It is playing a major role in supplying dietary oils and fats
CRUDE palm oil production in Malaysia keeps increasing over the years, rising from 4.1 million tonnes in 1985 to 18.8 tonnes in 2012. The good news is that Malaysia's production can easily meet its domestic demand for dietary oils and fats market with the excess heading for the international markets. Since 1985, palm oil has become the most consumed oil across the globe.
World palm oil demand is constantly on the rise
The demand for edible oils keeps rising due to the natural changes of demographic economics in terms of population increase, urbanisation proliferation, living standards improvement (growing disposable income) and eating habits. Palm oil, being an essential vegetable oil consumed by millions of households worldwide, is certainly commanding a promising outlook driven by the ever increasing demand profile.
Malaysia a key contributor
Statistics released by the Malaysian Palm Oil Council (MPOC) show that Malaysia is one of the top producers of the highest yielding crop, contributing about 39 per cent of world palm oil production and being the leading exporter (44 per cent of world exports).
The adoption of the Roundtable on Sustainable Palm Oil (RSPO) certification by major plantation companies is definitely presenting a brighter future for the industry as more standard-assurance-certified palm oil products enter the international market. This is further 'fertilised' by the versatility of palm oil through its vast applications in different industries.
Asia-Pacific dominates the market
Presently, Asia-Pacific forms the largest global palm oil market, in terms of production and consumption, driven by the growing population and disposable income across the region. The sheer size of the palm oil market in Asia-Pacific alone is evident by the fact it hosts more than half of the world's population (4.2 billion or 60 per cent of the world's population). The combination of China (1.3 billion) and India (1.2 billion) accounts for 36 per cent of the world's population. Within the same region, the combined population of Indonesia (240 million), Pakistan (180 million), Bangladesh (150 million) and Japan (127 million) constitutes another huge block of market for the palm oil industry. India is the world's largest importer of vegetable oils in which Malaysia's palm oil is a major contender. And palm oil is the most traded vegetable oil in the world, making up 60 per cent of the vegetable oils market.
Emerging markets for palm oil and its products
The Middle East and North Africa (MENA) are two emerging markets for palm oil and its products due to limited vegetable oils production capabilities in the region and the competitive commodity pricing of crude palm oil, in addition to the significant population increase. Countries studied include Algeria, Egypt, Iran, Jordan, Libya, Morocco, Saudi Arabia, Sudan, Syria and Turkey. The Middle East (17 countries) and North Africa (7 countries) are home to about 432 million people. The population growth rate in the Middle East and North Africa is among the highest in the world over the last century. The population of the Middle East and North Africa was estimated at 60 million in the beginning of the 20th century. Population of the region grew from 100 million in 1950 to 380 million in 2000, an additional 280 million in 50 years. The growth rate is 3.7 times more than any other region.
Exploring new possibilities into Europe and the US
The European Palm Oil Conference (EPOC 2013), held on Oct 8 in Paris, gathered key players from the plantation, food, non-food and energy sectors to explore issues, opportunities and challenges pertaining to the palm oil industry. The international conference featured government officials, representatives of trade organisations, corporate executives, manufacturers, researchers, end users, buyers, sellers and industry analysts to explore market dynamics and growth of the palm oil industry and work together to achieve a common goal. Earlier, the 8th Global Oils and Fats Forum, held from Oct 3 to 4 in Florida, discoursed on the worldwide market outlook in the oils and fats industry, realities on sustainability, future expectations, competitive formulations, economic benefits, health and nutrition.
Demand for vegetable oils on the upswing
The demand for vegetable oils is forecast to grow in the 21st century given the increasing global population and per-capita income in developing nations. The total output for vegetable oils is projected to increase by 30 per cent between 2011 and 2020, driven by robust demand for food and industrial uses. Palm oil production by Malaysia and Indonesia combined is projected to increase by 45 per cent, commanding some 68 per cent of the vegetable oils total exports.
The Asia-Pacific region is expected to remain as the largest consumer where China and India make up 50 per cent of the world vegetable oils imports. Both countries are expected to see an import increase of 50 per cent and 35 per cent, respectively, in this decade. And the European Union (EU) will remain the single largest buyer with 42 per cent import increase. It was recently reported in the New Straits Times that Malaysia is all geared to increase its palm oil export to Russia (from 14 per cent to 25 per cent out of Russia's total annual import of vegetable oils) in the near future.
Food industry remains the largest consumer
The food industry is the largest consumer of palm oil. It is a key ingredient in the manufacturing of cooking oil, shortening, margarine, vegetable ghee, non-dairy creamers, ice-cream, chocolates, instant noodles, supplements or vitamins and livestock feed. Palm oil and its derivatives are present in more than half of all processed foods, due to their 'stable' nature at room temperature for a longer shelf life. For inedible products, palm oil is necessary for the production of candles, soap, shower cream, detergent, shampoo and other surfactants (eg wetting agents, emulsifiers, foaming agents, and dispersants); cosmetic, pharmaceutical products; lubricant/ grease.
Oil palm biomass is a raw material in the manufacturing of fibreboard, particleboard, pulp and paper, plastic composites, bio-compost (fertiliser) and biofuel
