global oilseed production: trends, drivers, competition · global oilseed production: trends,...

Folkhard Isermeyer

Prof. Dr. Folkhard Isermeyer Thünen Institute, Braunschweig, Germany

Global Oilseed Production: Trends, Drivers, Competition

October 2015

Folkhard Isermeyer

Content

1 Production

• Acreage

• Production

2 Trade and Consumption

• World trade

• Use for food, feed, fuel

3 Commodity Prices

• Food and feed

• Impact of bioenergy

4 Future Competitiveness

• Yield ratios

• Price ratios

10/2015


page 2

Folkhard Isermeyer

World Acreage of Different Crops , 1971/73 – 2011/13

10/2015 Global Oilseed Production: Trends, Drivers, Competition

page 3

Pulses

Mill

ion

ha

0

100

200

300

400

500

600

700

800

0

100

200

300

400

500

600

700

800

Numbers in the legend = percent change of acreage between 1971/73 and 2011/13 Source: FAOSTAT, own calculations

Grains

-15%

-25%

-52%

+53%

+21%

-32%

+1%

Sorghum

Millet

Others

Corn

Rice

Barley

Wheat

71

/73

81

/83

91

/93

01

/03

11

/13

Oil Crops

+164%

+71%

+6%

+426%

Olives

Cocos

Others

Palm Oil

176%

+24%

+285%

+223%

+1%

Sunflowers

Groundnnut

Rapeseed

Soybeans

Cotton

71

/73

81

/83

91

/93

01

/03

11

/13

+30%

-2%

+32%

Beans

Peas

Others

71

/73

81

/83

91

/93

01

/03

11

/13

Roots & Tubers

-4%

+71%

+37%

Potatoes

Maniok

Others

71

/73

81

/83

91

/93

01

/03

11

/13

Sugar Crops

71

/73

81

/83

91

/93

01

/03

11

/13

Vegetable, Fruits, Nuts

+145%

+90%

+277%

Vegetable

Fruits

Nuts

71

/73

81

/83

91

/93

01

/03

11

/13

+136%

-39% Sugarbeet

Sugarcane

Folkhard Isermeyer

0

20

40

120

140

160

180

1963 1973 1983 1993 2003 2013

mill

ion

to

nn

es (

Mt)


page 4

World production of plant oil, 1963 - 2013

Source: FAOSTAT, own calculations.

60

80

100

Other

Maize oil

Olive oil, virgin

Coconut oil (copra)

Cottonseed oil

Groundnut oil

Sunflower oil

Rapeseed oil

Soybean oil

Palm & kernel oil

„G4“: 87 %

Folkhard Isermeyer

Sunflower oil 2013

1993

Rest of the world


page 5

Plant Oil Production, by Country, 1993 and 2013 (only countries with > 1 Mt in 2013)


palm & palm kernel oil 2013

1993

Soybean oil 2013

1993

Canada: Rapeseed oil 2013: 2,8 Mt

EU

Argentina

Ukraine

Russia

Nigeria

India

China

Indonesia

Rapeseed oil 2013

1993

Canada

USA

Brazil

Colombia

Thailand

Malaysia

Folkhard Isermeyer 10/2015 Global Oilseed Production: Trends, Drivers, Competition

page 6

Production of Oil Crops, by country, 1993 and 2013 (only countries with > 1 Mt in 2013)

Source: FAOSTAT, own calculations. Canada rapeseed 2013: 18 Mt

Australia

Bolivia

Brazil

Canada

China

EU

Argentina

India

Indonesia

Malaysia

Paraguay

Russia

UkraineUSA

Rest of the world

Sunflower seed 2013

1993

palm & palm kernel oil 2013

1993

soybeans 2013

1993

rapeseed 2013

1993


page 7

World acreage of major oil crops , 1991 – 2013 (million ha)


mill

ion

ha rapeseed

soybeans

sunflower seed

palm oil

0

20

40

60

80

100

120


page 8

World production of Major Oil Crops, 1991 – 2013 (1991/95 = 100)


0

50

100

150

200

250

300

350

400

450

19

91

/95

= 1

00

rapeseed

soybeans

sunflower seed

palm oil

Folkhard Isermeyer

Content

1 Production

• Acreage

• Production


• World trade


3 Commodity Prices

• Food and feed



• Yield ratios

• Price ratios


page 9


page 10

Seed, Oil, Cake: Net Exports or Net Imports, 2010 (only trade volumes > 1 Mt / country)

palm and palm kernel

soybean

sunflower

Canada rapessed (seed, oil, cake): 12 Mt

rapeseed and mustardseed

net exp cake net exp oil net exp seed

net imp seed net imp oil net imp cake

Source: FAOSTAT, own calculations

Rest of the world

Canada

USA

Mexico

Argentina

Ukraine

EU

Brazil

Japan

India

Iran

Paraguay

China

Vietnam

MalaysiaThailand

Indonesia


page 11

Use of oil crops for food, feed, other purposes (World, Mt, 2001 and 2011)

Source: FAOSTAT, own calculations 0 20 40 60 80 100 120 140 160 180 200

2001 ∆ 01-11

2001 ∆ 01-11

2001 ∆ 01-11

2001 ∆ 01-11

Mt

sunflower

rapeseed


soybean

sunflower

rapeseed


soybean

sunflower

rapeseed


soybean

Food

Feed

other

change from 2001 to 2011 Mio. t %

3 30

6 21

2 30

6 58

15 66

61 48

6 53

2 63

8 183

11 180

2 130

19 136

!

!

!

Folkhard Isermeyer

Content

1 Production

• Acreage

• Production


• World trade


3 Commodity Prices

• Food and feed



• Yield ratios

• Price ratios


page 12


page 13

World Prices of Plant Oil („G4“) and Crude Oil US-$/t, 1990 – 8/2015

End of year-Prices; 2015 end of August Sunflower oil: US Export Price

Soybean oil: Chicago Futures, first contract forward Palm oil: Malaysia Futures, first contract forward

Rapeseed oil: Crude, fob Rotterdam Crude Oil: Dubai fob, conversion: 7.3 bbl/mt

Source: World Bank (Pink Sheet), IMF/quandl.

Rapeseed oil

Soybean oil

Sunflower oil

Palm oil

Crude oil

US-

$/t

0

200

400

600

800

1000

1200

1400

1600

Sunflower > Rapeseed > Soybean > Palm

Crude oil = bottom line


page 14

World Prices of Protein Feed Fish meal, Soybean meal, Rapeseed meal, US-$/t, 1990 – 2014

Source: World Bank (Pink Sheet), Canola Council of Canada, own calculations.

US-

$/t

0

200

400

600

800

1000

1200

1400

1600

1800

2000

fish meal

soybean meal

rapeseed meal

- Fishmeal prices show strongest increase

- Rapeseed meal constantly 2/3 of soybean meal

Folkhard Isermeyer Global Oilseed Production: Trends, Drivers, Competition

page 15

World Population

0

2

4

6

8

10

bn

. peo

ple

19

68

19

70

19

72

19

74

19

76

19

78

19

80

19

82

19

84

19

86

19

88

19

90

19

92

19

94

19

96

19

98

20

00

20

02

20

04

20

06

20

08

20

10

20

12

20

14

20

16

20

18

20

20

20

22

20

24

20

26

20

28

20

30

20

32

20

34

20

36

20

38

20

40

20

42

20

44

20

46

20

48

World Grain Production

0

1

2

3

4

bn

. to

nn

es

19

68

19

70

19

72

19

74

19

76

19

78

19

80

19

82

19

84

19

86

19

88

19

90

19

92

19

94

19

96

19

98

20

00

20

02

20

04

20

06

20

08

20

10

20

12

20

14

20

16

20

18

20

20

20

22

20

24

20

26

20

28

20

30

20

32

20

34

20

36

20

38

20

40

20

42

20

44

20

46

20

48

World Meat Production

0,0

0,1

0,2

0,3

0,4

0,5

bn

. to

nn

es

1968

1970

1972

1974

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

2014

2016

2018

2020

2022

2024

2026

2028

2030

2032

2034

2036

2038

2040

2042

2044

2046

2048

+117 %

+191 %

Source: FAO, own presentation.

10/2015

Outlook for World Population and Food Demand Last 40 years, next 40 years (FAO estimates for grain and meat)

Folkhard Isermeyer

- Has triggered difficult policy debates (world food, ILUC) - Was policy-driven (subsidies, admix-quotas), not market-driven

0

500

1000

1500

2000

2500

1,0

00

bar

rel/

day


page 16

Biofuels: Policy-driven expansion, but slowdown Ethanol and Biodiesel, world production, 2000 - 2014

Biodiesel ROW

Biodiesel Europe

Ethanol ROW

Ethanol Brazil

Ethanol USA

Sources: EIA U.S. Energy Information Administration,

RFA Renewable Fuels Association, USA, OECD, Statistic Technology,

own calculations

2013: Provisional 2014: Forecast

- Biofuel boom between 2000 and 2010

Chances for market-driven bioenergy boom?

Folkhard Isermeyer

Can we expect market-driven expansion of biofuels? (First attempt to quantify a „bushel-barrel-correlation“ for corn)


page 17 10/2015

Global energy consumption: 500 bn. GJ Supplying 1 % via biofuels would need 50 million ha Biofuel segment will remain small compared to total world energy demand Yes, rising prices for fossil fuels would pull all agricultural commodity prices upward

Folkhard Isermeyer

Decline of crude oil extraction is in sight


page 18

Projection

Source: Gehrling, BGR, 2004

Total crude oil

Conventional crude oil

Share of non-conventional crude oil - Very heavy oils - Oil sands - Oil shale

Crude oil supply will reach upper limit rather soon

Theoretically, this could speed up market demand for biofuels …

Folkhard Isermeyer

… but there are other fossil energy sources, with potential impact on agricultural commodity prices

10/2015


page 19

The „fossil fuel story“ (in short):

Crude oil production will soon reach maximum

In 100 years, it will be much lower than today, with world energy consumption still growing

However, coal can fill the gap, ressources are sufficient for 1.000 years, and liquid fuels can be made from coal (break even at 50 $/barrel)

The “fossil fuel era“ may last for a long time, with low prices

But: >50% of GHG emissions caused by fossil fuels; persistence of fossil fuel era climate desaster

A global, legally binding & really effective GHG emission treaty is needed – however, little chances …

Folkhard Isermeyer

Coal: Undesired. Solar: Bright future - but needs time.

10/2015


page 20

Long run: Little chances for biodiesel to find a place in the „eternal fuel portfolio“

Medium run: Only chances, if policy makes protective provisions for biodiesel

„Justifications“: (1) contribute to GHG policy, (2) no electromobility for trucks

But: Hardly possible to achieve better GHG figures than ethanol or soy diesel

Caution with praising biodiesel as „climate-smart fuel“ and neglecting ILUC

Chances for flexible bioenergy policy? (depending on world food prices)

Focus on other values of oilseed (crop rotation; landscape; healthy food)

Should policy enforce biodiesel to bridge the gap?

Folkhard Isermeyer

Content

1 Production

• Acreage

• Production


• World trade


3 Commodity Prices

• Food and feed



• Yield ratios

• Price ratios


page 21

Folkhard Isermeyer

Assessment of Future Competitiveness is complicated Analytical framework: Two dimensions, various determinants

10/2015


page 22

Commodity markets

Competitors:

Food: other vegetable oils

Feed: other protein feedstuffs

Biofuels: Other feedstock

Farm level

Competitors:

Other oil & protein crops

Other cash crops (e.g. grains)

Fodder crops and grassland

Determinants

Price ratio Fatty acid composition Nutritional value of proteins Suitability for processing GHG balance Image of the product … Price ratio Input needed Input prices Yield ratio Crop rotation aspects …

Network for detailled analysis:

Folkhard Isermeyer

Wheat acreage

Wheat yield

Rapeseed acreage

Rapeseed yield


page 23

Wheat vs. Rapeseed vs. Sunflowers: World acreage and average yield, 1963-2013

0

100

200

300

400

500

600

1963/65 = 100

Source: FAOSTAT, own calculations

Sunflower seed acreage

Sunflower seed yield


page 24

Yields, major oil plants World average, dt/ha


dt/

ha

0

5

10

15

20

25

30

35

rapeseed

soybeans

sunflower seed

palm oil


page 25

Development of yields, major oil plants world average, 1991/95 = 100


19

91

/95

= 1

00

0

20

40

60

80

100

120

140

160

180

rapeseed

soybeans

sunflower seed

palm oil

Folkhard Isermeyer

Development of rapeseed and soybean yields Top 5 producers and world average, since 1991


page 26

Rapeseed yields

Ø 2009/13

growth since

1991/95

dt/ha dt/ha %

Canada 20 7 54

China 19 6 42

India 12 3 36

Germany 38 9 30

France 34 5 15

Ø Top 5 19 6 48

Ø Top 10 19 5 43

Ø World 19 6 41

Soybean yields

Ø 2009/13

growth since

1991/95

dt/ha dt/ha %

USA 29 4 17

Brazil 29 8 41

Argentina 24 3 14

China 18 2 12

India 12 2 23

Ø Top 5 25 4 20

Ø Top 10 25 4 19

Ø World 24 4 20


Sunflower yields

Ø 2009/13

growth since

1991/95

dt/ha dt/ha %

Ukraine 17 5 41

Russia 13 3 31

Argentina 17 0 3

China 24 7 39

Romania 16 4 29

Ø Top 5 18 4 28

Ø Top 10 16 3 28

Ø World 15 3 25


page 27

Price ratio between oil and meal soybeans and rapeseed, 1990 – 2014

Source: World Bank (Pink Sheet), Canola Council of Canada, own calculations.

0

1.0

2.0

3.0

4.0

5.0

6.0

soybeans

rapeseed

Price ratio oil/meal

- Rapeseed oil price > soy oil price, but rapeseed meal is far behind

?

- Soy meal boom soy oil = by-product pressure on oil price

Focus on rapeseed meal? (breeding; segmentation of markets)

Folkhard Isermeyer

Summary

10/2015


page 28

Production: Strong expansion: (1) palm, (2) soy & rapeseed, (3) sunflower

Trade: Soy and palm dominating; only Canada with significant rapeseed export

Use: Strong growth in bioenergy; rapeseed particularly poor in food segment

Prices: All agricultural commodities showed strong price increase after 2006

Price Outlook: Strong food & feed demand; new risks through low fossil fuel price

Biodiesel: Market-driven expansion unlikely; not easy to relaunch policy support

Competitiveness: Positive; EU-rapeseed could enter foreign markets, if necessary

Yield Development: Palm oil > rapeseed > soybeans > sunflower seed

Price Ratio: Market signals might suggest to focus more on protein than on fat


page 29

Thank you very much for your attention!

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