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PALM OIL TRADE AWARENESS PROGRAM (POTAP) KUALA LUMPUR, OCTOBER 2014
Malaysian Palm Oil in The Global Oils & Fats Development
BY
Tan Sri Datuk Dr. Yusof Basiron Chief Executive Officer
Malaysian Palm Oil Council
Palm Oil Trade Awareness Program (POTAP)
27 October 2014
PALM OIL TRADE AWARENESS PROGRAM (POTAP) KUALA LUMPUR, OCTOBER 2014
• ABOUT MPOC
• THE MALAYSIAN PALM OIL INDUSTRY
• MALAYSIAN PALM OIL IN THE GLOBAL OILS AND FATS SCENARIO
• CHALLENGES TO THE PALM OIL INDUSTRY
• CONCLUSION
PALM OIL TRADE AWARENESS PROGRAM (POTAP) KUALA LUMPUR, OCTOBER 2014
Promo%ng the market expansion of Malaysian palm oil and its products by enhancing their image, crea%ng be;er acceptance through awareness of various techno-‐economic advantages and environmental sustainability.
MALAYSIAN PALM OIL COUNCIL
PALM OIL TRADE AWARENESS PROGRAM (POTAP) KUALA LUMPUR, OCTOBER 2014 PALM OIL TRADE FAIR & SEMINAR 2014
SHANGHAI CHINA
• To enhance trade opportuni%es in the market place by addressing the latest opportuni%es in the market
• To encourage product diversifica%on using
Malaysian palm oil as the key ingredient, thus gaining a prominent role in new and reformulated products
• To improve understanding of palm oil, enhancing
its applica%on and elucida%ng its numerous strengths and benefits
• To uphold the good name of Malaysian palm oil by
closing the gap between the issues of percep%on, allega%ons and reali%es of palm oil
• To safeguard Malaysian palm oil as the most
dominant in terms of market coverage, nutri%onal benefits, environmental sustainability and commercial success
OBJECTIVES
PALM OIL TRADE AWARENESS PROGRAM (POTAP) KUALA LUMPUR, OCTOBER 2014
MARKETING & MARKET DEVELOPMENT
SCIENCE & ENVIRONMENT
PROMOTIONS COMMUNICATIONS ISSUES MANAGEMENT
PROMOTIONS & BRANDING
MPOC ACTIVITIES
Customers Consumers of Palm Oil Anti Palm Oil Campaigners
PALM OIL TRADE AWARENESS PROGRAM (POTAP) KUALA LUMPUR, OCTOBER 2014
MARKETING & MARKET DEVELOPMENT
SCIENCE & ENVIRONMENT
Seminars and Conferences Palm Oil Industry Leadership Award (PILA) Dinner Dialogues with traders/government officials Consumer Education Programmes Trade Exhibitions Publication/Advertising activities Market missions PRIME/PRIME-INVEST CARES PR activities – Familiarization programs Lobbying Activities Market Studies
PROMOTIONS & BRANDING
MPOC Activities
PALM OIL TRADE AWARENESS PROGRAM (POTAP) KUALA LUMPUR, OCTOBER 2014
MPOC Serves Multiple Stakeholders within the industry
Customers
Other Players
Industry Organisations
Exporters/ Importers
Upstream Producers
Downstream Producers
Plantation companies
FELDA
Govt Schemes
Small - holders
Refiners
Specialty fats producers
Palm-based products manufacturers
Oleochem producers
Palm kernel crushers
POMA
MPOC
MPOA
PORAM MEOMA
MOMG
EMPA
ISP
Unions
NGOs
MAPA
NASH
Investors
Institutional Retail
MPOB Ministry of Plantation Industries & Commodities
Ministry of Agriculture
Government Ministries & Agencies
DOE
MOSTE
PALM OIL TRADE AWARENESS PROGRAM (POTAP) KUALA LUMPUR, OCTOBER 2014
DISTRIBUTION OF THE MALAYSIAN OIL PALM BUSINESS & OWNERSHIP IN 2013
Source : MPOB Total Area : 5.23 million Hectares
PALM OIL TRADE AWARENESS PROGRAM (POTAP) KUALA LUMPUR, OCTOBER 2014
DISTRIBUTION OF THE MALAYSIAN OIL PALM BUSINESS & OWNERSHIP IN 2013
Sector
Peninsular Malaysia Sabah Sarawak Malaysia
No Capacity In Operation
(MT) No
Capacity In Operation (MT)
No Capacity In
Operation (MT) No
Capacity In Operation (MT)
FFB Mills 247 56,866,200 124 32,281,200 63 14,943,000 434 104,090,400
PK Crushers 27 4,168,800 13 2,129,200 5 757,200 45 7,055,200
Refineries 35 14,647,200 14 7,734,300 6 2,930,000 55 25,311,500
Oleochemicals 17 2,598,971 17 2,598,97
Source : MPOB
PALM OIL TRADE AWARENESS PROGRAM (POTAP) KUALA LUMPUR, OCTOBER 2014
MALAYSIAN PALM OIL PRODUCTION VS EXPORT (MILLION MT)
-‐
5.00
10.00
15.00
20.00
25.00
2007 2008 2009 2010 2011 2012 2013
Produc%on Export Source : MPOB
PALM OIL TRADE AWARENESS PROGRAM (POTAP) KUALA LUMPUR, OCTOBER 2014
PALM OIL IN THE GLOBAL OILS & FATS MARKET
• Palm oil is the most produced vegetable oil in the world
• In 2004 palm oil pushed soybean oil into second place as the most produced oils & fats in the world
• Palm is generally the most affordable vegetable oil and the lowest cost oil to produce and to refine.
• By reason of its availability and (relatively) low cost, it is an important component of the increasing intake of oils and fats in the developing world
PALM OIL TRADE AWARENESS PROGRAM (POTAP) KUALA LUMPUR, OCTOBER 2014
0
10000
20000
30000
40000
50000
60000
1990 1995 2000 2005 2010 2013
Palm Oil Soybean Oil Rapeseed Oil Sunflower Oil Other Oils
GLOBAL OILS AND FATS PRODUCTION 1990 – 2013 (‘000 MT)
Source : Oil World
PALM OIL TRADE AWARENESS PROGRAM (POTAP) KUALA LUMPUR, OCTOBER 2014
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
50000
1990 1995 2000 2005 2010 2013
Palm Oil Soybean Oil Rapeseed Oil Sunflower Oil Other Oils
GLOBAL OILS AND FATS EXPORT 1990 – 2013 (‘000 MT)
Source : Oil World
PALM OIL TRADE AWARENESS PROGRAM (POTAP) KUALA LUMPUR, OCTOBER 2014
PALM OIL – MAIN SOURCE OF GLOBAL OILS & FATS SUPPLY
Ø The world's current demand for oils and fats is being met by 17 major sources. Production of oils and fats totalled 189.9 million MT in 2013 of which palm oil and soybean production were 56 million tonnes and 43 million MT respectively, thus together accounting for more than 50% of the total
Ø Production of palm oil has grown faster than
that of any other oil or fat and overtook soybean as the most produced oil in 2005
PALM OIL TRADE AWARENESS PROGRAM (POTAP) KUALA LUMPUR, OCTOBER 2014
Source: Oil World
0.00
10.00
20.00
30.00
40.00
50.00
60.00
19
90
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
(M
illion MT)
Palm Oil Soybean Oil Sunflower Oil
Rapeseed Oil Palmkernel Oil Coconut Oil
Average Annual Growth (1990 – 2013) Palm Oil (7.03%) Rapeseed Oil (5.2) Soybean Oil (4.6%) Sunflower Oil (4.4%) Coconut Oil (-‐0.01%) Palm Kernel Oil (6.3%)
AVERAGE ANNUAL GROWTH IN WORLD VEGETABLE OIL PRODUCTION (1990 – 2013)
Source : Oil World
PALM OIL TRADE AWARENESS PROGRAM (POTAP) KUALA LUMPUR, OCTOBER 2014
CHALLENGES TO PALM OIL INDUSTRY
Attacks on palm oil by Environmental NGOs
PALM OIL TRADE AWARENESS PROGRAM (POTAP) KUALA LUMPUR, OCTOBER 2014
NGO POLIVIES INFRINGE SOVEREIGN RIGHT OF A COUNTRY
Ø It fails to consider the scien%fic impact on the development of underdeveloped countries with plen%ful access to land banks
Ø Imposi%on of no deforesta%on policy means denying them of their sovereign right to develop land for agriculture purpose as without agriculture such a state or country will be condemned to stay in perpetual poverty
Ø No interna%onal or UN framework that supports a “No Deforesta%on” policy
Ø There is no permanent grassland or low carbon stock land as forest will be re-‐established over %me
CHALLENGES TO PALM OIL INDUSTRY
PALM OIL TRADE AWARENESS PROGRAM (POTAP) KUALA LUMPUR, OCTOBER 2014
Government Policies Not Favouring Palm Oil
q Certain countries have protectionist measures imposed to protect their oilseeds against competition from imported palm oil
q Lobbies by local associations to impose higher duty
q Active lobbying by NGOs to curtail palm oil use q Proposed labeling laws against palm oil q Continuous ban on refined palm oil or other
palm products
CHALLENGES TO PALM OIL INDUSTRY
PALM OIL TRADE AWARENESS PROGRAM (POTAP) KUALA LUMPUR, OCTOBER 2014
CHALLENGES TO PALM OIL INDUSTRY
With all its posi3ve a5ributes, the oil palm industry is subjected to cer3fica3ons, while other oilseed producers are not required to, or have yet to adopt cer3fica3ons. Efforts to implement the requirement for cer3fica3on must be mandated for all vegetable producing countries, to ensure a level playing field.
TRADE PROTECTIONISM
PALM OIL TRADE AWARENESS PROGRAM (POTAP) KUALA LUMPUR, OCTOBER 2014
Malaysian Palm Oil Wildlife Conserva3on
Fund • Launched in 2006 • USD 6.25 mil (RM 20 mil): 50% from the Malaysian palm oil industry & 50% from the Government
• MPOWCF welcomes donaLons & grants
• MPOC will match third party funding on a 1:1 basis
Corporate Social Responsibilities
PALM OIL TRADE AWARENESS PROGRAM (POTAP) KUALA LUMPUR, OCTOBER 2014
PROGRAMMES A j o i n t e f f o r t between SWD and MPOC to establish the Borneo Elephant Wildlife Sanctuary ( B E W S ) . T h i s i s aimed to protect and conserve the Pygmy Elephant. BEWS will ultimately become a r e s e a r c h a n d reference centre for the Pygmy Elephant.
Active participation and investments from oil palm sector is anticipated to realize this objective for the long term!
PALM OIL TRADE AWARENESS PROGRAM (POTAP) KUALA LUMPUR, OCTOBER 2014
PROGRAMMES Satellite-tracking, Population Dynamics, Ecology
And Conservation Of The Bornean Banteng In Sabah
MPOC’s Collaboration w i t h t h e D a n a u Girang Field Centre of Cardiff University, UK to conserve unique and rare wildlife
PALM OIL TRADE AWARENESS PROGRAM (POTAP) KUALA LUMPUR, OCTOBER 2014
Reach & Touch strategy * Adver3sing /PR/ GR
Reach & Teach strategy * Allows for teaching consumers on a product-‐ educa3onal / print media/ documentaries – long on copy lobby work
Branding strategy * COA & COB/ brand adop3on by suppliers/ forest biobanks
New focus for Europe & USA market
Way Forward
PALM OIL TRADE AWARENESS PROGRAM (POTAP) KUALA LUMPUR, OCTOBER 2014
MALAYSIAPALM SCHEME This scheme provides opportunity to those admitted into scheme to assure their clients that :
q Their palm oil is obtained from oil palms cultivated on legal agricultural land
q Using responsible agricultural and management practices evolved over many decades
q The oil palm is as responsibly cultivated similar to other oil seed crops eg rapeseed and soyabean
PALM OIL TRADE AWARENESS PROGRAM (POTAP) KUALA LUMPUR, OCTOBER 2014
Ø Palm oil will continue to be a major source of oils & fats that is required to meet global food security demands
Ø Oil palm cultivation is shown to require less land
to produce each unit equivalent of edible oil Ø When arable land is limited, it makes sense to
choose palm cultivation over other oilseeds given the higher yields from oil palm
Ø Higher yield projections increasing stepwise
from 4MT/ha to almost 12MT/ha will make palm the oilseed crop of choice in many countries aspiring for greater food (oils) security
CONCLUSION
PALM OIL TRADE AWARENESS PROGRAM (POTAP) KUALA LUMPUR, OCTOBER 2014
Conclusion Ø Palm oil is a major revenue earner for
Malaysia and it can be the same for the developing countries
Ø Palm Oil will assist the developing countries to promote poverty eradication and improve income for small holders and uplift the economy of developing nations
Ø Palm oil production respects and adopts the 3Ps principles of sustainability – People, Planet and Profit.