Spain for €8M (US$8.6M) The renewables ex-giant also sold off its US

assets in 2016 after declaring bankruptcy, the latest among them the sale of the Hugoton, Kansas, ethanol plant to Synata Bio for US$48M, which beat oil juggernaut Royal Dutch Shell’s US$26M offer (see Biofuels News, OFI November/ December 2016).

Green Plain Inc bought Abengoa’s Madison, Illinois; Mount Vernon, Indiana; and York, Nebraska, plants for US$237M, while its Ravenna Nebraska was sold to KAAPA Ethanol LLC for US$115M and the Colwich, Nebraska facility to ICM Inc for US$3.15M (see Biofuels News, OFI September/ October 2016).

In August 2016, Abengoa presented its updated restructuring plan to enable it to “reinitiate normalised operations”.

Abengoa first announced plans to sell its noncore assets, including its first-generation ethanol plants, in January 2016 as part of a restructuring plan to avoid bankruptcy.

Raízen to boost production with next-generation technology

B

razil’s largest sugarcane ethanol producer Raízen is planning to scale up production by more than five-fold over the next two years at its new secondgeneration biofuel plant.

The plant, located in Piracicaba in the state of São Paulo, has a capacity of 7M litres, which Raízen is set to double in 2017 and reach 40M litres by 2018, the Financial Times reported on 3 July.

While 40M litres was miniscule compared to the 30bn litres of conventional ethanol produced

in Brazil annually, Raízen CEO João Alberto Fernández de Abreu believed it would make the next-generation product cost competitive and provide further proof of its viability.

“Second-generation technology allows you to extract more value from what you have,” de Abreu told Financial Times. “You produce more ethanol in the same area using feedstock that is today being wasted.”

First-generation ethanol plants convert sucrose into ethanol, while

second-generation technologies use enzymes to break down waste plant materials from traditional sugarcane crushing to produce the necessary sugars.

Raízen had 24 conventional ethanol plants in Brazil, but de Abreu said the company could build up to eight additional second-generation plants.

Such an expansion could increase Raízen’s annual production by up to 50%, bringing it to 3bn litres from the current 2bn litres.

6 OFI – JULY/AUGUST 2017 www.oilsandfatsinternational.com

Biofools News.indd 1

13/07/2017 15:16

50 2015

Naturally bleached vegetable oil, shaped by ONE ALL-ROUND SOLUTION: TONSIL®.

THE GOLD STANDARD FOR EFFICIENT AND SUSTAINABLE OIL, FAT AND BIOFUEL PURIFICATION: TONSIL® BY CLARIANT FUNCTIONAL MINERALS.

Powerful against undesired odor, flavor and impurities from crude oils and fats, Clariant’s TONSIL® bleaching earths have now been in use for more than 100 years. To meet today’s growing global demand and ensure certified solutions for your scope of applications, we constantly carry out research into new products as well as into the rapid and flexible optimization of TONSIL® qualities in Europe, America and Asia. In many countries, TONSIL® has already become synonymous with activated bleaching earths, which we view as both a challenge and an obligation for the future.

WWW.FUNCTIONALMINERALS.CLARIANT.COM VISIT US AT OILS + FATS 2017, MUNICH 11.–15. SEPTEMBER, HALL C1, BOOTH 202

TONSIL® bleaching earths set a standard for the efficient and sustainable purification and refinement of edible oils, biofuel feedstocks and technical waxes.

BIOTECH NEWS

China approves GM soya and corn imports

C

hina has approved four new GM crops for import after pledging in June to speed up the review of eight biotech products which had been pending for four years.

The country approved Monsanto’s Vistive Gold soyabeans and Dow Chemical Co’s next-generation Enlist corn variety on 14 June, Reuters reported. On 17 July, it also approved Syngenta’s 5307 insect-resistant corn sold under the Agrisure Duracade brand and Monsanto’s 87427 glyphosate-resistant corn, sold under the Roundup Ready brand.

The Ministry of Agriculture has also renewed import approvals for 14 other GM varieties for three years until 2020. These include

IN BRIEF USA: California has added an ingredient found in Roundup pesticide, manufactured by Monsanto, to its list of cancerinducing chemicals, requiring the product to start carrying a warning label by January 2018.

However, the decision would not ban the chemical from being used on the fields or sold in stores as the proposal did not set rules on how the listed products could be used.

The Los Angeles Times said on 27 June that federal and state officials had not banned glyphosate nationwide as, in their opinion, the chemical had so far been found to have low toxicity and it could be safely used, provided safety instructions were followed.

A Monsanto spokesman said that the firm would “aggressively challenge” the decision.

USA/SOUTH AFRICA: Dow Chemical Company and DuPont announced on 15 June that the Antitrust Division of the US Department of Justice had approved their US$130bn merger on condition they sell certain crop protection products and assets, including one DuPont herbicide and one insecticide, and Dow’s US acid copolymers and ionomers.

Additionally, South Africa conditionally approved the proposed merger on 5 July.

Dow has agreed to make 88 crop strains available to third parties for licensing in South Africa and to register two of its biotech traits in the country.

DuPont will have to divest its entire South African insecticide business.

Syngenta’s MIR162 Agrisure Viptera corn, a Monsanto sugar beet and three Bayer rapeseed products.

Reuters said the approvals had come after China promised to speed up a review of pending import applications as part of trade talks with the USA. However, it still left four other products owned by Monsanto, DuPont and Dow on a waiting list pending approval.

While China does not allow GM crop cultivation for food, it does permit imports of GM products, such as soyabeans and corn, for use in animal feed.

According to Reuters, it took around six years to win import approval for a new GM crop

variety in China compared with under three in other major markets.

Beijing had held back approvals of imported GMO products amid concerns about anti-GMO sentiment in the country and the US industry had repeatedly complained about the lack of transparency in China’s biotech review process, Reuters added.

Dow said its Enlist corn variety would be commercially available in Canada and the USA for the 2018 growing season. The Enlist platform of corn, cotton and soyabeans was Dow’s largest-ever product launch and key to reaching its forecast for boosting seed sales

by US$600M by 2020, Reuters said.

Syngenta to sell canola business, Kansas farmers rumoured to eye Bayer divestments win GMO case

S

wiss pesticide and seeds maker Syngenta has put its canola seed portfolio up for sale as it plans to exit the canola business by next year.

The company – which is being acquired by the China National Chemical Corporation (ChemChina) – would continue servicing its canola portfolio, launched only four years ago in 2013, for the rest of 2017, according to the Western Producer on 22 June.

Chris Davison, head of corporate affairs for Canada at Syngenta, refused to elaborate on the reasons behind the move to leave the canola business.

“There are multiple factors involved for sure. That is a business decision based on consideration of a number of factors related to the current canola seed market in Canada,” he told the Western Producer.

But Syngenta may be eyeing other possibilities in the canola and seeds sector, as the company had reportedly submitted a bid for the assets that the German chemical and pharma company Bayer is divesting to receive approval for its US$66M takeover of Monsanto.

According to Bloomberg, Syngenta and German chemical firm BASF were among the bidders to purchase Bayer’s businesses, which include canola, cottonseed, the LibertyLink herbicide-resistant trait and its glufosinate herbicide.

Bloomberg quoted “people familiar with the matter” as saying that the total cost of the divested Bayer assets would be between US$2.5bn and US$3bn.

BASF and Syngenta executives in March both expressed possible interest in bidding for Bayer’s businesses, but had not yet made final decisions on the bids.

A

Kansas, USA, court has awarded US$217.7M in compensation to farmers who claimed to have been damaged

by Swiss seed firm Syngenta introducing a new GM corn strain without first securing approval from all export markets, FeedNavigator wrote on 24 June Syngenta’s MIR162 Agrisure Viptera seed was approved for the 2011 US growing season but China did not approve the seed until December 2014 and stopped importing US corn at the end of 2013, when it detected traces of MIR162 in US corn shipments.

This was said to have damaged the corn market for US producers.

The case was the first of eight state class action lawsuits against Syngenta, which is planning to appeal the Kansas decision.

The Swiss firm is finalising its US$43bn merger with China’s ChemChina.

Brazil approves world’s first GM sugarcane variety

B

razil’s National Biosafety Technical Commission (CTNBio) approved on 8 June the commercial use of the world’s first genetically modified (GM) sugarcane strain, developed by Brazilian sugarcane firm Centro de Tecnologia Canavieira (CTC).

The new CTC 20 BT sugarcane variety is resistant to crop damage caused by the Diatraea saccharalis sugarcane borer, which is the main sugarcane pest in Brazil, according to the Brazilian Sugarcane Industry Association (UNICA).

D. saccharalis is said to cause around 5bn reals (US$1.5bn)/

year worth of damages due to losses in sugarcane yield and quality and insecticide costs.

The BT gene found in CTC 20 BT has been used in both Brazil and globally for more than 20 years in modified crops, including soyabean, maize and cotton.

CTC CEO Gustavo Leite called the approval of the crop a “great achievement” for the Brazilian sugar ethanol sector.

He said that the CTC 20 BT would not only add to producers’ economic gains, but it could also simplify logistics and improve sugarcane operations’ environmental management.

The scientific dossier accompanying CTC 20 BT was submitted to CTNBio for approval in 2015 and processing studies proved that the sugar and ethanol produced from the strain were identical to those from conventional sugarcane.

CTC now planned to start distributing the CTC 20 BT seedlings to producers, followed by a “closely monitored” field planting, Leite said.

The distribution process was aligned with the schedule for obtaining international approvals for sugar produced from the modified strain.

8 OFI – JULY/AUGUST 2017 www.oilsandfatsinternational.com

Biotech News.indd 1

20/07/2017 12:30

Extending oleochemistry Glycerin to Bio Propylene Glycol Our quest for extending oleochemistry never stops.

Air Liquide Engineering & Construction offers bio-based process of converting abundant glycerin to a fast growing outlet with: five-fold increase in product value highly competitive drop-in alternative to conventional propylene glycol commercially proven licensed BASF technology safe, sustainable process reduced environmental footprint

Air Liquide Engineering & Construction leads the oleochemical market through its portfolio of Lurgi technologies.

engineering-airliquide.com/oleochemicals oleo@airliquide.com

TRANSPORT & LOGISTICS NEWS

G3 expands with terminal at Port of Hamilton, Ontario G

3 Canada Limited’s new lake terminal at the Port of Hamilton, Ontario, was officially opened on 21 June.

“The terminal is the centrepiece of G3’s entrance into the southern Ontario grain handling market,” the company said.

Construction of the 50,000 tonne facility began in 2015 and was completed on schedule in April 2017. G3 said the Hamilton terminal featured technology that maximised loading and unloading speed.

G3 – previously CWB – is majority-owned by the Global Grain Group, a joint venture between Bunge and state-owned Saudi Agricultural and

Livestock Investment Co (SALIC) that bought a 50.1% share in April 2015. CWB was formerly the Canadian Wheat Board.

G3 purchases grains, oilseeds and special crops from farmers and third parties across Canada and provides grain handling and logistics to move these commodities across the country to port terminals.

It offers contracts for crops such as wheat, durum, canola, barley, flax, soyabeans, corn, rye and oats. It also operates primary elevators in Manitoba and Saskatchewan states and owns a laker vessel that transports grain between port facilities on the Great Lakes and St Lawrence

Seaway, as well as the largest private fleet of grain hopper cars in Canada.

The newest Hamilton terminal joins the Thunder Bay terminal operated in Ontario state.

G3 also operates two port terminals in TroisRivieres and Quebec in Quebec state.

Last December, G3 announced it would be building a new export grain terminal in North Vancouver, British Columbia, its first new grain terminal constructed at the Port of Vancouver since the 1960s (see Transport News, OFI February 2017). The terminal would be able to handle cereal grains, oilseeds, pulses and special crops.

ADM opens new bulk silo

U

Your storage partner

S food processing and commodity trading firm Archer Daniels Midland (ADM) opened a new bulk commodity transport silo on the River Danube in Silistra, Bulgaria, on 21 June.

The Port ADM Silistra silo, with a 20,000 tonnes of capacity, was built close to the village of Aydemir in northeast Bulgaria to accommodate the area’s strong agricultural production, ADM said in a statement.

The silo would add incremental volumes to ADM’s Black Sea exports and provide local farmers with access to transportation networks connecting Eastern Europe to global markets.

“With expansions such as Port ADM Silistra, ADM will be well positioned to meet rising customer demand across the region and help local farmers to grow their businesses,” ADM said.

Port congestion in China

C

Vopak Vlaardingen is a subsidiary of Royal Vopak, the world’s leading independent liquid bulk tank storage provider. Offering a total storage capacity of around 600,000 cbm, Vopak Vlaardingen operates the largest terminal dedicated to vegetable oils and fats, biodiesel, oleochemicals and base oils in the Port of Rotterdam.

Our customers expect the highest level of service and look at us as their partner in new requirements of product handling. We can offer dedicated infrastructure for loading and discharging vessels, barges, rail and road tank cars.

Discover more at www.vopak.com or contact us by sales.vlaardingen@vopak.com

hinese ports are facing severe congestion with ships carrying as much as 700,000 tonnes of soyabeans waiting to discharge their cargo as a result of a purchase spree in recent months, reported Reuters on 5 July.

At the end of June, there were up to 11 ships stuck at the southeastern Rizhao port waiting to unload and other ships were also waiting at ports elsewhere in China.

Soyabean stocks at Rizhao had reached a four-year high of 486,460 tonnes at the beginning of June, Reuters said, quoting data from the China National Grain and Oils Information Center (CNGOIC). Weekly stocks of soya meal hit 1.2M tonnes at the start of July, the highest level in at least six years.

In May, China imported a record of 9.59M tonnes of soyabeans and June imports reached approximately 9M tonnes as well.

On 1 July, China also lowered the VAT on soyabeans from 13% to 11%, which was putting additional pressure on ports as some ships that had arrived at the end of June had chosen to wait instead of discharging right away to secure a better price on the beans, Reuters said.

The CNGOIC was expecting the congestion to continue for the time being, as 8.5-9M tonnes of soyabean were expected to be imported into China in July.

10 OFI – JULY/AUGUST 2017 www.ofimagazine.com

Transport News.indd 1

14/07/2017 12:45

TRANSPORT & LOGISTICS NEWS

Nibulon to improve grain transportation

Clean and efficient

T

he World Bank’s International Finance Corporation (IFC) agreed on 19 June to provide a financing package to Ukrainian grain trader Nibulon to help improve grain transportation in the country.

The US$100M loan package is intended to help strengthen agri-related infrastructure, reduce crop losses and enhance food security.

Nibulon is one of Ukraine’s largest domestic producers and exporters of agricultural products including wheat, barley, corn, rye and sunflower.

Its transhipment terminal for grain and oilseed crops in Mykolayiv city handles wheat, barley, corn and rapeseed. It has elevators in Cherkasy, Kherson, Khmelnyts’kyv, Kyiv, Mykolayiv, Poltava, Zaporizhzhya and Zhytomyr, regions handling these crops. In addition, it operates a fleet of vessels along the river transport waters in Ukraine.

The IFC said Nibulon was planning to use its funds to modernise and expand its shipping terminals and increase its trading volumes by 40% to approximately 7M tonnes by 2021.

The company’s CEO, Oleskiy Vadatursky, said Nibulon was working on a long-term investment programme that would also contribute to developing Ukraine’s agri sector.

“Last year, we managed to optimise transport costs for grain delivery, reduce delivery times and free up roads in several regions. In the next two to three years, we plan to create a modern system to store and transport grain,” Vadatursky explained.

Nibulon sourced its agri commodities from more than 4,700 farmers across Ukraine, to which it added value through securing storage, transportation, cleaning, and drying.

The company said it was actively investing in developing river transportation, providing a cost-efficient and more environmentally-friendly option to truck and rail transport.

Ukraine is a global leader in producing grains and oilseeds, according to IFC, accounting for 10% of global wheat, 15% of corn and 20% of barley trade.

vacuum systems for refining and deodorising

ICE Ice condensation ACL Alkaline Closed Loop

Munich, 11.-15.09.2017 Kuala Lumpur, 14.-16.11.2017

Van den Bosch introduces flexitanks

G

lobal logistics supplier Van den Bosch is extending its deep sea activities with the introduction of flexitanks, which it says have grown into a popular transport mode.

“In addition to the current availability of tank containers, liquid bulk products can now also be shipped in flexitanks to destinations worldwide,” the company said on 26 June. “We’ve noticed a growing interest in flexitanks to supplement our current activities,” said Paul van de Vorle, director of business development at Van den Bosch. “By offering flexitanks, we want to further develop our intermodal activities with a focus on Europe and Africa.

“Flexitanks are suitable for the transport of liquid food and nonInternational Maritime Organisation (IMO) chemicals. Popular export products, such as oil, wine and glycerine are already frequently shipped in flexitanks,” Van de Vorle explains. “The huge advantage is that flexitanks are for single use only. Therefore, a return load is not required and customers benefit from favourable rates based on one way use.”

Van de Vorle said flexitanks also had a capacity of up to 24,000 litres, so the payload was significantly higher compared to alternative forms of transport, such as intermediate bulk containers (IBCs) and drums. “It leads to a reduced number of transport movements.

Moreover, there is no risk of contamination due to the single use.”

Van den Bosch specialises in the transport of liquid and dry bulk for the food and chemical industries and acts as a bulk supply chain partner for major edible oil refineries such as IOI, Cargill, Olenex and Sime Darby in delivering vegetable fats.

It has opened sites in Dubai, Cape Town; and Tema, Ghana, in the past few years, including a tank cleaning station in the Port of Tema last year. It has also expanded services in Africa to load edible oils and fats including cocoa and shea butter.

www.koerting.de +49 511 2129-253 · st@koerting.de

11 OFI – JULY/AUGUST 2017 www.ofimagazine.com Clean and Efficient-102x297(105x303 bleed size)-oils and fats-170117.indd 1

Transport News.indd 2

17.01.2017 15:41:36

14/07/2017 12:45

R E N E WA B L E M AT E R I A L S N E W S

IN BRIEF INDIA: Gujarat Oleo Chemical has filed for bankruptcy with the National Company Law Tribunal as a result of US$776.6 million in debts, Biofuels Digest reported on 13 June. The company used castor biodiesel to produce undecylenic acid and heptaldehyde through a continuous cracking process.

It was India’s first biodiesel producer and had been selling biodiesel to the Indian Oil Company since at least 2004, the report said.

CHINA: Speciality chemical firm Eastman Chemical Co has launched a new bioplastic material in China, which it expects to become the largest market for its Treva product, Plastic News reported on 20 June. Treva is 50% bio-based, sourced from trees from sustainably managed forests, and 50% petrochemical-based.

Kevin Duffy, manager of business development for specialty plastics at Eastman, said Treva would be available initially in grades for injection moulding and extrusion, with target markets in eyeglasses, electronic displays, electronics and cosmetic cases. Medical applications were a possible future target.

“If our hypothesis is right about ophthalmic, then we’ll sell more in China than anywhere else in the world for ophthalmic,” said Randy Beavers, Asia Pacific and global sales director.

AUSTRALIA: US industrial science firm Amyris Inc plans to build a new plant in Queensland to produce its sugarcane-based farnesene ingredient, the company announced on 20 June.

The plant is the next step in a project to develop an industrial biotechnology hub in Southeast Asia, first announced in December 2016.

“Amyris is seeking to replicate its successful biorefinery in Brazil and sees Queensland as an ideal location due to the abundance of sugarcane and close proximity to Asia,” Queensland Premier Annastacia Palaszczuk said. “The biorefinery would aim to produce 23,000 tonnes/year of farnesene, used in a range of products including cosmetics, nutraceuticals, polymers and lubricants.”

L’Oreal sells The Body Shop to Brazil’s Natura Cosméticos

F

rench cosmetics group L’Oréal signed a contract on 27 June to sell The Body Shop to Brazilian cosmetics maker Natura Cosméticos, reports the Financial Times.

“The proposed sale is subject to clearance by antitrust authorities notably in Brazil and in the USA, and is expected to close during 2017,” L’Oreal said in a statement.

The Financial Times said the deal would give the British chain, with locations around the world, an enterprise value of €1bn (US$1.4bn).

The Body Shop had faced increasing competition from other

brands offering similar products based on natural ingredients with no animal testing, the newspaper said.

Body Shop products include cocoa butter, shea butter and argan oil.

Natura is the largest Brazilian cosmetics company by revenue, manufacturing and marketing beauty, household, personal care, skin care and hair care products.

The company said that after integrating The Body Shop, the combined group would have a turnover of R$11.5bn (US$3.5bn), with 17,000 employees and 3,200 stores, the Financial Times reported.

“The acquisition of The Body Shop is a decisive step in making Natura Group an international player in the cosmetics industry, following in the footsteps of our previous acquisition of Aesop in 2013,” said Natura chief executive João Paulo Ferreira.

“In a sense, Natura and The Body Shop are like twins. We have been walking parallel paths in the past, and today, those paths are converging.

“We both share a same vision of cosmetics, advocating the use of natural ingredients and seeking to use our business as a platform to raise environmental consciousness,” he added.

RSPO awards BASF with supply chain certification

G

erman chemical producer BASF’s production network of 20 sites has received the Roundtable on Sustainable Palm Oil (RSPO)’s Supply Chain Certificate at the RSPO’s fifth annual European meeting.

The RSPO Supply Chain Certification Standard is a series of auditable requirements, designed for use by organisations in the palm value chain to demonstrate implemented systems for control of RSPO certified oil palm products.

BASF had in the past year “virtually doubled” its sales of certified palm kernel oil-based ingredients for the cosmetics, detergents, cleaning agents and foodstuffs industries, the company said on 9 June.

Globally, some 71M tonnes of palm products are

manufactured annually, of which around 10% or 7M tonnes is palm kernel oil, according to BASF. Only about 1.3M tonnes of the palm kernel oil is RSPO certified, the company added.

BASF, which has been a member of the RSPO since 2004, processed a total of 508,000 tonnes of palm-based raw materials in 2016, which makes it one of the largest palm product processors in the world.

“We have made some good progress in 2016 in the changeover to certified ingredients for the cosmetics industry and we believe that sustainable manufacture of palm oil is possible,” said Jan-Peter Sander, senior vice president of BASF Personal Care Europe.

Unilever expands in Latin America Stepan buys BASF

G

lobal consumer group giant Unilever announced on 15 May that it had agreed to acquire the personal and home care brands of Quala, a Latin American consumer goods firm.

Quala operates in 10 Latin American countries: Colombia, Dominican Republic, Ecuador, El Salvador, Guatemala, Haiti, Honduras, Mexico, Peru and Nicaragua.

Its personal and home care portfolio includes leading local brands Savital/Savilé (hair care and skin cleansing), eGo (male hair care and styling), Bio-Expert (hair care), Fortident (oral care) and Aromatel (fabric conditioners), with a combined turnover of over US$400M in 2016.

Unilever said Quala’s Savital/ Savilé was the number one hair care brand by volume in Colombia,

with a good presence in the rest of the North Latin America region. It used aloe vera as the core ingredient across the brand, and incorporated other functional ingredients – such as argan oil, keratin, and biotin. eGo was the number one male hair grooming brand in Colombia and Mexico, with a presence across eight markets.

Fortident was the number two oral care brand in Colombia and Ecuador, while Aromatel was number two in fabric conditioners in Colombia and Ecuador. t On 4 May, Unilever Myanmar announced a joint venture with Europe & Asia Commercial Company (EAC) to manufacture, market and distribute personal and home care products in Myanmar. Unilever EAC Myanmar’s annual sales will exceed €100M.

surfactants plant

S

peciality chemicals firm Stepan Company announced on 13 June that it had agreed to buy BASF’s surfactants plant in Mexico and part of its associated surfactants business, through a subsidiary in Mexico.

The Ecatepec facility is located close to Mexico city and has over 50,000 tonnes of capacity.

The deal is expected to close in fourth quarter 2017.

Stepan Company is a leading producer of surfactants, key ingredients in consumer and industrial cleaning compounds.

It has been a member of the Roundtable on Sustainable Palm Oil since 2011 and has set a target of 2020 to use 100% certified palm kernel oil and derivatives.

12 OFI – JULY/AUGUST 2017 www.ofimagazine.com

July.Aug renewables.indd 1

13/07/2017 15:44

Getting the best out of your seeds is our ambition.

Process design

Pr

od

uc

ti o n

for your needs.

Meet us at oils&fats September 11-15, 2017, Munich, Germany

DIARY OF EVEN TS

7-8 AUGUST 2017

3-5 OCTOBER 2017

11-15 SEPTEMBER 2017

1st Palm Biodiesel Conference VENUE: Holiday Inn Glenmarie, Kuala Lumpur, Malaysia CONTACT: Ms Chan Pek Wan/Ms Chitra Sellappan, Secretariat, Malaysian Biodiesel Association (MBA) Tel: +603 6286 7200 E-mail: secretariat@mybiodiesel.org.my Website: www.mybiodiesel.org.my

24-25 AUGUST 2017 4th International Conference on Rice Bran Oil 2017 (ICRBO 2017) VENUE: Pathumwan Princess Hotel, Bangkok, Thailand CONTACT: Riantong Singanusong, Conference Secretary, International Association of Rice Bran Oil, Thailand E-mail: riantongs@nu.ac.th Website: www.icrbo2017.nu.ac.th

27-30 AUGUST 2017 15th Eurofedlipid Congress VENUE: Uppsala Konsert & Kongress, Sweden CONTACT: Eurofedlipid, Germany Tel: +49 69/79 17 533 E-mail: info@eurofedlipid.org Website: www.eurofedlipid.org/meetings/ uppsala2017/index.php

3-8 SEPTEMBER 2017 FOSFA Basic Introductory Course VENUE: Royal Holloway, University of London, UK CONTACT: FOSFA International, UK Tel: +44 207 374 2346 E-mail: amy.morrell@fosfa.org Website: http://www.fosfa.org/events/ basic-introductory-course

5-6 SEPTEMBER 2017 4th High Oleic Oils International Congress VENUE: Bucharest, Romania CONTACT: FAT & Associés, France Tel: +33 567 339 206 Fax: +33 567 339 203 Website: http://higholeicmarket.com/ hoc-2017

oils+fats International Trade Fair for Technology and Innovations VENUE: Messe München, Munich, Germany CONTACT: Messe München, Germany Tel: +49 89 94911328 E-mail: info@oils-and-fats.com Website: www.oils-and-fats.com/index-2.html

PALMEX Indonesia VENUE: Santika Premiere Dyandra Hotel & Convention, North Sumatra, Indonesia CONTACT: PT Fireworks Indonesia.

Tel: +62 21 26051028 or +62 21 26051029 E-mail: info@asiafireworks.com Website: www.palmoilexpo.com

12-13 SEPTEMBER 2017 Novel Technologies in Oilseed Processing, Edible Oil Refining and Oil Modification VENUE: ICM International Congress Center, Munich, Germany CONTACT: Ignace Debruyne & Associates VOF, Belgium Tel: +32 51 311 274 E-mail: info@smartshortcourses.com Website: www.smartshortcourses.com/ oilprocess18/program.html

13-15 SEPTEMBER 2017 Globoil India 2017 VENUE: Renaissance Mumbai Convention Centre Hotel, India CONTACT: Tefla’s, India Tel: +91 9820990012 /+91 7506502201 /+91 7045363088 /+91 22 62231245 E-mail: teflas@gmail.com; events@teflas.com Website: www.globoilindia.com

14-15 SEPTEMBER 2017 6th ICIS European Surfactants Conference VENUE: Hilton Amsterdam, Netherland CONTACT: ICIS, UK Tel: +44 20 8652 3887 E-mail: events.registration@icis.com Website: www.icisconference.com/ europeansurfactants17

19 SEPTEMBER 2017 Black Sea Oil Trade VENUE: Hilton Kyiv, Ukraine CONTACT: UkrAgroConsult, Ukraine Tel: +38 44 451 46 34 E-mail: conference@ukragroconsult.org Website: www.ukragroconsult.com/bso/2017/ en/conference

4 OCTOBER 2017 Global Oils and Fats Forum (GOFF) 2017 VENUE: Washington DC, USA CONTACT: Haznita Husin or Mohd Izham Hassan, Malaysian Palm Oil Council (MPOC) E-mail: haznita@americanpalmoil.com; izham@mpoc.org.my Website: www.mpoc.org.my/Palm_Oil_Trade_ Fair_and_Seminar_(POTS)_2017.aspx

4-5 OCTOBER 2017 Biofuels International Conference & Expo VENUE: Sheraton Grand Hotel & Spa, Edinburgh, UK CONTACT: Woodcote Media, UK Tel: +44 20 8687 4138 E-mail: tracy@biofuels-news.com Website: www.biofuels-news.com/conference

17-19 OCTOBER 2017 Argus Biofuels Conference 2017 VENUE: Jumeirah Carlton Tower, London, UK CONTACT: Argus Media, UK Tel: +44 20 7780 4341 E-mail: biofconf@argusmedia.com Website: www.argusmedia.com/events/argusevents/europe/argus-euro-biofuels/home

23-27 OCTOBER 2017 National Renderers Association 84th Annual Convention VENUE: Ritz-Carlton, San Juan, Puerto Rico CONTACT: Marty Covert, National Renderers Association, USA Tel: +1 703 683 0155 E-mail: co@martycovert.com Website: www.nationalrenderers.org/events/ calendar

22-23 SEPTEMBER 2017

11-14 SEPTEMBER 2017 17th AOCS Latin American Congress and Exhibition on Fats and Oils VENUE: Grand Fiesta Americana Coral Beach Hotel, Cancun, Mexico CONTACT: AOCS Meetings Department, USA Tel: +1 2176934821; Fax: +1 2176934865 E-mail: meetings@aocs.org Website: http://annualmeeting.aocs.org

1st ICIS Indian Surfactants Conference VENUE: Mumbai, India CONTACT: ICIS, UK. Inara Mironova, senior conference producer, ICIS, UK Tel: +44 20 7911 3134 E-mail: inara.mironova@icis.com Website: www.icisconference.com/ indiansurfactants2017

24-25 OCTOBER 2017 11th ICIS World Oleochemical Conference VENUE: Barcelona, Spain CONTACT: ICIS, UK Tel: +44 20 8652 3887 E-mail: events.registration@icis.com Website: https://www.icisconference.com/ worldoleochemicals17

For a full listing of oils and fats industry events, visit our website at: www.ofimagazine.com

14 OFI – JULY/AUGUST 2017 www.ofimagazine.com

Diary.indd 1

14/07/2017 11:38

DI ARY O F E V E NT S

www.dsengineers.com

25-26 OCTOBER 2017 Bulk Liquid Storage 2017 VENUE: Dubrovnik, Croatia CONTACT: Cheryl Williams, Active Communications International Tel: +44 203 141 0623; E-mail: cwilliams@acieu.net Website: www.wplgroup.com/aci/event/european-bulk-liquid-storage

29 OCTOBER - 1 NOVEMBER 2017 Algae Biomass Summit VENUE: Grand America Hotel, Salt Lake City, USA CONTACT: Algae Biomass Organization, USA Tel: +1 877 531 5512; E-mail: info@algaebiomass.org Website: www.algaebiomasssummit.org

30-31 OCTOBER 2017 9th International Symposium on Deep-Fat Frying VENUE: Shanghai, China CONTACT: Chinese Cereals and Oils Association (CCOA) Tel: +86 106 835 7511; E-mail: wcf@ccoaonline.com Website: www.eurofedlipid.org/meetings/shanghai2017/index.php

31 OCTOBER - 1 NOVEMBER 2017 Bulk Terminals 2017 VENUE: London, UK CONTACT: Association of Bulk Terminal Operators Tel: +33 321 477219; E-mail: events@bulkterminals.org Website: www.bulkterminals.org/events.html

1-3 NOVEMBER 2017 12th Indonesian Palm Oil Conference (IPOC) and 2017 Price Outlook VENUE: The Westin Resort Nusa Dua, Bali, Indonesia CONTACT: IPOC Secretatiat, Indonesia Tel: +62 21 57943852; E-mail: info@gapkiconference.org Website: www.gapkiconference.org

14-16 NOVEMBER 2017 PIPOC 2017 VENUE: Kuala Lumpur Convention Centre, Kuala Lumpur, Malaysia CONTACT: Malaysian Palm Oil Board (MPOB) E-mail: pipoc2017@mpob.gov.my Website: http://pipoc.mpob.gov.my

17-18 NOVEMBER 2017 PORAM Annual Forum, Dinner, Golf Challenge VENUE: One World Hotel, Kuala Lumpur, Malaysia CONTACT: The Palm Oil Refiners Association of Malaysia (PORAM) Tel: +603 7492 0006; E-mail: info@poram.org.my Website: www.poram.org.my/p/

Serving the Vegetable Oil Industry From Basic Engineering to Full Turnkey Project Single Point Responsibility through EPC or EPCM+® with guaranteed: � Process Performances � Time Schedule � Budget

27-30 NOVEMBER 2017 15th Annual Roundtable Meeting on Sustainable Palm Oil VENUE: Grand Hyatt Bali, Indonesia CONTACT: Roundtable on Sustainable Palm Oil, Indonesia E-mail: letchumi.achanah@rspo.org

7-8 DECEMBER 2017 Fats & Oils Istanbul / Feeds & Grains Istanbul 2017 VENUE: InterContinental Istanbul Hotel, Turkey CONTACT: Agripro, Turkey Tel: +90 212 236 0345; E-mail: info@fatsandoilsistanbul.com.tr Website: www.fatsandoilsistanbul.com.tr 15 OFI – www.ofimagazine.com

Diary.indd 2

Engineers & Contractors Brussels • Belgium Tel.: +32 (0)2 634 25 00 Fax: +32 (0)2 634 25 25 info@dsengineers.com

Reliability through Experience

14/07/2017 11:38

I NTE RN ATION AL M ARKET REVIEW

Big supplies keep costs down FIGURE 1: VEGETABLE OIL PRICES, MONTHLY AVERAGES (US$/TONNE)

CHARTS: JOHN BUCKLEY

If the Northern Hemisphere summer turns out as normal, global oil and oilseed markets are set to experience another season of plenty. John Buckley writes

A

fter the huge price swings caused by crop shortfalls at the start of the last decade, oil markets have had an unusually stable period in the last three or four years. Raw material supplies – oilseed crops and their crush product – are growing faster than expected and exceeding demand, but the stock build-up implied by that does not, so far, look excessive. Barring a summer weather upset, another season of plenty suggests this period of low consumer costs will continue for some time yet, which may pay some dividends in extra demand.

It is not surprising that the market-leading soya complex has been heading “south” in the period since our last review (see OFI March/April 2017) – the Chicago market’s front month recently nudged US$9/bu (about US$331/tonne) for the first time since April last year and it could go lower still. Despite some initial weather issues, the Latin American crops are turning out significantly bigger than expected – Brazil’s going up by 10M tonnes to reach 114M tonnes, Argentina’s by 2.3M tonnes to 57.8M tonnes and even Paraguay managing to add a further 1.1M tonnes to total 10.3M tonnes.

In total, world soyabean output estimates have risen by about 14.7M tonnes over recent months, equal to an extra 2.7-2.8M tonnes of soyabean oil and putting the global crop 38.4M up on the year (nearly 7M tonnes in oil equivalent). Crush is actually seen rising by a more modest 15.3% but that is ample to meet a forecast 1.5M tonnes of soyabean oil demand.

The USDA’s early forecasts for the coming oilseed marketing year that starts on 1 September have global soyabean output contracting somewhat, despite US farmers predicted to push up their acreage by 7.3% to a new record 36.2M ha. USDA reasons that US yields will slip back from last year’s record 52.1 tonnes/ha closer to the previous season’s 48 tonnes/ha. Current crop ratings support that view, making the official prediction of just under 116M tonnes look feasible, if not slightly generous at this stage.

Soya in Latin America That is still a massive (second biggest ever) crop, especially in the context of what is being produced in Latin America. Also, as well as growing large crops, both Brazil and Argentina are carrying forward larger stocks than usual after earlier weather delays to harvest and, in Brazil’s case, currency issues holding back export sales. That suggests the USA will have more competition than usual during its peak post-harvest marketing season this autumn.

The USDA’s early prognosis for the following Latin American crop is a bit less bearish, viewing Brazil dipping back by 7M to 107M tonnes and Argentina holding steady around 57M. However, so far away from the Latin American planting season, these can only be tentative guesses as to how farmers will respond to the cheaper soya market.

Brazil, in any case, may be cushioned again by its weak currency, raising export revenues and grower incomes from “soya dollars”.

Growth in global soya crush is still heavily dependent on China’s ongoing expansion. Of the world total crush growth of about 11M tonnes, China is expected to account for about 45%. The rest is spread mainly over the big producers in the Americas. Smaller but significant increments to crush are also expected for India and Europe.

Palm oil production Over the past year, soyabean oil disposal clearly had a big helping hand from the relative tightness of supply for the usual market leader, palm oil. Crude palm oil futures prices (Bursa Malaysia) rose from lows of around US$520 in mid-2014 – before the El Niño dry-weather system was first flagged as a possibility – right through to the start of 2017, when it peaked at around US$760/tonne dollar equivalent. Since then, this market has tumbled again by about 10%, weakened by recovering production in Malaysia and Indonesia and by weaker than expected export trade.

Palm oil prices might have weakened faster and further had production picked up earlier and faster than it has. Even during May, the month-on-month increase for Malaysia was less than 7%, although compared with the unusually low May 2016 number, it was up by a much more impressive 21%.

For the calendar year to date, Malaysian output is also running almost 19% up. Indonesian May output was meanwhile estimated to have jumped by a hefty 16.6%.

As the production recovery crawled into the normally busier pre-Ramadan export period, stocks also rose, but only slowly (2.6%), keeping

some of the pressure off prices. That may continue for a little while yet. As this issue went to press, plantation sources were indicating a production fall in both the leading producer countries for June due to fruit being picked either too soon or too late around seasonal holidays, resulting in lower yields and oil extraction rates. However, palm bears and bulls may remain evenly matched for the near term amid trade estimates that June import demand was falling again as consumers in Muslim countries used up their larger purchases in the build-up to Ramadan.

Other bearish factors were coming on the palm oil demand radar in mid-2017. One was India’s own bigger oilseed crop, fed by better monsoon rains after two dry years. Although this top palm buyer’s oil consumption continues to grow at a healthy pace each year, this could soften the demand for imported edible oils. Traders were also concerned that the number two palm buyer China might take a bit less in the months ahead if it continued to feed off its – still large – domestic stockpiles of rapeseed and oil and/or the extra supplies of oil from its growing soyabean crush.

Purchasing plans of these and other palm oil importers, large and small, will also be influenced by how palm oil prices evolve in relation to those of the other major oils, especially soyabean oil – supplies of which could turn out larger than expected.

Malaysian palm oil exports for the year to date (to the end of May) were running about 4.7% up on the same period last year. Among the top customers, China was taking about 22% more than last year, but India was importing 30% less.

Pakistan’s purchases were up, but that too was offset by a downturn for Bangladesh. An interesting development was a more than doubling of Iranian imports, which, at some 220,000 tonnes, put it into the league of leading customers.

The impression lingers that competitive pressures between palm and soya will be a key driving force in relative low pricing for most vegetable oils over the second half of 2017 – and possibly well beyond.

Palm – like rapeseed and soyabean oil – producers must also take note of what has been happening in

16 OFI – JULY/AUGUST 2017 www.ofimagazine.com

Buckley.indd 1

18/07/2017 09:04

I NT E RN ATION AL M ARKET REVIEW

the energy sector.

As we went to press, the Brent crude benchmark was trading around US$45.50 a barrel compared with US$56 in early March, negating all the gains it achieved from OPEC teaming up with Russia earlier in the year to curb supplies. As many pundits had predicted, the brief rally that caused in crude markets was enough to get US investment cranking up again in the fracking/shale oil sector.

Even so, the speed with which crude oil prices relapsed was surprising, so it may influence plans of the big vegetable oil biodiesel producers of Indonesia, Malaysia, the USA, Brazil and Europe.

It does seem to question just how realistic are the ambitious expansion programmes aired by Indonesian and, to a lesser extent, Malaysian palm oil producers earlier this season.

Rapeseed and sunflower Oil supplies are also expected to get a boost from the soft seeds, rape and sunflower, as their crops increase in the year ahead. Despite some early delays from rather mixed weather, top rapeseed producer Canada’s planted area is expected by many to set a new record this spring. The USDA’s recent take on this was 9.54M ha, which – with yields near last year’s level – could turn in a 21M tonne crop versus last year’s 18.5M tonnes. Official body Statistics Canada has just issued its own update at a slightly lower 9.22M ha, which traders say may still err on the high side of what is likely.

Canada’s rapeseed exports are expected to grow on the assumption China will be importing more

while Canada’s domestic crush is seen at similar levels to this season’s (currently expected to end with a gain of about 1M tonnes or about 11.6%). A crop of that size would allow some replenishment of this season’s extremely tight Canadian carryover stocks, keeping upward pressure off forward rapeseed prices, which are already trading at big discounts to the tight old-crop market.

Estimates for Europe’s next rapeseed crop have also crept up a little in the recent months, to around or just over 21M tonnes against 20.4M tonnes last year. As demand for rapeseed oil has dipped in Europe in the past season – in large part due to biodiesel growth flattening out – this suggests a more balanced market with less potential for upside price pressures. Some industry sources cite overcapacity in Europe’s crush and biodiesel industry and uncertainties caused by recent EU moves to curb crop use in biofuels.

European food demand for rapeseed and other soft oils may also be kept in check by improving domestic and global supplies of sunflower oil.

Europe’s own sunflower crop is currently seen increasing to around 8.6M tonnes from last year’s 8.4M tonnes and the previous season’s 7.7M tonnes.

This is providing recent heatwaves and dry weather in France and southern Europe, where most of the crop is grown, have not spoiled the outlook for the approaching harvest.

Sunflower output in Russia is also expected to edge up again to around 11M tonnes – about 2M tonnes or almost 20% more than it produced just two years ago. Ukraine’s crop is meanwhile seen around 14M tonnes versus last year’s 12.75M and

2015’s 11.9M tonnes.

As both of the former Soviet producers are channelling more into domestic crush, but not growing their own product consumption very rapidly, it suggests another year of good sunflower oil exports to buyers, led by the EU, Turkey and India. Sunflower oil has sustained a lower than usual premium over rival edible oils over the past two seasons, helping to build the demand base.

Global markets As well as these four market-leading edible oils, the sector will get a supply boost from aggregate growth in supplies of most other vegetable oils.

These include coconut, cottonseed, palm kernel, groundnut and even olive oil, which is entering an on-year in its biennial cycle for most producer countries. In total, global oil production is expected to rise by about 8.4M tonnes or 4.5%, while consumption increases at just under 3% – a bit slower than the average of recent years.

By far the biggest consumption increases are expected to take place, as usual, within the two “mega consumers” China and India, forecast to add over 1M tonnes each to their 2017/18 consumption.

Next biggest gains are seen in producing countries – the Americas and the Asian palm oil suppliers.

However, large and affordable supplies (the firm dollar notwithstanding) are also expected to sustain market development in a large number of smaller/ moderate-sized consuming countries so demand growth might yet prove underrated. w John Buckley is OFI’s market correspondent

Oil-Dri’s adsorbent products have helped produce quality edible oils worldwide for over twenty-five years. Our Pure-Flo® and Perform® products are backed by world-class technical services at our global R&D center and supported by our technical sales experts in the field to help you make better oil.

410 N. Michigan Ave., Chicago, IL 60611 | 312-321-1515 | pure-flo.com | fluidspurification@oildri.com

17 OFI – JULY/AUGUST 2017 www.ofimagazine.com

Buckley.indd 2

18/07/2017 09:04

OILSEED S

The canola industry of South Africa is still trying to get air under its wings. But experts believe that with the right development decisions it may soon be soaring. Ile Kauppila writes

C

anola, as a strain of rapeseed plant, is a relative newcomer in the oilseed scene, at least when compared to some seeds that have been cultivated for thousands of years. It was developed in 1970s at the University of Manitoba in Canada through conventional plant breeding. Since then, canola has managed to build a healthy place in the oilseed market for itself, and it has become one of the most widely used oils in industrialised countries.

In the USA, for example, consumption has grown from 226,800 tonnes in the late 1980s to more than 2.25M tonnes in 2015, according to USDA statistics. In short, canola has in a short time become a real success story.

The largest producers of canola, based on USDA data from the 2014/2015 season, are the EU at 33% of the global total, Canada at 22% and China at 20%. However, these regions and countries have either a long history of rapeseed cultivation or the monetary means and workforce necessary to have reached such large-scale production in such a short time and, in a field dominated by giants, smaller players often go unnoticed. Even when they reach commendable growth of their own.

One such player in the canola business is South Africa. Canola was first commercially procured in the country only in the early 1990s as a means for wheat farmers to combat weed problems in their fields, Gerhard JH Scholtemeijer, chair of the Protein Research Foundation (PRF) in South Africa, tells Oils & Fats International. “However,” he adds, “as yields grow, more farmers are turning to canola as a cash crop in its own right.”

Humble beginnings The history of canola in South Africa began in the late 1980s, as shrinking profit margins from cereal crops – as a result of low prices and skyrocketing input costs – brought on a need to discover alternative cash crops that could be introduced in the Swartland and Southern Cape regions in the very southern tip of South Africa. Four crops were imported for this purpose, namely canola, linseed, safflower and sunflower, according to the PRF. The crops were tested in various locations for three years from 1990 to 1992, until it was discovered that canola exhibited the most potential. Thus, research emphasis shifted to canola cultivars. European and Canadian varieties were tested initially, but further research revealed that the highest yields were obtained from Australian cultivars.

In 1992, 30 producers began to cultivate canola on a commercial scale. A planting area of 400ha yielded approximately a humble 500 tonnes of canola. Nonetheless, this marked the beginning of the South African commercial canola industry and its rapid growth.

Canola – a key Based on seed orders, RFP estimates that only a few years later in 1996 the planted area had increased to 15,000ha, with cultivation in the Southern Cape being promoted by the then newlyfounded Southern Oil Ltd and the establishment of an oil mill in the town of Swellendam, some 200km east from Cape Town. Production did not increase quite so rapidly in Swartland, but the construction of an oil press in Moorreesburg during the 1998/1999 season saw production increase as well.

Success and setbacks From here, the canola industry began to grow. The 17,000ha planted in 1998/1999 more than doubled to 44,000ha by the 2003/2004 season. Total yields increased similarly, going from 21,000 tonnes in 1998 to 40,770 tonnes in 2004.

Trouble, however, reared its head by 2005. In the 2004/2005 season, total yield fell to 32,000 tonnes despite a slightly increased planting area and, in the following seasons, both yields and planted areas

began to shrink.

According to the PRF, the decrease in both acreage and production was caused by multiple factors, with low and fluctuating yields branded as the primary culprit. Indeed, data from the period shows yields ranging from a low of 0.72 tonnes/ ha in 2004/2005 to a high of 1.15 tonnes/ha in 2007/2008. Average yields range from 1 to 1.8 tonnes/ha, although yields as high as 2.5 tonnes/ha have been reported by some producers.

Producers also struggled with pests, such as slugs and isopods, which damaged fields so badly as to warrant complete re-planting. Additionally, South African farmers cultivate canola in crop rotation with other cereal and pasture crops. As such, it cannot be planted on the same land in Swartland more than once in every four-year cycle and, in Southern Cape, more than twice in each 10-year cycle. Such restrictions cause additional pressure on yields.

Nonetheless, despite the difficulties, production has bounced back. By 2013, planted area increased

18 OFI – JULY/AUGUST 2017 www.oilsandfatsinternational.com

SouthAfrica.indd 1

14/07/2017 11:40

OILSEED S

SOURCE: SKYPIXELS

net importer of canola for all of its history. Between 2006 and 2016, the country imported 130.65 tonnes of canola annually, while exporting 15.37 tonnes (see figure 3 on the following page).

Imports remained relatively low until 2015 when they skyrocketed, more than doubling from just below 200 tonnes in 2014 to more than 450 tonnes in 2015. However, taking into account the fluctuating record of South African canola imports, it would not be surprising to see this volume drop just as drastically in 2016, although the decreased production may indicate that the trend will continue.

South African canola exports head mainly to Africa and Europe, with Africa dominating the market except in 2010 when European exports spiked momentarily. South Africa is by far the largest African canola producer, while Europe rules global production, which explains the country’s “minimal” European exports, the DAFF states.

Within Africa, most exports go to countries within the Southern African Development Community (SADC), such as the Democratic Republic of the Congo, Malawi, Mozambique, Zambia and Zimbabwe. The market here is strengthened by both South Africa’s close proximity to the listed countries, the SADC Free Trade Agreement and the fact that South Africa is the only major producer of canola in the SADC. However, in general, the DAFF notes that trade of canola is “very low” in South Africa due to low production levels and lower utilisation level of canola.

More planting area

ey to greatness to 72,000ha, with production reaching a new record of 112,000 tonnes. In 2014, when 95,000ha were planted, the yield unfortunately only grew to 123,000 tonnes, or 1.26 tonnes/ha. This, according to Scholtemeijer, negatively affected canola and, in 2016, hectares dropped to 68,000 with a yield of 105,460 tonnes, or 1.55 tonnes/year (see Figure 1 on the following page).

Current situation However, the industry does not seem discouraged by this latest setback. Scholtemeijer says that PRF has received the latest data from the Crop Estimates Committee of the South African Department of Agriculture, Forestry and Fisheries (DAFF), which indicates that farmers intend to plant 90,000ha in 2017.

“Although the area is less than the 95,000ha of 2014, we are optimistic that with the experience gained over the past few years, the crop should exceed previous records, provided we have at least a

normal year ahead,” Scholtemeijer says.

Despite the severe drought conditions that impacted production levels in 2015, the DAFF notes that the gross value of canola production in South Africa has been on the increase during the past three years. The growth, the ministry says, is attributable to the improved volumes of production alongside “slightly improved” producer prices (see figure 2 on the following page).

Data shows that the canola industry has experienced fluctuations in the producer prices for the past 10 years, which the DAFF attributes to limited production and less supply in the market. In its latest profile on the South African canola market value chain from 2016, DAFF figures show that the closing price of 4,750 rands (appr. US$366)/ tonne in 2015 was up 79% from the 2,660 rands (US$205)/tonne in 2006, and just barely behind the record year of 2013, when the price reached 4,760 rands (US$367)/tonne.

The relatively low levels of local canola production have meant that South Africa has been a

The low levels of production at the moment, however, are not a reason for local producers to fret.

Quite the opposite, higher imports prove that there is demand for the product in the local market and therefore a lucrative opportunity for expansion.

Scholtemeijer – with the rest of the PRF, which has funded most of canola research in South Africa – believes in a better future as well. “We have set a target of 150,000ha with a yield of 1.67 tonnes/ha for the planting season of 2020,” he says. Should this target be reached, it would translate to 250,500 tonnes of produced canola, more than double that of 2016.

It is an ambitious goal, and one way the PRF believes it can be reached is by making use of areas that have not yet been used for canola cultivation.

“Canola has traditionally been planted in the Western Cape Province – which includes Swartland and Southern Cape – with its Mediterranean climate. Our research, however, has indicated that canola can be an economical proposition when planted in the summer rainfall area during winter under irrigation. In the Western Cape it is planted at virtual sea level, whilst in the summer rainfall area tests are being done at an altitude between 1,500m and 2,000m above,” Scholtemeijer explains.

Indeed, a 2013 study ‘Determining the area of arable land suited to canola production in the Western Cape’, commissioned by the PRF, found that approximately 782,000ha of arable land in the Western Cape would be suited for winter crop production. Hot and dry weather conditions proved limiting in some areas, but 743,500ha of land would nonetheless be suitable for canola production.

“An additional 200,000ha of irrigated land in the summer rainfall area could see yields of over four v tonnes/ha,” adds Scholtemeijer.

19 OFI – JULY/AUGUST 2017 www.oilsandfatsinternational.com

SouthAfrica.indd 2

14/07/2017 11:40

OILSEED S

Plans for the future

FIGURE 1: AREA PLANTED TO CANOLA VS PRODUCTION

FIGURE 2: CANOLA PRODUCER PRICES (RAND/TON)

SOURCE: DAFF

FIGURE 4: CANOLA GROSS VALUE OF PRODUCTION (GVP, RAND)

SOURCE: QUANTEC EASY DATA, DAFF

FIGURE 3: VOLUME OF CANOLA IMPORTS AND EXPORTS

SOURCE: DAFF

In addition to increasing the planted area, there are also other plans to advance canola production in South Africa. In its ‘Development plan for canola’, published in 2014, the PRF notes that the possibility of growing canola on dry land and on a large scale in the Eastern Cape and Free State regions was being investigated by various institutions for biodiesel production, and that canola could present “significant advantages” as a rotation crop due to its biofumigation characteristics.

In its plan, the PRF states that cultivar development, including the introduction of new cultivars and building and maintaining the germplasm bank, could bring great advantages to South African producers.

It also recommends the trialling of new cultivation practices, particularly related to the effects of planting dates, plant density and different planting techniques.

The PRF also notes that canola is rather susceptible to weed killers, plant diseases and insect pests. To combat these threats, the foundation suggests the inclusion of genetically modified (GM) seeds into the South African canola base.

According to the PRF, GM canola could contribute to making canola more competitive when compared to other crops. GM canola is being used increasingly in Australia and elsewhere, and PRF quotes the Canola Council of Canada as saying that while the protein fraction of canola is affected by genetic modification, the oil remains the same healthy product as the unmodified oil recommended by the Heart Foundation.

Local producers, however, could be less enthusiastic about GM canola. South Africa’s largest canola producer Southern Oil, for example, prides itself in its commitment to non-GM canola, and requires all of its seeds to be validated for being produced through traditional plant breeding.

In fact, the company claims that all locally-grown South African canola, whether by Southern Oil or other producers, is GM free. How hard they would fight the introduction of GM cultivars remains to be seen.

However, even if the increasing production was ultimately realised through increased planting area, the market is definitely ready for expansion.

Wandile Shilobo, head of economic and agribusiness research at Agbiz, wrote in November 2016 that the rise of the middle class in the early 2000s keeps driving demand for edible oils, particularly canola oil. This view is shared by the PRF’s Scholtemeijer.

“South Africa has a shortage of protein for animal nutrition, as well as a shortage of edible oil,” he says. “The production of soyabeans has increased dramatically over the last 10 years, but in spite of this, we do not foresee that in the medium term a surplus of either canola of soyabeans will be planted in South Africa that will cause overproduction of either edible oil or protein for animal nutrition.”

With overproduction being a distant dream, South Africa is well positioned to substantially grow its canola industry. Canola’s health benefits, combined with its high percentage of oil and highvalue oil cake, could make a positive contribution to South Africa’s growing domestic demand and possibly even lift the country to mingle with the big players of the global canola market. w Ile Kauppila is the assistant editor at Oils & Fats International

SOURCE: DAFF

v

20 OFI – JULY/AUGUST 2017 www.oilsandfatsinternational.com

SouthAfrica.indd 3

14/07/2017 11:40

MORE THAN ENERGY

Services by GekaKonus: Engineering Design Consulting Commissioning After Sales Service

Steam for high quality edible oil production.

Our experience is your advantage.

GekaKonus GmbH · Siemensstraße 10 · D-76344 Eggenstein-Leopoldshafen Tel.: +49 (0) 721 / 9 43 74 -0 · Fax: +49 (0) 7 21/ 9 43 74 - 44 · info@gekakonus.net · www.gekakonus.net

d 1

21 OFI – JULY/AUGUST 2017 www.ofimagazine.com

OILSEED S

Consider the consequences

he European Commission (EC) decided in late 2016 to kickstart its plan to phase out conventional biofuels after 2020.

FEDIOL – representing the European vegetable oil and proteinmeal industry – published a position paper in April questioning the EC’s ability to meet the main objectives it was initially conceived to achieve.

According to FEDIOL, the EC has given little account to the agricultural benefits linked to biofuel production and the worrisome impact their disappearance would have on markets, revenues and jobs. From the announcement of a gradual phaseout of food-based biofuels in the ‘European Strategy for Low-Emission Mobility’ to the proposal on the Renewable Energy Directive (RED) post-2020, the viability of conventional biofuels in the EU’s energy mix is put into question. The RED envisages a drop from 7% to 3.8% in the share of biofuels such as rapeseed biodiesel by 2030, without a minimum requirement.

The phasing-down provisions in the proposed EU legislation, FEDIOL argues, do more than simply raise a red flag. They are essentially signalling to EU producers and investors that first generation biofuels are on their way out the EU energy door.

Indeed, with no foreseen obligations for EU fuel suppliers to incorporate conventional biofuels in the energy mix, the minimum share is likely to go way below 3.8% – probably even leading to a total elimination of conventional biofuels shortly after 2020, FEDIOL says. This raises serious concerns for 220,000 jobs, which could be affected.

amount of vegetable oils.

The response is no, because it would be difficult for rapeseed oil to compete with much cheaper oils on the world market, FEDIOL says. As a consequence, farmers would likely halt rapeseed production with heavy financial and social implications.

“In our assessment, we consider this might happen through a linear phase out between 2020 and 2025,” FEDIOL argues.

There are no economically viable alternatives to rapeseed production, which could lead to one million hectares of land being abandoned each year over five years. Using that area for growing other crops, such as cereals or protein crops instead of rapeseed, would flood the markets, and drive crop prices down across the board, FEDIOL projects.

This would make them no longer profitable for farmers who would likely cease their activities on these lands.

The slowdown or halt in rapeseed production could also lead to huge financial losses and to a domino effect throughout the production chain.

Cutting a total of 16M tonnes of rapeseed crush, as well as 2.7M tonnes of soyabean crush, out of production would cause the closure of almost half of the EU crushing plants, representing around 10,000 direct jobs. This would result in the loss of more than 9.6M tonnes of rapeseed meal and 2.1M tonnes of soyabean meal.

FEDIOL says the cumulative loss in turnover would be in the order of €16.9bn (US$19.2bn) for farmers, €22.5bn (US$25.6bn) for crushers and €11.7bn (US$13.3bn) for compound feed manufacturers. Thereafter, every year the revenue losses would amount to €5.3bn (US$6bn) for farmers and to more than €7.5bn (US$8.5bn) for oilseed crushers, while compound feed manufacturers would face additional import costs of €3.9bn (US$4.4bn) each year.

Consequences of phase-out

Benefits of biodiesel

In the EU, current biodiesel production from rapeseed oil amounts to 6.4M tonnes, according to FEDIOL. In total, vegetable oil consumption for biofuels amounts to 10.4M tonnes. Ceasing biodiesel production raises the question of whether there is an alternative market for such a huge

About 65% of biodiesel production in the EU is dependent on rapeseed – a crop containing about 40% oil and 60% meal. With the increase in biofuels demand, the production of rapeseed has almost doubled, with substantial benefits for the EU’s farming sector, according to FEDIOL.

The EU wants to phase out conventional biofuels but has Brussels considered the cost?

T

Rapeseed has helped the EU cut down on protein imports. The 60% meal produced from rapeseed has a high protein content (34%). The increase in rapeseed production has enhanced the EU’s protein self-sufficiency, FEDIOL argues, helping to patch up the EU’s 20M tonne protein deficiency, based on European Parliament estimates.

The development of other varieties of rapeseed with low levels of glucosinolate – making the rapeseed meal more digestible for animals – has also made it possible to replace some portions of animal feed imports with local produce.

The EU’s food production has also benefited from biofuels production. Unlike what is often assumed, rapeseed oil has not been entirely diverted to serve as feedstock for biodiesel production, says FEDIOL. On the contrary, with a two-fold increase in rapeseed production through its inclusion in crop rotation, biodiesel has had no perceptible impact on sectors producing rapeseed oil for food. The share has actually slightly increased over the last years. There is thus no dichotomy between food and fuel production, says FEDIOL. The EU’s biofuel production ensures that rural areas remain populated. By providing direct and indirect employment, biofuels production keeps tens of thousands of people in rural areas and helps to maintain public services in more remote towns and villages. This is a crucial factor for EU farmers, who cannot benefit from these services elsewhere.

Grown and produced under stringent sustainability requirements, FEDIOL also sees important environmental and agronomical benefits in rapeseed production. Soil coverage with rapeseed over 10 months decreases the leakage of nitrates during winter, and improves the soil’s fertility and workability thanks to the rapeseed’s deep root system. This is significantly helping farmers meet the three-crop requirement, particularly in less fertile areas.

Rapeseed production also favours the growth and yield of other crops. If planted after rapeseed, winter wheat and barley achieve a 10% higher yield potential than they would with other crops, and need less fertilisers (about 0.15 tonnes of ammonium nitrate or €40/ha). Planting rapeseed before other crops also prevents diseases and weeds from spreading, thus reducing the need for crop

22 OFI – JULY/AUGUST 2017 www.oilsandfatsinternational.com

Fediol.indd 1

14/07/2017 11:09

OILSEED S

protection products with an estimated cost at about €50 (US$75)/ha.

Not all oils are the same FEDIOL finds it important to bring some clarity to what it calls a general misconception that the EU could stop importing tropical oils if rapeseed oil were used for food instead of for feedstock for biofuels.

Tropical oils are not directly interchangeable with all other vegetable oils, the association argues.

Palm oil, palm kernel oil or coconut oil have fatty acid profiles that are different from European seed oils as they are used for their special functional characteristics. To serve as a substitute for tropical oils, EU vegetable oils such as rapeseed would need to go through a hardening process in order to give the liquid oil a solid structure.

This process triggers a high amount of trans fatty acids (TFAs), which raise health concerns. In fact, over the last 20 years, palm oil has been used to replace partially hardened fats precisely to get rid of TFAs, FEDIOL claims.

It also argues that biofuels keep land in use. Each year, the amount of arable land slipping away from cultivation increases as it is converted into forests, lost to urbanisation or simply being abandoned, according to FEDIOL. Through continuous supply to food, feed and technical markets, biodiesel production sustains activity on these lands, enabling the three-crop rotation system and ensuring high yield of crucial EU produce such as wheat.

While the above scenario is a possibility, FEDIOL says it is far more likely that farmers respond to policy signals by reducing oilseed production altogether. In this most likely scenario where oilseed production is stopped or replaced, farmers would reduce or replace their production of oilseeds to adapt to the loss of market share. In this case, consequences would arguably be even worse over the assessed period.

Switching to alternative crops such as wheat or protein crops is not a likely option in the absence of market and of revenues comparable to oilseeds, FEDIOL argues. The land used for rapeseed harvesting would therefore more likely be left idle, leading to some 5M ha of abandoned fertile farming land over five years.

In addition to the loss of the 10,000 jobs and millions of tonnes of rapeseed and soyabean crush

– and the related revenues – detailed above, the EU would lose about 65% of its rapeseed meal supply and part of its domestic soyabean meal supply over the five years. This loss would trigger additional imports in the order of 11.7M tonnes of soyabean meal, resulting in overall import costs of €11.7bn (US$13.3bn) and thereafter annual additional import costs of €3.9 billion (US$4.4bn), which would make the EU much more vulnerable to price and supply variations.

Less rapeseed would also mean more cereals in the crop rotation, implying enhanced use of pesticides and fertilisers for an additional cost of €450M (US$512.9M) per year.

This article is based on the paper ‘Implementing the Commission’s proposal on conventional biofuels: the consequences for agriculture and industry’, published by FEDIOL in April.

Phase-out scenarios The EC’s proposal to decrease conventional biofuels will send negative signals to all players involved and trigger a subsequent reaction throughout the production chain, says FEDIOL. With no incorporation obligations for EU fuel suppliers or incentives for EU farmers to continue production, the federation assumes a linear phase-out of conventional biofuels from baseline production volumes to zero between 2020 and 2025.

By ceasing biodiesel production, there would be no alternative market for such an amount of vegetable oils, since it would be difficult for rapeseed oil to compete with much cheaper oils on the world market. Hence, farmers would likely reduce rapeseed production with heavy financial, social and agronomic implications.

In its assessment, FEDIOL foresees two possible scenarios. In what it calls a very unlikely scenario, oilseed production is maintained. Farmers would continue to produce oilseeds despite lower revenues. Crushers – no longer being able to sell the oil into the EU market – would have to compete with cheaper oils on the world market, particularly palm oil.

Releasing massive volumes on the world markets would cause high turbulences on world prices for vegetable oils, with damaging consequences on the economies of other major oil producing countries.

These include smallholders in Asia, Africa and Latin America, in addition to farmers in Europe.

The revenues of European producing and crushing industries would also plummet. Producers and crushers combined could lose between €13.6 and €15.1bn (US$15.5-17.2bn) in turnover over a five-year period, and between €2.7 and €3bn (US$33.4bn) every year thereafter.

23 OFI – JULY/AUGUST 2017 www.oilsandfatsinternational.com

Fediol.indd 2

14/07/2017 11:09

M ARGARIN E & BU TTER

The battle of the spreads As the European Union prepares to reform its Common Agricultural Policy, the margarine industry is voicing concerns that the proposed ruling favours butter. The dairy industry, on the other hand, defends the support it receives. Liz Newmark writes

T

he upcoming reform of the Common Agricultural Policy (CAP), implementing a system of agricultural subsidies and other programmes across the European Union (EU), is stirring up strong emotions in the spreads and dairy industry.

Reformed last time only two years ago, the changes being suggested to the policy include providing monetary aid to sectors suffering from sudden price crashes and new environmental goals. Fuelling the furore on both the vegetable oil and dairy sides of the argument is the fact that it is difficult to satisfy both at once.

On the vegetable oil side, the European Margarine Association (IMACE)’s secretary general Siska Pottie tells Oils & Fats International that the CAP reform should focus on developing competitive

markets and sustainable production within the oils and fats sector. The overhaul, which is now under way, should also promote healthy living across the European Union (EU), says Pottie.

In her initial response to the 2 February launch of a 13-week European Commission public consultation on how to modernise and simplify the CAP, Pottie says that as her association members are “sourcing large amounts of European vegetable oil, IMACE has a strong interest in a competitive, economically viable and healthy agricultural sector.”

However, Pottie stresses that the current CAP, which “should be simplified with fewer market management tools”, is not achieving good results for the margarine sector, “where there is unfair competition between butter and margarine due to the dairy support and milk price interventions”.

The public consultation, launched by EU agriculture and rural development commissioner Phil Hogan, involves an online questionnaire on CAP-related issues, including competitiveness, innovation, direct support and barriers to success.

The commission, also inviting position papers and longer statements, says input will be used to help draft a detailed policy paper (called a ‘communication’) in late November, which will include conclusions on current CAP performance and potential policy options “based on reliable evidence”.

The results will be published online and presented by Hogan at a Brussels conference in July, with formal legislative proposals to follow in spring 2018 and an agreement on the future CAP by the EU Council of Ministers and the European Parliament possibly by mid-2019.

The Commission further emphasised in an accompanying consultation document that the aim of the CAP reform process “is to modernise and simplify the CAP”, with other goals including maximising agriculture’s contribution to EU economic development, notably sustainable development, regardless of the likely size of the EU budget after 2020.

Pottie explains that the margarine sector’s 2016 difficulties highlight dairy’s dependency on public financial support, with IMACE concerned that trade and market distorting measures are still present in the CAP. “The World Trade Organisation [WTO] is clear on this,” she says.

“All domestic support measures considered to distort production and trade fall into the [WTO’s category of] ‘amber box’ [subsidies]”, which in WTO trade talks have been identified as payments that should be reduced.

But Pottie argues that currently “direct dairy support and milk price intervention measures [within the EU] stimulate adverse risk taking and unfair risk pricing” in the sector, adding that “risk assessment and pricing should be left to specialised v

24 OFI – JULY/AUGUST 2017 www.oilsandfatsinternational.com

CAP.indd 1

13/07/2017 15:36

BIODIESEL Options to purify feedstock } Acid Degumming } Fatty Acid Stripping } Nano Neutralisation Options to utilize high FFA feedstocks } Acid Esterification } Glycerolysis } Esterified Product Neutralization

In more than 40 years, Desmet Ballestra has installed over 400 oleochemical and biodiesel plants worldwide

Biodiesel Plant } Oil Drying } Transesterification } Glycerine Separation } Methyl Ester Washing } Methyl Ester Drying } Glycerine Purification } Glycerine Concentration } Methanol Rectification Options to further enhance biodiesel quality } Methyl Ester Prewashing } Methyl Ester Clarification } Methyl Ester Distillation Option to further enhance glycerine quality } Glycerine Distillation

OLEOCHEMICALS Fatty Acid Processing Plant } Fat Splitting } Fatty Acid Distillation } Fatty Acid Fractional Distillation } Fatty acid Hydrogenation } Fatty Acid Dry Fractionation } Sweetwater Treatment } Sweetwater Concentration } Glycerine Distillation Fatty Alcohols (Johnson Matthey Davy Technologies) } Fatty Acids Esterification } Methyl Ester Hydrogenation } Fatty Alcohol Refining } Fatty Alcohol Post Hydrogenation } Fatty Alcohol Fractional Distillation Fatty Acids Methyl Ester Process Plants } Methyl Ester Fractional Distillation } Methyl Ester Hydrogenation

Oleochemicals & Biodiesel

Science behind Technology

M ARGARIN E & BU TTER

PHOTO: ADOBE STOCK

v players and market instruments.” IMACE’s members bear the full cost of operating risk, she claims.

Unfair edge for butter?

European dairy association Eucolait’s secretary general Jukka Likitalo disagrees. He notes that direct payments from the CAP are paid to “producers of all agricultural products, be it animal or plant products,” including oilseed suppliers to the margarine sector. As for the special help that has been offered the dairy sector, he says “public intervention provided a safety net for farmers.”

And, contradicting Pottie’s claims, he tells Oils & Fats International: “The EU public intervention system for butter does not make butter in any way more competitive or cheaper than plantbased alternatives as it simply provides a price floor to the market. In fact, it can act against the price competitiveness of butter as butter prices, which today are sky high, will never fall below the intervention price.”

Pottie, however, criticises proposed support measures that would be retained under a revised CAP to help sectors facing steep price falls as “crisis support”. The knowledge that these can be paid out can influence how food producers operate and not in a good way, she warns. “They reward farmers that ignore market risk during ‘good times’,” Pottie continues. She emphasises that the EU’s financial watchdog, the European Court of Auditors, (CoA, in Luxembourg) has criticised the way that these CAP measures boost farmers’ incomes, which she says can be huge. The CoA has measured EU farm subsidies at €270bn (US$290bn) per year, according to Pottie.

In addition, she says the revised CAP should allow for, and incentivise, innovation towards meeting dietary targets, instead of being biased towards butter, even when “public bodies including the European Food Safety Authority and other food standards agencies increasingly recognise the need to shift from saturated fatty acids to unsaturated fatty acids.”

Pottie argues that well over half the CAP budget is dedicated to meat, dairy and animal food while this is less than 25% of a person’s dietary targets set by the World Health Organization/Food and Agriculture Organisation (WHO/FAO).

For Pottie, a similar trend is evident when considering environmental aims and the CAP. “Agricultural land occupation to produce margarines and raw materials for margarines is about half of that to produce butter, and the carbon footprint of margarine production is about one third. Yet, EU agricultural output is significantly biased towards dairy. Taking into account environmental considerations means rethinking diets and adjusting agricultural production accordingly,” she says.

Finally, while pleased at the chance to contribute to the CAP reform process and that Hogan was focusing on cutting bureaucracy and “ensuring farmers are not left at the mercy of volatile markets”, Pottie says the current evaluation must dare to ask the difficult questions. “Is the European farm system, with its reliance on small farming, equipped to face the environmental and social challenges of the future? Market, environmental and health considerations should go hand in hand,” she concludes, as “only then can we build a competitive,

SUPPORTERS OF LIVESTOCK PRODUCERS SUCH AS DAIRY FARMERS ARGUE THAT THEY PLAY AN ACTIVE ROLE IN FOOD PRODUCTION AND IN ENSURING ENVIRONMENTAL SUSTAINABILITY

economically viable and healthy agricultural sector equipped for the future.”

Also welcoming the Commission’s initiative, European food and drink association FoodDrinkEurope similarly says the CAP must promote competitive and sustainable food production systems. “CAP is of crucial importance for ensuring the security of agricultural raw materials’ supply for the EU food and drink industry,” it says.

The farmers’ view Representing EU farmers, association CopaCogeca, in its preliminary comments on CAP reform sent to Oils & Fats International, also emphasises the importance of a competitive and environmentally, socially and economically sustainable CAP “to stabilise farmers’ incomes and give them the opportunity to invest in new more modern technologies”. It further stresses the need to simplify the CAP, saying less red tape, particularly concerning environmental promotion measures, is key to stimulating innovation in the oil and fats industry.

However, Copa-Cogeca argues that “evolution”, not a “revolution”, of the CAP is required. “We are still getting to grips with the last CAP reform which has only been in place for two years,” says secretary general Pekka Pesonen. “We believe that the CAP, which has so far worked quite well, is very good value for money. It costs less than 1% of total EU public spending, and in return provides sustainable food supplies for 500 million consumers.”

Unlike IMACE, Copa-Cogeca favours keeping direct payments to food producers, but with more focus on measures to help farmers, including those serving and the oil and fats industry, better manage risks. “We need to maintain the current measures to cope with market volatility – direct payments,

market safety nets and risk insurance,” Pesonen tells Oils & Fats International. “But more focus needs to be put on risk management tools like insurance and the development of futures markets.”

Pesonen adds that training and education is essential to help the industry meet the challenge of the digital age. “Access to broadband is also important if farmers are to use new technologies and become more efficient at producing more with less. EU rural development policy also helps all types of farmers invest in new products and techniques, making them more efficient and sustainable and helping them to meet changing consumer demands,” he says. In tandem, he says research and innovation is vital for a competitive and viable agriculture sector which would boost the oil and fats industry. “For example, it is important to have management practices which are more environmentally friendly.”

Outlining reasons for why it is necessary to support livestock producers such as dairy farmers, Pesonen says: “As guardians of the countryside, farmers play an active role in contributing not only to producing food and raising cattle in areas where often no other source of employment exists, but also to ensuring environmental sustainability.”

Consumption of butter for example, is also rising especially in countries like the USA as scientific evidence has shown that natural fats have better health benefits than trans-fatty ones contained in margarine, Pesonen states.

But farmers face increasing challenges like climate change and extreme weather events, which he claims other sectors do not have to deal with.

Pesonen sees the direct payments under the CAP as providing stability and certainty for farmers in the face of these challenges and market volatility, which in turn ensures food security, employment in rural areas and sustainability right across Europe. “We therefore need to maintain the current measures in the future CAP to cope with market volatility – direct payments to farmers, market safety nets and risk insurance,” he adds.

Turning to general environmental challenges, Pesonen says the use of biofuels in transport positively impacts EU agricultural markets, especially the oilseeds sector crucial to the oils and fats industry, and the EU’s domestic supply of protein-rich by-products used in feed. As a result, Copa-Cogeca opposes the commission plans to cut the target for conventional biofuels used in transport by 2030 – a reform that is outside the CAP review – saying “it will prevent the EU from meeting its climate goals and from decarbonising the transport sector.”

Other oils and fats industry associations are also focusing diligently on the review. “The issue is important and we will provide our input to the consultation,” says Nathalie Lecocq, director general of the European federation of the vegetable oil and proteinmeal industry (FEDIOL), whose association is now consulting its members.

UK-based Federation of Oils, Seeds and Fats Associations Ltd (FOSFA)’s CEO Stuart Logan says his organisation will be watching “activity at EU level” and its potential impact on the global market.

In view of negotiations over when and how Britain leaves the EU, Logan adds: “While uncertainty over Brexit is affecting everyone, until we see what starts being pinned to the wall, it is difficult to see what the future will be.” w Liz Newmark is a freelance journalist

26 OFI – JULY/AUGUST 2017 www.oilsandfatsinternational.com

CAP.indd 2

13/07/2017 15:36

Messe München Hall C stand 322

PROVEN FILTRATION SOLUTIONS Ÿ More than 70 years of experience in the Edible Oil Industry Ÿ Original manufacturer of Pressure Leaf filters and elements Ÿ Excellent knowledge base and recognised world-wide in the Edible Oil industry Ÿ Vertical and Horizontal configurations, for Main and Polishing applications Installed base more than 10.000 filters installed world wide Ÿ Compliant with all world-wide common codes

and standards

Ÿ Training, after sales services and process

optimisation

Ÿ On-site commissioning and startup

27 OFI – JULY/AUGUST 2017 www.ofimagazine.com

REN EWABLE M ATERIALS

PHOTO: ADOBE STOCK

Synthesised squalene saving sharks

As opinions and regulations turn against harvesting squalene from sharks, plant-based alternatives are on the rise, writes Charlotte Niemiec

S

qualene is a popular ingredient for use in cosmetics and oil-based health capsules.

The substance is primarily derived from the livers of sharks – hence its name, as it is found in the Squalus genus of shark – but it is also present in the livers of mammals (including human), the stomach oil of some birds and in some plants. Its health-benefiting properties have been celebrated for centuries. For example, shark liver oil was first named in a Chinese compendium of traditional remedies dating back to the 16th century.

Squalane – with an ‘a’ – is a hydrogenated version of squalene. This is the version most commonly used in cosmetics as it has a longer shelf life, is more stable and does not oxidise as quickly. Biotechnology company Amyris Inc notes that in its pure state, squalane is a mobile, colourless, odourless and tasteless hydrocarbon oil with good physical and chemical stability. It has a high boiling point of 210-215°C and significant resistance to chemical oxidation, making the need for preservatives unnecessary.

A number of scientific studies into the benefits of consuming squalene have found it increases heart health, helps treat arthritis, asthma and

psoriasis. It may help wounds heal faster and it has been used in anti-cancer treatments. The American Cancer Society (ACS) says some studies have showed that taking squalene supplements slows the growth of blood vessels in cancerous tumours, particularly those found in the prostate, colon and breast. Additionally, doctors often suggest it as a supplement to alleviate some of the unpleasant side effects of chemotherapy.

Another popular use is in vaccines, as it is believed to enhance the immune system, giving the vaccine an extra boost. Since 1997, it has been added to some influenza vaccines, the World Health Organization (WHO) says. Each dose of the original FLUAD and Chriron flu vaccines contained around 10mg of squalene. Scientists have since been experimenting with adding it to pandemic flu and malaria vaccines.

It is also used in many cosmetics and personal care products, such as bath oils, hair products, eye make-up, make-up foundations, lipstick, suntan and sunscreen products, body powders, nail products, and in cleansing, moisturising and skin care products. It acts as a lubricant on the skin surface, giving the skin a soft, smooth appearance.

Ethical concerns But sourcing the oil has raised a myriad of ethical concerns, particularly among animal rights groups.

A recent research paper on the squalene market notes: “Conventionally, squalene was only obtained from shark liver oil, but over-exploitation of sharks has prompted many regulatory agencies to limit

shark fishing. Environmental agencies are making tremendous efforts [to curb] the activities of shark hunting, as this has caused depletion of some species, for example, the Portuguese shark.” A 2013 Daily Telegraph article states that, every year, six million deep sea sharks are killed as a result of squalene harvesting. Furthermore, it is questionable how much incentive manufacturers have to switch to plant-derived squalene as, the article notes, they are under no obligation to state on product labels when they use shark liver oil in their products.

In 2008, retail giant Unilever announced it was removing shark-derived squalene from its cosmetics brands and would instead select products that used the plant-derived version. Unilever joined a line of cosmetics companies doing the same, including Beiersdorf, LVMH, Henkel, Boots, Clarins, Sisley and La Mer. These companies have either refused to use squalene in the first place, or are committed to phasing it out.

A few years later, actress and supermodel Lily Cole, speaking on behalf of the Environmental Justice Foundation, called on the European Union (EU) to force manufacturers to label products containing shark liver oil. Shortly afterwards, the UK department store Selfridges banned any products containing shark-derived squalene from the beauty hall of its London store.

Synthesising squalene Such campaigns have brought the issue into the public eye. In respond to consumer knowledge and demand, scientists are now looking at alternative

V

29 OFI – JULY/AUGUST 2017 www.oilsandfatsinternational.com

Squalene.indd 1

13/07/2017 15:49

REN EWABLE M ATERIALS

PHOTO: SIMA - ADOBE STOCK

sugarcane’, adds: “Sugar squalene offers high quality and performance comparable to that of shark-derived squalene, but made from a renewable source. With … advanced production process[es], renewable squalene can be implemented into formulations without the challenges of supply and price volatility.”

Some scientists are investigating the potential of tobacco leaves to yield high value squalene, particularly when extracted in conjunction with producing biofuel from the leaves. The research paper, which was published in the International Food and Agribusiness Management Review, says tobacco contains about 2%-4% of squalene on a dry matter basis, but several research institutions aim to achieve as high as a 20% yield content per dry matter. The results of the study show that if the average squalene price remains unchanged over the next 10 years and squalene content does reach 20% per dry matter in five or six years’ time, it would be economically feasible to produce it from tobacco leaves.

A booming market

TOBACCO COULD IN THE FUTURE BE USED AS A SOURCE OF HIGH VALUE SQUALENE V

sources for the ingredient. They began synthesising squalene as far back as the 1970s and, towards the end of the decade, the Japanese company Kuraray successfully produced totally synthetic squalene.

It was of a very high purity, but the large cost to produce it, which was passed on to the buyer, limited its use in mainstream products.

A research paper titled ‘The economic feasibility of tobacco leaves for biofuel production and high value squalene’ examines the history of plantderived squalene. Until the 1980s, its direct recovery was considered uneconomical until several Spanish firms patented methods for extracting and purifying squalene from olive oil processing waste, it says.

Ultimately, the firm Hispano Quimica SA – acquired in 2000 by Cognis and, in turn, by BASF in 2010 – commercialised ‘plant squalene’ or phytosqualene derived from olive oil deodoriser distillate (OODD). This is a concentrated waste product from the final step of the olive oil refining process that contains up to 30% squalene.

Improvements to this technology have subsequently been patented.

Other vegetable oil crops are good contenders.

Squalene has been found in amaranth seed, rice bran, wheat germ, oil palm and olives. As an example, olives contain 0.2-0.5% squalene.

Although the amount is typically less than 0.5%, it is concentrated at 60-75% in the unsaponifiable fraction of the oil.

Squalene is also found in palm oil at as much as 0.8% in palm fatty acid distillate (PFAD) or 0.06-0.1% in crude palm oil (CPO). Olive oil has historically been the primary source of plantderived alternatives, but as the crop is not stable, some researchers suggest sugarcane as a viable alternative. Caroline Hadfield, senior vice president of personal care at Amyris Biotechnologies, says sugarcane comes out on top for its more reliable quality.

“Olives are a more volatile and climatedependent crop [and], therefore, less sustainable than sugarcane,” she says. “Sugarcane squalene is also more pure, higher quality and a better ingredient for the consumer. It is easy to formulate with, readily biodegradable and has a very stable supply.”

A research paper written by Amyris and published in July 2014, ‘Deriving renewable squalene from

Demand for squalene is high. A recent paper by market research company Fractovia estimates that the global squalene market could be worth US$240M by 2022. It attributes this to increasing consumption of cosmetics and personal care products – a trend expected to grow worldwide.

Plant-derived squalene is expected to generate US$130M by 2022 and is now the most prominent source in the overall squalene industry. Rising limitations on shark fishing and scaling has shifted the focus to vegetable sources. While the shark squalene market is still forecast to experience “moderate” gains over the coming years, the synthetic squalene industry is projected to generate demand over 850 tonnes by 2022.

“The industry will significantly expand,” the paper notes, “owing to its application in cosmetics, pharmaceutical and supplement sectors. Cosmetics applications dominate the industry, accounting for 66% of shares in 2014. Its content in products such as skin care and moisturising ranges from 0.1% to 50%. Pharmaceutical applications are anticipated to grow at a rate of 9% compound annual growth rate (CAGR) over the period 2015-2022. Additionally, dietary supplement applications are expected to exceed 1.1 kilotonnes of demand. An increasing disposable income and focus on healthy lifestyles will primarily drive this demand.”

The European squalene market is anticipated to surpass US$110M by 2022. Increasing demand for natural ingredients from cosmetics companies comes from those based largely in France, Germany and the UK. Meanwhile, the US market is projected to register a CAGR of 8.5% over the period 20152022. Furthermore, the Asia Pacific market is experiencing substantial growth. India and China are the leading countries, contributing towards the major share in the regional market.

Finally, the paper notes, the squalene market is consolidated in nature. The main focus of the market players is on delivering high purity products and on overall product development, particularly in pharmaceutical and dietary applications. Notable industry participants include Arbee Fish Oil, Amyris, Kishimoto Special Liver Oil, SeaDragon w Ltd, Nuelis, Sophia and others.

Charlotte Niemiec is a freelance journalist

31 OFI – JULY/AUGUST 2017 www.oilsandfatsinternational.com

Squalene.indd 2

13/07/2017 15:49

SH OW REVIEW

OFI India 2017 report

India accounts for the lion’s share of global palm oil and sunflower oil imports, the OFI India 2017 Business Congress and Exhibition heard recently. The country produces around 7M tonnes/year of edible oils and needs to import some 15M tonnes/year

P

alm oil has the potential to play a major role in addressing food security in India, a country which faces a scarcity of agricultural lands and an increasing population, according to Dr Suresh Motwani, programme head of palm oil and soyabean at Solidaridad South & Southeast Asia.

Dr Motwani was speaking at the OFI India 2017 Business Congress and SOPA Soya Conference held on 19-20 May at the Bombay Convention and Exhibition Centre. The event attracted more than 800 visitors, delegates, speakers and exhibitors and encompassed the congress, an exhibition of suppliers to the oils and fats industry and a Smart Short Course technical programme.

“The government of India has identified a total potential area of 1.95M ha for cultivation of oil palm and, currently, only 0.3M ha is planted.”

Dr Motwani said India’s production of palm oil amounted to only a fraction of the country’s total demand, which now stood at 20-21M tonnes but was rising at 5-5.5%/year, according to Bhavna Shah, India/Sri Lanka country representative for the Malaysian Palm Oil Council (MPOC).

“India is the world’s largest importer of palm oil,” she said. Indonesia was India’s largest supplier, meeting around 70% of its palm oil needs, followed

by Malaysia.

“India is short in meeting its edible oil demand, with 25-26M tonnes of oilseeds producing around 7M tonnes of edible oil,” Shah said. “The deficit of 15M tonnes in demand is met by imports, while our refining capacity is lying idle.” (see Figures 2 & 3, following page).

OFI INDIA 2017 IN MUMBAI FEATURED MORE THAN 40 EXHIBITORS, A BUSINESS CONGRESS (PICTURED ABOVE) AND A SMART SHORT COURSE TECHNICAL PROGRAMME

According to Fadhil Hasan (pictured speaking above), executive director of the Indonesian Palm Oil Association (GAPKI), palm oil accounts for nearly 80% of India’s edible oil imports (see Figure 4, following page).

“Indian palm oil refiners are the major importers for Indonesia, resulting in larger Indian imports of crude palm oil (CPO),” he said.

“The recent increase in refined palm oil (RPO) imports indicates that Indian edible oil sellers are finding the foreign supply of RPO has better price competitiveness compared to locally-produced RPO,” he added. In 2011, India imported less than 1M tonnes of RPO and some 5M tonnes of CPO. In 2016, RPO imports were more than 2M tonnes and CPO imports were around 5M tonnes.

Hasan said total global vegetable oil production in 2017/18 would be around 195M tonnes against 186.1M tonnes in 2016/17.

Indonesia and Malaysia – the world’s major producers of palm oil – would contribute to about 85% of world palm oil production, with countries such as Nigeria, Thailand and Colombia contributing to the other 15%.

“Global palm oil production has expanded at around 4% in the past six years, up from 52.6M tonnes in 2011/2012 to 64.25M tonnes in 2016/2017, on the back of productivity improvements, favourable climate conditions and area expansions, especially

in new palm oil producing countries,” he said.

However, Indonesia’s palm oil production growth was trending down, with production expected to maintain a slow expansion rate of 3%/year in the next decade.

“The country’s moratorium on the issue of licenses to open new plantations, a reduced price incentive, extreme weather patterns, the productivity gap between smallholders and private plantations, and campaigns that tie environmental, health and child labour issues will continue to impede production expansion,” Hasan said.

Declining oil palm seed sales in the past five years further confirmed the low production growth prospect, he added.

In 2012, Indonesia’ annual seed sales totaled 171M seeds, compared with 52M seeds in 2016.

He also forecast the slowing of Malaysian palm oil production growth, with an average annual palm oil production growth rate of 0.7% in 2015-2020 and 1% in 2020-2027, compared with 3.2% in 20052010 and 2.3% in 2010-2015.

“Palm oil production in other producing countries is projected to grow at 2-3% annually from 9.5M tonnes in 2017 to 12.8M tonnes in 2027, which is considered insufficient to compensate for the production slowdown in the two largest producing countries.”

In terms of palm oil consumption, India, v

32 OFI – JULY/AUGUST 2017 www.oilsandfatsinternational.com

OFI India report.indd 1

14/07/2017 11:41

V

I

N

T

E

R

N

A

T

I

O

N

A

L

C

O

N

F

E

R

E

N

GENERAL SPONSOR

C

E

ORGANIZER

September 19, 2017 Hilton, Kyiv, Ukraine

Learn, Trade & Network tes elega es D + 0 ni 20 mpa o C + 150 ries ount C + 0 2

with the Key Market Operators

Black Sea Оil Trade 2017

LEADING EVENT OF THE BLACK SEA OIL&FAT INDUSTRY Registration: www.blackseagrain.net

Сontacts: conference@ukragroconsult.org, +380 (44) 451 46 34, 220 52 42

33 OFI – JULY/AUGUST 2017 www.ofimagazine.com

v

SH OW REVIEW

v Indonesia and the EU were the major consuming countries, followed by China and Malaysia.

“China will experience flat consumption growth due to a slowing in economic growth,” Hasan said.

“Despite various negative campaigns against palm oil, the EU remains the stable export market.”

World palm oil consumption had expanded at a rate of 5.3%/year between 2011/2012 and 2016/2017 but was expected to slow to 3.1%/year between 2015-2025.

In terms of prices, the latest World Bank’s Commodity Markets outlook published in April confirmed a moderate price increase in palm oil prices from US$750/tonne in 2017 to US$900/ tonne in 2027, Hasan said.

FIGURE 1: INDIA DOMESTIC OILSEED PRODUCTION (MILLION TONNES)

Growth in sunflower oil Sergey Feofilov, general director of Ukraine’s UkrAgroConsult, told the congress that India was a very important market for Ukraine’s exports, not only for sunflower oil, but also for wheat, sunflower meal, peas and corn.

India’s share of world sunflower oil imports had grown to around 1.8M tonnes (see Figure 5, opposite page).

Ukraine’s share of sunflower meal exports to India had also grown since 2013/14, rising from some 20% of the market share in 2014/15, to 80% in 2015/16 and a projected 90% in 2016/17.

Feofilov said Ukraine was the world’s largest producer and exporter of sunflower oil, accounting for 33% of world output and 56% of exports.

In global production, the country accounted for 33% of total output, compared with Russia (24%), the EU (19%) and Argentina 7%.

In exports, it accounted for 56% of trade, compared with Russia (19%) and Argentina (7%).

Feofilov also said sunflower oil was underestimated by world market players (see Figure 6, opposite page).

While production of the oil had increased 134% between 2001/2002 to 2015/2016, prices had only gone up 40%.

This compared with an 88% increase in soyabean oil production and a 105% price rise, and a 146% increase in palm oil production with a price rise of 118% during the same period.

In order to promote Ukrainian sunflower oil, the industry and government were promoting it as an organic product and with a new national brand of sunflower oil on the global market, he added.

FIGURE 2: INDIA PRODUCTION AND IMPORTS OF VEGETABLE OILS (MILLION TONNES) 2015/16

2014/15

2013/14

2012/13

2011/12

2010/11

7.20

7.20

8.38

8.03

8.15

8.52

Imports

14.59

14.62

11.82

10.68

10.19

8.67

Total available

21.79

21.82

20.20

18.71

18.34

17.19

66.96%

67.00%

58.51%

57.08%

55.56%

50.44%

Domestic production

Imports as % of total available

Source: Bhavna Shah, MPOC, OFI India 2017 from the SEA of India, COOIT

FIGURE 3: INDIA PROCESSING CAPACITY UTILISATION Number of units

Annual capacity (M tonnes) Capacity utilisation

Oil mills (crushing units)

1,500

36

20-30%

Solvent extraction plants

600

31

30-35%

Vegetable oil refineries

650

24

40-50%

Vanaspati (hydrogenation units)

250

3

25-30%

Source: Bhavna Shah, MPOC, OFI India 2017

FIGURE 4: INDIA IMPORT SCENARIO

Good quality seed needed D N Pathak. executive director of the Soybean Processors Association of India (SOPA), said libraries of reports had been written about India’s low oilseed productivity which, at around 1kg/ha, was less than a third of the world average.

In soyabeans, India produced just over 11.5M tonnes in 2016, against world production of 346M tonnes.

“It is possible to double India’s current average soyabean yield,” Pathak declared.

But in order to so, concerted efforts were needed by all stakeholders, with one single body responsible for monitoring progress.

“Poor availability of good quality seed is the biggest challenge of Indian agriculture, particularly in crops like soyabean, where the seed requirement is high.

Source: Bhavna Shah, MPOC, OFI India 2017

34 OFI – JULY/AUGUST 2017 www.oilsandfatsinternational.com

OFI India report.indd 2

14/07/2017 11:41

SH OW REVIEW

FIGURE 5: INDIA SUNFLOWER OIL IMPORTS (MILLION TONNES)

Source: Sergei Feofilov, UkrAgroConsult, OFI India 2017, from the USDA

FIGURE 6: SUNFLOWER OIL UNDERESTIMATED

Source: Sergei Feofilov, UkrAgroConsult, OFI India 2017

“The entire seed production in the soyabean sector is in the hands of either public sector agencies or hundreds of small one-room, one-man seed companies which work through agents in the field, without any regard to the process or quality. Even a few big private sector companies fall prey to this dubious method because of the way the rules are implemented.”

Pathak said 80% of soyabeans in India came from just seven varieties of soyabean seeds. One variety, which was more than 20 years old, still contributed to about 23% of soyabean production.

“A number of new varieties have been released in the last five years. However, the availability of breeder seed of some varieties is still low.”

Pathak said the private sector should be allowed to produce breeder seeds.

If the private sector was treated on par with public sector seed companies, it would remove distortions caused by subsidies to the public sector. This would encourage the private sector to invest in developing new varieties and also augment the seed supply. Any subsidies to farmers should also focus on yield.

One of India’s unique selling points was that it was the only country in the world that did not grow any GM soyabeans. He said GM soyabean would not be a magic bullet to increase productivity in India as GM seeds were not designed specifically to increase yields, but only to cut pest and disease attack.

“We don’t have that many problem with weeds. But if we can get a variety that works with less or no rain, then why not? But that is not what is available today.”

Total world production G Chandrashekhar, a global agribusiness and commodities specialist, gave an overview of global oils and fats production, which he said was set to grow in 2017/18, with palm, rapeseed and cotton seed oils to see an output jump and strong soya meal demand spurring higher crushing for soyabeans.

He projected total global palm oil production of 67M tonnes for 2017/18 (against 62.9M tonnes in 2016/17), soyabean oil production of 56M tonnes (versus 54.3M tonnes in 2016/17), a rapeseed oil output of 29M tonnes vs 27.9M tonnes in the previous year, sunflower oil production of 18M tonnes in 2017/18 against 17.3M tonnes in 2016/17 and remaining oil production of 25M tonnes against 23.7M tonnes in 2016/17. w The OFI India 2017 presentations are available to download at http://ofievents.com/india/conference/ conference-overview 35 OFI – JULY/AUGUST 2017 www.oilsandfatsinternational.com

OFI India report.indd 3

14/07/2017 11:41

STATISTIC S

EU SUNFLOWER AND RAPESEED OIL PRICES (€/MT)

STATISTICAL NEWS FROM MINTEC Sunflower seed Sunflower seed prices have followed a downward trend in the first half of 2017 due to record global production, which rose 14% y-o-y to 48.9M tonnes in 2016/17. The largest production increases came from Russia, up 16% y-o-y to 11.3M tonnes, and Ukraine, which rose 20% y-o-y to 14.6M tonnes. Production within the EU was also high, up 10% y-o-y at 8.33M tonnes.

Whilst stocks are declining seasonally, they remain relatively high y-o-y from last season’s record harvest, pushing prices down further into Q3. In 2016/17, global sunflower seed supplies rose 14% y-o-y to 52.19M tonnes, with ending stocks up 8% y-o-y at 3.59M tonnes.

Global sunflower seed crushings have been high, rising 15% y-o-y at 43.72M tonnes. This has led to large supplies of sunflower oil and meal, pushing down prices in their respective markets.

Sunflower seed prices have come under further downward pressure due to good outlooks for 2017/18 as a result of good weather conditions. The 2017/18 production is estimated to reach 47.9M tonnes.

EU SUNFLOWER SEED AND RAPESEED PRICES (€/MT)

SUNFLOWER SEED AND RAPESEED PRODUCTION, 2012-17

PRICES OF SELECTED OILS (US$/TONNE) 2015

Mar 17

Apr 17

May 17

Jun 17

Jul 17

Soyabean

747.0

794.0

786.0

797.0

796.9

806.2

Crude Palm

637.0

690.0

635.0

661.0

665.4

637.8

Palm Olein

602.0

671.0

613.0

637.0

642.4

617.0

1,099.0

1,505.0

1,520.0

1,529.0

1,564.3

1,576.4

Rapeseed

773.0

836.0

818.0

796.0

794.4

794.9

Sunflower

846.0

786.0

788.0

801.0

797.6

781.5

Palm Kernel

901.0

1,193.0

1,014.0

1,044.0

1,077.5

1,008.9

Average price

801.0

925.0

882.0

895.0

906.0

889.0

Index

190.0

219.0

209.0

212.0

215.0

211.0

Coconut

Rapeseed Rapeseed prices fell in Q1 of 2017 following a general downward trend in the oilseed and vegetable oil market, led by high global soyabean production and speculation over a bumper palm oil crop. However, prices began to climb in Q2 and Q3 of 2017 due to adverse weather conditions hindering production within Europe and Canada and falling global supplies.

Production recovery for the 2017/18 season is likely to be limited, with opening stocks at four-year lows of 5.82M tonnes. Additionally, global production is only expected to rise by 2% y-o-y, to 64.6M tonnes in 2017/18 from 2016/17’s reduced levels. Alongside this, world supplies are expected to rise by just 1% y-o-y to 70.42M tonnes in 2017/18.

Within the EU, stocks are likely to remain low going into 2017/18 and import needs will remain high at an estimated 4M tonnes. Availability of rapeseed for the EU will therefore depend on Australian and Canadian production in order to make up for its losses.

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 E-mail: sales@mintecglobal.com Website: www.mintecglobal.com

36 OFI – JULY/AUGUST 2017 www.ofimagazine.com

Statistics.indd 1

14/07/2017 11:22

Visit us at OFI Munich 11-15 September 2017 Hall C1 Stand 317

Visit us at OFI Munich September 11 – 15, 2017

Hall C1 Stall 122

Every bean is precious.

Treat it that way.

Bühler’s process technology and associated equipment for Hot Dehulling and Warm Dehulling is setting highest efficiency standards in soybean preparation.

At every stage – heating, popping, cracking, hull separation and subsequent flaking – the machinery works seamlessly together to minimize total cost of ownership and to extract highest amounts of oil from both, freshly harvested and highmoisture soybeans.

Find out more: www.buhlergroup.com/oilseeds Just scan the QR code and find out more about the Bühler process technology.

Innovations for a better world.