edible oils analysis - harvard university

SriLanka’sEdibleOilsExportsSeptember2016

• Animalandvegetablefatsandoilsexportsaccountedforonly.51%ofSriLanka’s$11.1billiontotalexportvaluein2014.• Crudecoconutoildominatesthisproductcategory,representing85.9%ofthesector’s$56.7millionexportvalue.Thebreakdownbelowaccountsfor99.3%ofSriLanka’stotalanimalandvegetablefatsandoilsexports.

KeyproductsinSriLanka’sedibleoilssector

BreakdownofExports:AnimalandVegetableFatsandOilsandtheirCleavageProducts(2014)

KeyProducts(HSCode Rev.92) ExportValue($US) %ofSriLanka’sTotalExports

%ofSriLanka’sAnimalandVegetableFatsandOilsExports

RCA* AnnualGrowthRate(5yr.)

Coconutoil(1513) 48.7M 0.439% 85.9% 12.5 61%

Hydrogenatedoils(1516) 2.26M 0.038% 7.5% 1.92 97%

Stearicacid(1519) 1.29M 0.012% 2.3% 0.22 16%

Margarine(1517) 1.15M 0.010% 2.0% 0.31 -19%

Palmoil(1511) 472k 0.004% 0.8% 0.02 -40%

Fishoil(1504) 465k 0.004% 0.8% 0.41 -6%

*RevealedComparativeAdvantage(RCA)istheshareoftheproductinSriLanka’sexportsdividedbytheshareoftheproduct in theaveragecountry’sexports.Source:DatabyUNCOMTRADE2014

Coconutoilexportersbetween1995and2014 Coconutoilexportersin2014

• AlthoughSriLanka’sexportsofcoconutoilaccountforjust0.83%ofglobalcoconutoilexports($5.9billion),SriLankahasahighrevealedcomparativeadvantageinthisproductanditsexportshavegrownrapidlyfrom$4.7millionin2009to$48.7millionin2014—afactorofmorethan10injust5years.

• Indonesia,MalaysiaandthePhilippineshaveconsistentlydominatedtheindustryfrom1995tothepresent.

Source:DatabyUNCOMTRADE2014;VisualizationsbyTheAtlasofEconomicComplexity(http://atlas.cid.harvard.edu/)

Coconutoilimportersbetween1995and2014 WheredidSriLankaexportcoconutoiltobetween1995and2014?

• 25%ofSriLanka’scoconutoilwasexportedtotheUnitedStatesin2014,butthisaccountedforonly1%ofthetotalcoconutoilthattheUSimported.TheUSimported48%ofitscoconutoilfromthePhilippinesand28%fromIndonesia.

Source:DatabyUNCOMTRADE2014;Visualizations byTheAtlasofEconomicComplexity(http://atlas.cid.harvard.edu/)

Hydrogenatedoilsexportersin2014 WheredidSriLankaexporthydrogenatedoilstoin2014?

• SriLanka’sexportsofhydrogenatedoilshavevariedbyanextraordinaryamountfromyeartoyear,drivenbychangesindemandfromIndia.Overthelastdecade,exportswereashighas$111millionin2007,aslowas$144thousandin2009,andtotaled$4.3millionin2014,whichrepresented0.05%oftheglobalexportvalueofhydrogenatedoils.

• In2014,SriLankaexported87%ofitshydrogenatedoilstoPakistanandKenya,andhadaweakpresenceintheEuropeanmarket,whichconsistentlyaccountsfor30-50%ofallhydrogenatedoilsimports.

Source:DatabyUNCOMTRADE2014;VisualizationbyTheAtlasofEconomicComplexity(http://atlas.cid.harvard.edu/)

WheredidSriLankaexportstearicacidtoin2014? Globalimportersofstearicacidin2014

• SriLanka’sshareofglobalstearicacidexportsisverylowatjust0.015%.• IndonesiaandMalaysiatogetheraccountformorethanhalfofallstearicacidexports.


Margarineexportersin2014 Globalexportersofmargarinebetween1995and2014

• SriLanka’smargarineexportsdroppedfrom$20.6millionin2007to$1.15millionin2014,withthisdropmatchingamajordropindemandfromIndia.Worldexportsgrewfrom$3.45billionto$5.72billionoverthesameperiod,despiteasharpdeclinefrom2008-2009.


• Thepalmoilindustryisthelargestgloballywithintheedibleoilsector,withtotalexportsof$35.2billion(33%ofthesectortotal).IndonesiaandMalaysiaarefarandawaythetopproducers,with48%and36%ofworldexports,respectively,in2014.

• AccordingtoanOECDReviewofAgriculturalPoliciesforIndonesiain2012,theownershipstructureofpalmoilproducersinthatcountrywasasfollows:55%large-scaleprivatecompanies(Indonesian,Malaysian,orlocatedinSingaporeunderChinesecapitalcontrol);35%smallholders;10%state-ownedcompanies.Thetop10companiesinIndonesiaowned67%ofIndonesia’spalmoilplantationsin2010.

WheredidSriLankaexportpalmoiltoin2014? Globalimportersofpalmoilin2014

Sources:OECDReviewofAgriculturalPolicies:Indonesia2012&UNCOMTRADE2014;VisualizationbyTheAtlasofEconomicComplexity(http://atlas.cid.harvard.edu/)

WheredidSriLankaexportfishoilin2014? Globalimportersoffishoilin2014

• SriLanka’sfishoilexportsarelimitedexclusivelytoJapan,eventhoughJapanrepresentsonly3%ofglobalfishoilimports.• Fishoilexportsdroppedfrom$985thousandin2008to$196thousandin2011,andreboundedtoreach$465thousand

in2014.

Sources:OECDReviewofAgriculturalPolicies:Indonesia2012&UNCOMTRADE2014;VisualizationbyTheAtlasofEconomicComplexity(http://atlas.cid.harvard.edu/)

EdibleOilsinSriLanka’sProductSpace

Source:TheAtlasofEconomicComplexity

PrimaryconnectionsintheProductSpace


SriLanka’sefficiencyfrontier,byproduct


PositionofedibleoilsinSriLanka’sefficiencyfrontier,bycommunity

Note:Vegetableproductsisolatedtolocateedibleoils

• SriLankahasarevealedcomparativeadvantageof1.05inthesector,butthecomplexityscoreof-0.66isfairlylow.• However,theopportunitygainmeasureof3isthehighestwithinthevegetableproductscategory,indicatingthatthe

edibleoilssectorcouldbeasteppingstonethatwouldopensomenewdoorstomorecomplexproducts.


Conclusions• At$56.7millionin2014,edibleoilsmakeupasmallshareofSriLanka’soverallexportsandasmall

shareofglobalexportsofedibleoils.However,SriLankamaintainsarevealedcomparativeadvantageinthissector,albeitjustbarely(RCA=1.05).

• CoconutoilisSriLanka’smainexportinthesectorandtheonewiththehighestrevealedcomparativeadvantage.SriLanka’sgrowthincoconutoilexportshasbeenverystrongandithasmuchroomtogrow,includingintheUSmarket.

• Hydrogenatedoil,stearicacid,margarineandpalmoilexportsallfluctuatedramaticallywithdemandfromIndia.SriLankamaintainedarevealedcomparativeadvantageinitsexportsofhydrogenatedoilsin2014withoutexportingtoIndia.SriLankaexportsfishoilonlytoJapanalthoughthereisamuchwiderglobalmarketfortheproduct.SriLankadoesnothaveafootholdinothermajoredibleoils(sunflower,soya-bean,canola,oliveandlinseed).

• Edibleoilsarenon-complexproductsthatarenotnotwell-connectedtootherproducts,butamongvegetableproductsthesectorisarelativelygoodsteppingstoneforcontinueddiversificationforSriLanka.

• Indonesia,MalaysiaandthePhilippinestendtodominateexportsoftheedibleoilsinwhichSriLankahasafoothold.Large-scalemulti-nationalcompaniesappeartoplayaroleintheirproductivity.

Coconutoil,crude

Appendix

Efficiencyfrontiers,withproducthighlighted


Hydrogenatedanimalandvegetablefats,oils


Stearicacid


Margarine,notliquid


Palmoil,crude


Fishoil


edible oils analysis - harvard university

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