global price outlook for palm & lauric oils and impacts ... · 7 march 2018 ista mielke gmbh,...
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7 March 2018 ISTA Mielke GmbH, OIL WORLD, Hamburg - 1
Global Price Outlook for Palm & Lauric Oils and Impacts from the Severe Argentine Drought Losses
Summary of key messages given by Thomas Mielke in his presentation at the Price Outlook Conference (POC) 2018, organized by Bursa Malaysia Derivatives together with CME Group in
Kuala Lumpur on 5-7 March 2018 The current Argentine drought is considered to be one of the worst in the past 50 years and has resulted in substantial damage to oilseed and grain crops as well as to the cattle industry. The drought further intensified in February and cumulative rainfall since December has been at or below 40% of normal in many agricultural areas. Our current Argentine soybean crop estimate is 42 Mn T, down 13 Mn T from a year earlier and down 18 Mn T from three years ago. The area is at a 9-year low and there is risk of additional acreage abandonment. At the moment it is considered possible that actual production turns out at or even below 40 Mn T. Some upward revision in Brazil close to last year’s record 114 Mn T is moderating the Argentine tightness. But production is also down sizably in Uruguay, Paraguay and Bolivia. The world soybean balance has tightened. The South American production failure will create a global production deficit in the world crop season 2017/18. Soybean stocks will decline by at least 2-3 Mn T contrary to earlier expectations of an increase. Soybean prices have appreciated noticeably and temporarily peaked at close to US-$ 10.70 per bushel in early March, up 11% within 9 weeks. Reduced South American supplies are raising the global dependence on US soybeans. It is considered likely that US soybean plantings this spring will be increased to a new high, but there is competition from cotton, spring wheat and, lately, more acreage competition also from corn. With the global dependence on US soybeans increasing for the remainder of 2018, any weather and production problems in the US Midwest would have an extraordinary bullish impact on prices of soybeans and products, primarily from July onward. Vegetable oil prices hardly responded to the Argentine drought losses, mainly because world supplies of palm oil are sufficiently large to offset the global production losses in soya oil caused by the reduced South American soybean production. In fact, soya oil futures declined and in the first week of March were down 5% from early January. Palm oil prices moved generally sideways throughout most of the first 9 weeks of this year, while rapeseed oil and lauric oil prices declined. Another bearish factor for vegetable oils so far in 2018 is to be seen in the drop in fossil fuel prices by 5% since January (expressed in US dollar terms). Soya meal prices are skyrocketing. They jumped by US-$ 100 or 30% on the world market since early January. The current and prospective shortfall in Argentine exports of soya meal can only partly be offset by the rest of the world. Higher prices will prevail until the required demand-
Daily indices from 2 Jan 2018 until 5 March 2018
Jan2 Jan16 Feb2 Feb13 Mar 590
95
100
105
110
115
120
1252 January 2018 = 100
CBOT: Daily Indices of Soybean Complex
Soybeans March 2018
Soya Meal March 2018
Soya Oil March 2018
7 March 2018 ISTA Mielke GmbH, OIL WORLD, Hamburg - 2 rationing is accomplished. The setback in soybean and soya meal prices this week is likely to be temporary. I consider it likely that soybean and meal prices will appreciate further in the next 2-4 weeks, setting new highs. The strong soya meal prices have boosted soybean crush margins. Soya oil has become the by-product and the soya oil share has fallen below 30%. PRICE OUTLOOK In the next 3-5 weeks I consider it likely that palm oil and soya oil prices will trade sideways or slightly higher. Soya oil is likely to widen the price premium over palm oil. Palm oil prices on the world market declined in the first week of March in response to the increase in Indian import duties with effect of March 2. There is going to be a global production deficit in palm oil which is likely to lead to a reduction of world palm oil stocks by 1.4-1.6 Mn T from early Jan until end-March 2018. The reduction of stocks should become price supportive for palm oil in the near term. Such a scenario is also supported by trade estimates about relatively weak palm oil production in Indonesia in early 2018. In April/Sept 2018 I expect some downward potential for palm oil prices. Crude palm oil, fob Indonesia, will probably fall to a low of around US-$ 600 but reach a price average of US-$ 630 for April/Sept 2018 compared with US-$ 650 for the average of Jan/March 2018. Soya oil (fob Argentina) is estimated at an average US-$ 750 for April/Sept 2018, with a price low of an estimated US-$ 710. In Rotterdam I forecast prices of crude palm oil at an average US-$ 655, soya oil $ 845 and rapeseed oil $ 820 for April/Sept 2018. The outlook for rapeseed oil is bearish. The biggest price decline is likely to occur in lauric oils. I consider it likely that the price lows will be reached sometime in the second half of this calendar year. In Rotterdam I expect a price low for palmkernel oil somewhere between US-$ 800 and 830 and for coconut oil a low around US-$ 920-950. World palm oil production is likely to reach 70.8 Mn T in calendar year 2018 compared with 67.9 Mn T in Jan/Dec 2017 and the sharply reduced volume of 59.2 Mn T in 2016. The current OIL WORLD forecast for Indonesia is 38.8 Mn T this year (vs. 36.8 last year) and for Malaysia 20.8 Mn T (vs. 19.9). At the beginning of January 2018 world stocks of palm oil were up 2.2 Mn T from a year ago. At the beginning of 2017, however, palm oil stocks were down steeply by 3.4 Mn T. Despite a slowdown of the production growth world palm oil supplies will still be ample this year according to our current forecasts. For April/Sept 2018 we expect a global production surplus of about 2.0-2.3 Mn T and a corresponding accumulation of stocks. World production of soya oil is set to rise only by 1.1 Mn T from a year earlier in Oct/Sept 2017/18 (against an increase of 2.2 Mn T in 2016/17). But the lower than expected production in soya oil is more than offset by the prospective increase in palm oil. Our price forecasts are based on the assumption that there will be no sizable appreciation of fossil fuel prices. In fact, for Brent and WTI we expect prices to trade generally sideways from now until September 2018. I would not be surprised if there would be some moderate weakening in response to large US production.
We will update our global supply, demand and price prospects for the individual oilseeds, oils & fats and oilmeals in the next OIL WORLD MONTHLY of March 16, 2018. Thomas Mielke (We invite you to contact us at [email protected] in case of questions or if you need any assistance from the OIL WORLD team.)
Thomas Mielke, for details www.oilworld.de POC 2018 in Kuala Lumpur on 7 March 2018
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Thomas Mielke, ISTA Mielke, Oil World,
Global Market Research on Oilseeds, Oils and Meals
Feel free to contact me for assistance at <[email protected]>
Global Supply, Demand and Price Outlook on
Palm & Lauric Oils, Impacts from Arg. Drought
Emphasis also be given on the Chinese Outlook
Presentation at POC 2018 in KL on 7 March 2018
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March 7, 2018
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there somebody to pick me up tomorrow at the airport Price
Governments
Demand
Financial Markets& Funds
Weather
Supply
US Government: Trade policies- - > Escallatingretaliatory actions?
Drought in Argentinaandin the US
Currency values
Indian Government: Higher import taxes
Retaliation?
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01/02 03/04
05/06 07/08
09/1011/12
13/1415/16
17/18F
048
1216202428323640444852566064
0
2
4
6
8
10
12
14
16INDIA: Oilseed Crops and Imports of Oils (Mn T)
Imports of Oils
Crops
On March 1 Indian
import taxes raised
again to 44% for crude
and 54% for ref. PO,
plus 10% surcharge !!
Will this help to reverse
- the negative trend in
domestic production?
- and the widening
supply gap?
Veg oil Imports 17/18:
Total 15.6 (vs 15.4)
Palm oil 9.50 vs. 9.37
Soya oil 3.50 vs. 3.47
Sunfl oil 2.25 vs. 2.14
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Prices of palm oil under
pressure in Dec, falling to
US $ 618 (Dec 22).
Very strong demand has
kept prices well above
those of 2015. World PO
exports 49.4 Mn T (+5.5) in
Jan/Dec 2017.
Price recovered slightly in
Jan and Febr 2018, which
was not unexpected.
Bearish immediate
response at the BMD on
Indian duty hike
The outlook on palm oil
prices in 2018 follow later
Oct Nov Dec Jan Feb Mar Apr May Jun Jly Aug Sep
450
500
550
600
650
700
750
800Monthly averages until February 2018
Monthly Prices Crude Palm Oil, fob Indonesia (US-$/ T)
2015/16
2016/17
2017/18
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94/95 97/98 00/01 03/04 06/07 09/10 13/14 17/18F
11,21,41,61,8
22,22,42,62,8
33,23,4
in Key Countries in Tonnes per Ha
Yields of Soybeans, Rapeseed & Sunfl.seed
Sunfl.seed
Soybeans
Rapeseed
Yield Increases in
the past 15 years:
Soybeans +18%
Rapeseed +26%
Sunflowerseed +53%
(a) Berechnet mit 3-Jahres-Durchschnitten.
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Soybean Field in Argentina on March 1 (Pergamino – North B. Aires)
Severe Drought in Argentina
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19911992
19931994
19951996
19971998
19992000
20012002
20032004
20052006
20072008
20092010
20112012
20132014
20152016
20172018
0
10
20
30
40
50
60ARGENTINA: Soybean Area and Output
Production (Mn T)
Harvested Area (Mn ha)
9-year low
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ARGENTINA: Soybean Area ( Mn ha ), Yields (T/ha) & Production (Mn T)
2018F 2017 2016 2015 2012 2009 Planted area 17.75* 19.10* 20.30* 19.90* 18.67 17.50*
Lost area .75* 1.20* 1.50* .40* 1.09 1.00*
Harvest area 17.00* 17.90* 18.80* 19.50* 17.58 16.50* Yields (T/ha) 2.47* 3.05* 2.89* 3.08* 2.26* 1.91*
Production . . . 42.00* 54.60* 54.40* 60.00* 39.80* 31.50*
ARGENTINA: Soybean Area ( Mn ha ), Yields (T/ha) & Production (Mn T)
2018F 2017 2016 2015 2012 2009 Planted area 17.75* 19.10* 20.30* 19.90* 18.67 17.50*
Lost area .75* 1.20* 1.50* .40* 1.09 1.00*
Harvest area 17.00* 17.90* 18.80* 19.50* 17.58 16.50* Yields (T/ha) 2.47* 3.05* 2.89* 3.08* 2.26* 1.91*
Production . . . 42.00* 54.60* 54.40* 60.00* 39.80* 31.50*
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Precipitation Forecast March 7-13, 2018 – South America
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Precipitation Forecast March 6-22, 2018 – South America
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SOUTH AMERICA : Soybean Production (Mn T)March 2 Dec 22
17/18F 17/18F 16/17 15/16 14/15 Brazil . . . . . 113.00* 109.50* 114.08 95.43 97.18 Argentina. . 42.00* 53.50* 54.60* 54.40* 60.00*Paraguay. . 9.40* 9.75* 10.05* 9.40* 8.40*Bolivia . . . . 2.20* 2.65* 2.70* 2.90* 2.65 Uruguay. . . 2.50* 3.30* 3.40* 2.48* 3.40*Total . . . . . 169.10* 178.70* 184.83 164.61 171.63 Total . . . . . 178.70* 164.61 171.63
SOUTH AMERICA : Soybean Production (Mn T)March 2 Dec 22
17/18F 17/18F 16/17 15/16 14/15 Brazil . . . . . 113.00* 109.50* 114.08 95.43 97.18 Argentina. . 42.00* 53.50* 54.60* 54.40* 60.00*Paraguay. . 9.40* 9.75* 10.05* 9.40* 8.40*Bolivia . . . . 2.20* 2.65* 2.70* 2.90* 2.65 Uruguay. . . 2.50* 3.30* 3.40* 2.48* 3.40*Total . . . . . 169.10* 178.70* 184.83 164.61 171.63 Total . . . . . 178.70* 164.61 171.63
Drop of 15.7 Mn T
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SOYBEANS : World Supply and Demand ( Mn T )17/18F 16/17 15/16 14/15
Opening stocks 94.86 77.90 83.39 62.59
Production 338.64* 347.98 310.88 320.01 U.S.A. . . . . . . . . 119.52 116.92 106.86 106.88 China, P.R. . . . . 16.66 11.71 10.69 12.15 India. . . . . . . . . . 8.00* 10.50* 7.10* 8.50*
Argentina . . . . . . 42.00* 54.60* 54.40* 60.00* Brazil . . . . . . . . . 113.00* 114.08 95.43 97.18
Total supply 433.50* 425.88 394.27 382.60
Crush (Sept/Aug) . 293.00* 285.80 273.78 258.77
Other use . . . . . . . 47.90* 45.22 42.59 40.44
Ending stocks 92.60* 94.86 77.90 83.39 U.S.A. Aug 31 13.60* 8.21 5.35 5.19 Argentina Aug 31 27.00* 30.68* 28.60* 30.96* Brazil Aug 31 27.00* 30.06* 19.96* 24.10*
Stocks/usage 27.2% 28.7% 24.6% 27.9%
SOYBEANS : World Supply and Demand ( Mn T )17/18F 16/17 15/16 14/15
Opening stocks 94.86 77.90 83.39 62.59
Production 338.64* 347.98 310.88 320.01 U.S.A. . . . . . . . . 119.52 116.92 106.86 106.88 China, P.R. . . . . 16.66 11.71 10.69 12.15 India. . . . . . . . . . 8.00* 10.50* 7.10* 8.50*
Argentina . . . . . . 42.00* 54.60* 54.40* 60.00* Brazil . . . . . . . . . 113.00* 114.08 95.43 97.18
Total supply 433.50* 425.88 394.27 382.60
Crush (Sept/Aug) . 293.00* 285.80 273.78 258.77
Other use . . . . . . . 47.90* 45.22 42.59 40.44
Ending stocks 92.60* 94.86 77.90 83.39 U.S.A. Aug 31 13.60* 8.21 5.35 5.19 Argentina Aug 31 27.00* 30.68* 28.60* 30.96* Brazil Aug 31 27.00* 30.06* 19.96* 24.10*
Stocks/usage 27.2% 28.7% 24.6% 27.9%
Total soybean
consumption seen
rising to 341 Mn T
in 17/18.
Ending stocks to
decline by 2-3 Mn.
Global soybean
output in 2017/18
turning out
considerably
below potential.
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1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018F0
10
20
30
40
50
60
70
80
90
100Soybeans: W orld Sto cks as o f end -Au gu st (Mn T )
In 2017/18 there will be
a global soybean
production deficit,
caused by the South
American crop losses.
There are still weather
and productioin risks.
At the moment we
forecast that stocks will
be down by 2-3 Mn T as
of end-Aug 2018.
Swing factors to watch:
1) Farmer selling
2) The crush economics
3)Chinese buying
(timing and size)
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O c t o b e r / S e p t e m b e r95/96
96/9797/98
98/9999/00
00/01 01/02
02/03 03/04
04/05 05/06
06/07 07/08
08/09 09/10
10/11 11/12
12/1313/14
14/1515/16
16/1717/18
0
10
20
30
40
50
60
70
80
90
100China
Rest of world
Imports of Soybeans (Mn T)
99/00 02/03 05/06 08/09 11/12 14/15 17/18F20
30
40
50
60
70
80
90
100
110
120Production (Mn T)Crushings (Mn T)
CHINA: Oilseed Output & Crushings
China imports likely to be boosted to
96 Mn T in 2017/18.
Soybean imports of all countries
other than China jumped from 38.2
Mn T in 2012/13 and may reach 55.2
Mn T this season.
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01/02 02/03
03/04 04/05
05/06 06/07
07/08 08/09
09/10 10/11
11/12 12/13
13/1414/15
15/1616/17
17/18F
0
2
4
6
8
10
12Soya oilPalm oilOthers
CHINA: Imports of 17 Oils & Fats (Mn T)
Oil/Fat Imports 17/18:
Total 9.1 (vs 8.7)
Palm oil 5.5 vs. 5.0
Soya oil 0.5 vs. 0.7
Sunfl oil 0.8 vs. 0.7
Rape oil 0.8 vs. 0.8
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O c t o b e r / S e p t e m b e r
99/00 02/03 05/06 08/09 11/12 14/15 17/18F0
1020
30
40
50
6070
8090
Total Oilmeals
Soya Meal
& Growing Importance of Soya Meal (Mn T)
CHINA: Total Oilmeal ConsumptionFeed usage up 3% in
2016/17
Soya meal consumption
jumped by 11% in
2016/17,
benefitting from the
steep reduction of
imports of DDGS
Further sizeable increase
in Chinese soya meal
demand in 2017/18,
partly due to high prices
of corn in China
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Daily futures from 3 Jan 2017 until 5 March 2018
Ja17 Mar May Jly Sept Nov Ja18 Mar
320340360380400420440460480500520
Dalian CBOT
spot position -- in US-$/T
Daily Soya Meal Futures (Dalian vs. CBOT)
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Daily price ratios from 3 Jan 2017 until 5 March 2018
Ja17 Mar May Jly Sept Nov Ja18 Mar
14001600180020002200240026002800300032003400
Soya meal
Corn
Dalian Exchange -- spot position
Daily Soya Meal & Corn Futures PricesChina increasing
exports of soya meal
in coming months.
In Oct/Sept exports
1.7-2.0 Mn T (vs 1.1)
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75/76 81/82 87/88 93/94 99/00 04/05 10/11 17/18F0
20
40
60
80
100
120
140
160
180Soybean Crop Trend Since 74/75 (Mn T)
U.S.A.
Argentina, B razil & Paraguay
S. American
soybean crop to
plunge in early
2018
(our current
estimate is for a
drop of 16 Mn T)
It could get worse.
Arrival of needed
rains not forecast.
Uncertainties
Increasing
dependence on
new US soya crop
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99/00 01/02 03/04 05/06 07/08 09/10 11/12 13/14 15/16 17/18F10012014016018020022024026028030032034036010 Oilseeds: World Production (Mn T)
Soybeans
Other 9 oilseeds
World soybean
production to drop by
9 Mn T in 2017/18
Soybean production
currently estimated to
be 2-3 Mn T below
projected consump-
tion in 2017/18
Production of 9 other
oilseeds +8 Mn T
Sunfl.seed -1.6
Rapeseed +3.1
Cottonseed +4.2
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Daily indices f rom 2 Jan 2018 until 5 March 2018
Jan2 Jan16 Feb2 Feb13 Mar 590
95
100
105
110
115
120
1252 J anuary 2018 = 100
CBOT: Dai ly Indices o f Soybean Comp lex
Soybeans M arch 2018
Soya Meal March 2018
Soya Oil March 2018
Price Impacts of the Production Losses in Argentina
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Daily prices from 3 Jan 2017 until 5 March 2018
Ja17FebMar AprMay Jun Jly Aug Sept Oct Nov Dec Ja18 Mar320330340350360370380390400410420430440
Soybeans
Soya meal
CBOT: Daily Spot Futures Soybeans & Soya Meal (US-$ /T)
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Soybeans Soya oil 8 Oils Soya meal 8 Meals0
10
20
30
40
50
60World Exports in Jan/Dec 2017
Argentine Exports in Percent of
%
5%
45%
7%
48%
35%
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Prices from 1 Oct 2014 until 1 March 2018Oct Nov Dec Jan Feb Mar Apr May Jun Jly Aug Sep
250
300
350
400
450
500Weekly Prices of Soya Pellets, 47% Arg., fob (US-$/ T)
2014/15
2016/17
2015/16
2017/18
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O c t o b e r / S e p t e m b e r 03/04 05/06 07/08 09/10 11/12 13/14 15/16 17/18F
70
90
110
130
150
170
190
210
230
250
12 Oilmeals: World Production (Mn T)
Soyameal
Other 11 oilmeals
Strong demand increase
for oilmeals from the
livestock industry has
boosted world
production of oilmeals
by 150% in 25 years
Global dependence of
soya meal increasing
Declining supplies
of fish meal and of
sunflower meal in
2017/18
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2009 2012 2018
Jan2 to June 30 Jan 3 to June 29 Jan 2 to March 1-10
-505
1015202530354045505560
Soya meal, fob Arg.Soybeans, US, cif Rott.Soya oil, Arg. fob
Palm oil, fob Mal.
PRICE RESPONSES to Argentine Droughts
%
%
+27%
+52%
+30%
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2009 2012 2018Jan2 to June 30 Jan 3 to June 29 Jan 2 to March 1
-20-15-10-505
1015202530354045505560 Soya meal, f ob Arg.
Soyb ean s, US, cif Rot t.
Soya oil, Arg. f ob
Palm oil, fob Mal.
Min eral oil (Bren t)
PRICE RESPONSES to Argentine Droughts%
%
+27%
+52%
+30%
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Monthly prices from Jan 2016 until Febr 2018Ja16 Mar May Jly Sep Nov Ja17 Mar May Jly Sep Nov Ja18
0
100
200
300
400
500
600
700
800
900
0
150
300
450
600
750
900
1050
1200
1350Monthly Prices of Palm Oil & Crude Mineral Oil (US- $/T)
Palm oil, crude, Rott.
Premium palm oil vs crude oil
Crude mineral oil, Brent
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BIODIESELand HVO: World Production ( Mn T ) J a n u a r y / D e c e m b e r
2017 2016 2015 2014 2013 EU-28 . . . . . 12.90* 12.61 12.41 12.29 10.71 U.S.A. . . . . . 6.10 6.21 4.72 4.80 4.77 Argentina . . . 2.80* 2.66 1.81 2.58 2.00 Brazil . . . . . . 3.75 3.33 3.46 3.00 2.56 Colombia . . . .53* .51 .51 .52 .50 Singapore . . 1.05* .99 .87 .80 .81 Indonesia. . . 2.95* 3.18* 1.22 2.92 2.60 Malaysia . . . .72 .51 .67 .60 .47 Thailand. . . . 1.33* 1.16* 1.14 1.04 .94 Oth. ctries. . . 3.06* 2.95* 2.89* 2.94* 2.65*Total . . . . . . 35.19* 34.13 29.70 31.49 28.01
Change in ( Mn T )
+1.06* 4.43 -1.79 +3.48 +3.33
Source: ISTA Mielke, Feb 2018 – www.oilworld.de
Thomas Mielke, for details www.oilworld.de POC 2018 in Kuala Lumpur on 7 March 2018
Source: ISTA Mielke GmbH, Oil World 16
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March 7, 2018
The Outlook for Palm Oil
Many challenges:
- Lack of replanting (age profile)
- Labour shortage (Malaysia)
- Below potential yields
- Acreage limitations (slow down
in new plantings)
The strong recovery in world
palm oil production in 2017 and
2018 is temporary. From 2019
onward there will be smaller
annual increases in palm oil
production and supplies.
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March 7, 2018
19801982
19841986
19881990
19921994
19961998
20002002
20042006
20082010
20122014
20162018
0
10
20
30
40
50
60
70
80Malaysia
Indonesia
Rest of World
in Major Countries (Mn T)
Palm Oil Production 1980 - 2018
Effects of El Nino
2016:
-6% = -3.7 Mn T
1998:
-5% = -0.8 Mn T
Thomas Mielke, for details www.oilworld.de POC 2018 in Kuala Lumpur on 7 March 2018
Source: ISTA Mielke GmbH, Oil World 17
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March 7, 2018
Supply & Demand of 17 oils & fats:
Current veg oil supplies are large.
World stocks up 2 Mn from last year
Production of vegetable oils and
animal fats increased by 15.2 Mn T
from a year ago in Jan/Dec 2017.
The global situation changed from
deficit in 2016 to surplus in 2017.
Part of the surplus was used to
replenish stocks.
J a n / D e c
17 Oils/Fats: 2017 2016
--------------- ------ ------
Production 221.1 (+15.2) 205.9
Consumption 219.0 (+7.3) 211.7
Surplus/Deficit +2.1 Mn T -5.8
Oct Nov Dec Jan Feb Mar Apr May Jun Jly Aug Sep
450
500
550
600
650
700
750
800Monthly averages until February 2018
Monthly Prices Crude Palm Oil, fob Indonesia (US-$/ T)
2015/16
2016/17
2017/18
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March 7, 2018
Looking on Palm Oil alone:
World palm oil output jumped by 8.6
Mn T from last year in Jan/Dec 2017.
Also the PO situation changed from
deficit in 2016 to surplus in 2017.
But prices did not collapse in 2017.
Part of the surplus was needed to
replenish depleted stocks.
J a n / D e c
Palm Oil (Mn T ) 2017 2016
--------------- ------ ------
Production 67.8 (+8.6) 59.2
Consumption 65.4 (+2.6) 62.8
Surplus/Deficit +2.4 Mn T -3.6
Supply & Demand of 17 oils & fats:
Current veg oil supplies are large.
World stocks up 2 Mn from last year
Production of vegetable oils and
animal fats increased by 15.2 Mn T
from a year ago in Jan/Dec 2017.
The global situation changed from
deficit in 2016 to surplus in 2017.
Part of the surplus was used to
replenish stocks.
J a n / D e c
17 Oils/Fats: 2017 2016
--------------- ------ ------
Production 221.1 (+15.2) 205.9
Consumption 219.0 (+7.3) 211.7
Surplus/Deficit +2.1 Mn T -5.8
Thomas Mielke, for details www.oilworld.de POC 2018 in Kuala Lumpur on 7 March 2018
Source: ISTA Mielke GmbH, Oil World 18
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March 7, 2018
PALM OIL : World Production ( Mn T ) and Yields ( T/ha ) ) P r o d u c t i o n Y i e l d s
2018F 2017 2016 2015 2018F 2017 2016 2015 Indonesia 38.80* 36.80* 32.40* 33.53* 3.87* 3.81* 3.54* 3.89*Malaysia 20.76* 19.92 17.32 19.96 4.02* 3.93* 3.51* 4.18*Thailand 2.45* 2.58* 1.80 2.07 2.92* 3.15* 2.34* 2.76*America 4.80* 4.71* 4.04 3.83 3.17* 3.26* 2.93 2.99
Africa 2.65* 2.55* 2.44 2.38 1.70* 1.68* 1.65 1.66 Oth ctrs. 1.38* 1.31* 1.23 1.17 2.46* 2.38* 2.32 2.28 WORLD 70.84* 67.87* 59.23 62.94 3.60* 3.56* 3.25 3.62
PALM OIL : World Production ( Mn T ) and Yields ( T/ha ) ) P r o d u c t i o n Y i e l d s
2018F 2017 2016 2015 2018F 2017 2016 2015 Indonesia 38.80* 36.80* 32.40* 33.53* 3.87* 3.81* 3.54* 3.89*Malaysia 20.76* 19.92 17.32 19.96 4.02* 3.93* 3.51* 4.18*Thailand 2.45* 2.58* 1.80 2.07 2.92* 3.15* 2.34* 2.76*America 4.80* 4.71* 4.04 3.83 3.17* 3.26* 2.93 2.99
Africa 2.65* 2.55* 2.44 2.38 1.70* 1.68* 1.65 1.66 Oth ctrs. 1.38* 1.31* 1.23 1.17 2.46* 2.38* 2.32 2.28 WORLD 70.84* 67.87* 59.23 62.94 3.60* 3.56* 3.25 3.62
Bullish or bearish?
+3.0 Mn T +8.6 Mn T
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March 7, 2018
PALM OIL : World Production ( Mn T ) and Yields ( T/ha ) )P r o d u c t i o n
2018F 2017 2016 2015 Indonesia 38.80* 36.80* 32.40* 33.53*Malaysia 20.76* 19.92 17.32 19.96 Thailand 2.45* 2.58* 1.80 2.07 America 4.80* 4.71* 4.04 3.83
Africa 2.65* 2.55* 2.44 2.38 Oth ctrs. 1.38* 1.31* 1.23 1.17 WORLD 70.84* 67.87* 59.23 62.94
PALM OIL : World Production ( Mn T ) and Yields ( T/ha ) )P r o d u c t i o n
2018F 2017 2016 2015 Indonesia 38.80* 36.80* 32.40* 33.53*Malaysia 20.76* 19.92 17.32 19.96 Thailand 2.45* 2.58* 1.80 2.07 America 4.80* 4.71* 4.04 3.83
Africa 2.65* 2.55* 2.44 2.38 Oth ctrs. 1.38* 1.31* 1.23 1.17 WORLD 70.84* 67.87* 59.23 62.94
+3.0 Mn T +8.6 Mn T
My expectation is that world palm
oil supplies will be comfortably
large in Jan/Sep 2018:
J a n / Sept
Palm Oil (Mn T ) 2018 2017
-------------------- ------ ------
Opening stocks +2.2 -3.4
Production +2.6 +6.9
World Supplies +4.8 +3.5
Consumption +3.7
Palm oil stocks -1.6 Mn T in Jan/Mar 18
but +2.2 Mn T in Apr/Sept 2018
Thomas Mielke, for details www.oilworld.de POC 2018 in Kuala Lumpur on 7 March 2018
Source: ISTA Mielke GmbH, Oil World 19
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March 7, 2018
What is the Price Outlook ?
The growth in world production is slowing down.
What are the effects on stocks and prices?
O c t / S e p t
Production of 17/18 16/17
--------------- -------- --------
17 oils & fats +7.7 +13.6
Of which:
Palm oil +4.4 +7.6
2 Lauric oils +0.8 +0.5
Soya oil +1.1 +2.2
Rape/canola oil +0.7 -0.3
Sunflower oil -0.6 +2.9
Grd+cotton oils +0.4 +0.6
Other oils/fats +0.9 +0.1
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March 7, 2018
17 OILS & FATS : World Supply & Demand ( Mn T ) Forecast O c t o b e r / S e p t e m b e r
17/18F 16/17 15/16 14/15 13/14Op'g stocks . . . . 27.10 26.71 31.86 30.12 27.58
Production . . . . 225.70* 218.03 204.39 206.03 201.56 Change . . . . . +7.67 +13.64 -1.64 +4.47 +11.47
Imports . . . . . . . . 87.39* 86.23 81.75 81.11 76.58Exports. . . . . . . . 87.61* 86.96 80.99 82.09 76.81
Consumption . . 223.15* 216.91 210.30 203.32 198.79 Change . . . . . +6.24 +6.61 +6.98 +4.53 +9.10
End stocks . . . . 29.42* 27.10 26.71 31.86 30.12
Stocks/usage . . . 13.2% 12.5% 12.7% 15.7% 15.2%
Thomas Mielke, for details www.oilworld.de POC 2018 in Kuala Lumpur on 7 March 2018
Source: ISTA Mielke GmbH, Oil World 20
Your Information Provider - - Independent, Unbiased, Authoritative - - Since 1958
March 7, 2018
89/90
92/93
95/96
98/99
01/02
04/05
07/08
10/11
13/14
16/17
020406080
100120140160180200220240
biofuel food and other
Total Usage in Mn T
17 Oils & Fats : World Consumption
Average demand growth in
past 5 seasons:
Total per year +6.5 Mn T
Biofuel +1.7 Mn T
Food/other +4.8 Mn T
Rapidly Rising World
Demand of Oils & Fats
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March 7, 2018
At the end of the season
2004 2006 2008 2010 2012 2014 2016 2018F8
10
12
14
16
18
20
22
17 oils & fats
10 oilseeds
World Stocks in Percent of Annual Usage (%)
Production deficit of soybeans
in 2017/18 cannot be offset by
other oilseeds.
Extent of the decline in South
America still unclear.
Oilseed stocks still sufficient
but increased dependence on
US soybeans in 2018.
World stocks of oils & fats have
increased, but are not
burdensome
We forecast a recovery of oils &
fats stocks by 2.3-2.5 Mn T in
2017/18
Thomas Mielke, for details www.oilworld.de POC 2018 in Kuala Lumpur on 7 March 2018
Source: ISTA Mielke GmbH, Oil World 21
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March 7, 2018
Prices from 1 Nov 2016 until 5 March 2018Nov Dec Jan Feb Mar Apr May Jun Jly Aug Sep Oct Nov Dec Ja18 Feb
2200
2300
2400
2500
2600
2700
2800
2900
3000
3100
3200
3300Third position in Malaysian Ringgit/T
MALAYSIA: Crude Palm Oil Futures Close
Your Information Provider - - Independent, Unbiased, Authoritative - - Since 1958
March 7, 2018
Prices of palm oil and soy oil likely to
trade sideways or slightly higher in
the next 3-5 weeks.
But a new price weakness likely to
emerge from Apr 2018 onward
Average Apr/Sept 2018:
Crude palmoil (Indon.) 630 (low 600)
Soya oil (fob Arg.) 750 (low 710)
Sunfl oil (fob Ukraine) 780
Crude palm oil (Rott) 655 (low 625)
Dutch soya oil 845
Dutch Rape oil 820
Oct Nov Dec Jan Feb Mar Apr May Jun Jly Aug Sep
450
500
550
600
650
700
750
800Monthly averages until February 2018
Monthly Prices Crude Palm Oil, fob Indonesia (US-$/ T)
2015/16
2016/17
2017/18
Thomas Mielke, for details www.oilworld.de POC 2018 in Kuala Lumpur on 7 March 2018
Source: ISTA Mielke GmbH, Oil World 22
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March 7, 2018
Sizeably rising stocks in 2018. - - > Narrowing of price premiums likely
World Output of the 2 Lauric Oils +0.8 Mn T in 2017/18 (against +0.54 in 16/17)
Prices of Lauric Oils are seen declining in 2018
Coconut Oil : World Supply & Demand (Mn T)O c t o b e r / S e p t e m b e r
17/18F 16/17 15/16 14/15Op'g stocks . .33 .34 .42 .36Production . . 2.75* 2.48 2.59 2.97 Change . . . . +.27 -.11 -.38 -.08Imports . . . . . 1.82* 1.62 1.65 1.95Exports . . . . . 1.81* 1.67 1.64 1.96Disappear.(a) 2.67* 2.44 2.68 2.89 Change . . . . +.23 -.24 -.21 -.23End. stocks . . .42* .33 .34 .42
(a)Residual of the balance.
Coconut Oil : World Supply & Demand (Mn T)O c t o b e r / S e p t e m b e r
17/18F 16/17 15/16 14/15Op'g stocks . .33 .34 .42 .36Production . . 2.75* 2.48 2.59 2.97 Change . . . . +.27 -.11 -.38 -.08Imports . . . . . 1.82* 1.62 1.65 1.95Exports . . . . . 1.81* 1.67 1.64 1.96Disappear.(a) 2.67* 2.44 2.68 2.89 Change . . . . +.23 -.24 -.21 -.23End. stocks . . .42* .33 .34 .42
(a)Residual of the balance.
Palmkernel Oil : World Supply & Demand(Mn T)
O c t o b e r / S e p t e m b e r17/18F 16/17 15/16 14/15
Op'g stocks . .87 .77 1.03 1.00Production . . 7.59* 7.05 6.40 6.79 Change. . . . . +.54 +.65 -.39 +.25Imports . . . . . 3.36* 3.15 3.12 3.31Exports . . . . . 3.38* 3.14 3.12 3.33Disappear.(a) 7.33* 6.97 6.67 6.74 Change. . . . . +.36 +.30 -.07 +.34End. stocks . . 1.11* .87 .77 1.03
Palmkernel Oil : World Supply & Demand(Mn T)
O c t o b e r / S e p t e m b e r17/18F 16/17 15/16 14/15
Op'g stocks . .87 .77 1.03 1.00Production . . 7.59* 7.05 6.40 6.79 Change. . . . . +.54 +.65 -.39 +.25Imports . . . . . 3.36* 3.15 3.12 3.31Exports . . . . . 3.38* 3.14 3.12 3.33Disappear.(a) 7.33* 6.97 6.67 6.74 Change. . . . . +.36 +.30 -.07 +.34End. stocks . . 1.11* .87 .77 1.03
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March 7, 2018
Daily prices from July 2014 until 5 March 2018Jly14 Sep NovJan15 Mar May Jly Sep Nov Ja16 Mar May Jly Sep Nov Ja'17 Mar May Jly Sep DecJa18 Mar
400500600700800900
10001100120013001400150016001700180019002000
Coconut oil,Phil/Indo,cif Rott
Palmkern oil, Mal./Indo., cif Rott.
Palm oil crude, cif N.W. Eur
Daily Prices of 3 Oils in Rotterdam (US-$/T)
Thomas Mielke, for details www.oilworld.de POC 2018 in Kuala Lumpur on 7 March 2018
Source: ISTA Mielke GmbH, Oil World 23
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March 7, 2018
January 2013 until February 2018'13 '14 '15 '16 '17 '18
100250400550700850
10001150130014501600175019002050220023502500
Palm oil, crude cif Rott.
Palmkernel oil, Mal/Indo., cif Rott.
Coconut oil, Phil/Indo. cif Rott.
Monthly Prices of Palm & Lauric Oils (in US-$/T)Price Outlook
Average July/Dec 2018:
Palmkernel oil (Rott) 900
(Price low 830 or 800)
Coconut oil (Rott) avg 1000
(Price low 950 or 920)
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March 7, 2018
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