OFI March/April 2022 by Quartz Business Media

OILS & FATS INTERNATIONAL MAR/APR 2022 ▪ VOL 38 NO 3

ARGENTINA

Strong soya sector

MOSH/ MOAH

The next processing challenge

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Cover March.April 2022.indd 1

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CONTENTS

OILS & FATS INTERNATIONAL

IN THIS ISSUE – MARCH/APRIL 2022 Oleochemicals

FEATURES

NEWS & EVENTS

Argentina – strong soya sector The oilseed sector has risen above a number of challenges to emerge with strong exports of soyabean products

Photo: Adobe Stock

South America

The enzymatic route Enzymatic technology offers a ‘green’ route to producing oleochemicals

Comment

MOSH/MOAH contaminants

Ukraine/Russia News

4 Photo: Adobe Stock

Photo: Adobe Stock

China/Oleochemicals

The next processing challenge While steps can be taken to mitigate the presence of mineral oil contaminants in the oils and fats production chain, only deodorisation can remove them during refining

Growth in personal care China is a significant global producer of oleochemicals, with growth in the personal care market expected to drive development of the industry

War in Ukraine

Plant, Equipment & Technology

Global round-up of projects OFI reports on some of the latest projects, technology and process news and developments around the world

Spring crops face major challenge

News

China shuts plants due to soyabean shortage

Biofuel News

Chevron to buy REG, in joint venture with Bunge

Renewable News

Clariant to sell 50% stake in Scientific Design

Transport News

Vopak builds storage for Rotterdam bio-refinery

Biotech News

Glyphosate production hit by technical issues

Diary of Events

International events listing

International Market Review

Perfect storm drives up oil values

Statistics

36 www.ofimagazine.com

Contents March.April 2022.indd 1

World statistical data OFI – MARCH/APRIL 2022

23/03/2022 10:01:41

EDITOR'S COMMENT

OILS & FATS INTERNATIONAL

VOL 38 NO 3 MARCH/ APRIL 2022

EDITORIAL: Editor: Serena Lim serenalim@quartzltd.com +44 (0)1737 855066 Assistant Editor: Gill Langham gilllangham@quartzltd.com +44 (0)1737 855157 SALES: Sales Manager: Mark Winthrop-Wallace markww@quartzltd.com +44 (0)1737 855114 Sales Consultant: Anita Revis anitarevis@quartzltd.com +44 (0)1737 855068 PRODUCTION: Production Editor: Carol Baird carolbaird@quartzltd.com CORPORATE: Managing Director: Tony Crinion tonycrinion@quartzltd.com +44 (0)1737 855164 SUBSCRIPTIONS: Jack Homewood subscriptions@quartzltd.com +44 (0)1737 855028 Subscriptions, Quartz House, 20 Clarendon Road, Redhill, Surrey RH1 1QX, UK © 2022, Quartz Business Media ISSN 0267-8853 WWW.OFIMAGAZINE.COM

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Comment March.April 2022.indd 1

War in Ukraine It has been four weeks since Russia’s shocking invasion of Ukraine on 24 February. The invasion has forced 3M people to ﬂee the country, internally displaced millions and killed thousands, and has not only impacted the vegetable oil market but wider global food, fertiliser and energy supplies as well.

Russia and Ukraine account for more than 80% of world sunflower oil exports and the closure of Ukraine’s Black Sea ports has left buyers scrambling for alternative palm and soyabean oils. The result has been record-high edible oil prices, with palm oil futures hitting US$1,736.26/tonne on 16 March, having surged by more than 50% this year. As well as the edible oil market, Russia and Ukraine play a key role in global food production and supply. Russia is the world’s largest exporter of wheat and the FAO says restrictions on its exports will have significant food security repercussions, particularly for around 50 countries – many of them low-income nations in northern Africa and Asia – that rely on Russia and Ukraine for some 30% of their wheat supply. Russia is also the world’s top fertiliser exporter, with the war driving up prices for natural gas, a key ingredient for fertiliser manufacturing. Futures prices for urea fertiliser have jumped 32% since the invasion began. Yara – one of the world’s largest fertiliser producers which makes much of its product in Ukraine – is only running at around half its normal capacity. The Russians have also suspended fertiliser exports to the west. Higher fertiliser prices will force farmers to increase their crop prices at harvest or use less of the input. On the ground in Ukraine, massive population displacement has reduced the number of agricultural labourers and workers. The closure of Ukraine’s Black Sea ports and limited railway routes will hamper grain and oilseed shipments. Rising insurance premiums for the Black Sea region will exacerbate already high shipping costs, while it is unclear what the effects of damage to port, storage and processing facilities will be over the longer term. Ukraine’s spring plantings face a particular challenge. Trade sources say that most of the country’s big producers had already booked fertilisers and seed supply. But how will farmers reach areas for planting amid active conflict zones or in Russian-occupied land? How will they tend, apply inputs, harvest and prepare the soil for the next harvest? Corn, sunflower, soyabean and spring rapeseed planting usually starts at the end of April and runs through to June, so there is still some time. It all depend on when the war ends. On 16 March, Ukrainian President Volodymyr Zelensky said peace talks with Russia were beginning to “sound more realistic” and he has admitted that Ukrainians now understand that the Western defensive alliance of Nato will not admit them as a member. Preventing Ukraine from joining Nato has been a major goal of Russian president Vladimir Putin, who was initially aiming to overrun Ukraine and depose its government. Latest reports from peace talks suggest Russia is no longer seeking to overthrow the government and is instead aiming for a neutral Ukraine. Ukraine is demanding a ceasefire and the withdrawal of Russian troops, but also legally binding security guarantees that would give the country future protection. However, there is still the future status of Crimea, which Russia seized in 2014, and the Russian-backed eastern statelets in Luhansk and Donetsk to be resolved. For those of us on the sidelines of this war, we can only pray that the bombardment of dozens of Ukrainian towns and cities will end soon. Having witnessed Putin’s shattering of European peace, it is clear that Western leaders will never view Russia in the same way again and that will affect future geo-political relations going forward. Serena Lim – serenalim@quartzltd.com www.ofimagazine.com

22/03/2022 08:57:54

UKRAINE/RUSSIA NEWS

Spring crops face major challenge The Ukrainian planting season is expected to be heavily impacted by the Russian invasion of the country, with spring crops facing major challenges, AgriCensus reported on 16 March. Although around 80% of farmers had enough supplies of inputs, a shortage of oil – specifically diesel – was a major problem. Another concern was that farmers might not be able to reach land for planting due to conflict zones or areas occupied by the Russian army. With corn, sunflower, soyabean and spring rapeseed planting usually starting at the end of April and running through to June, there was still some time to carry out planting should the war come to an end, AgriCensus wrote. Currently, the

Ukraine would require traders to obtain export licenses for wheat, corn and sunflower oil, among other agricultural commodities, with the country’s state-run railway saying it would move those exports by rail, Reuters reported on 6 March. The country normally exported its grain, vegetable oils and other food products by ship, but the country’s Black Sea ports had been closed because of Russia’s invasion. Ukrainian Railways said it was ready to organise “agricultural products delivery by rail urgently” and that it could transport grain to borders with Romania, Hungary, Slovakia and Poland, from where it could be delivered to ports and logistics hubs of European countries, the Reuters report said. Meanwhile, the government had also banned the export of essential products and limited grain exports following, AgriCensus wrote on 7 March. The measures restrict exports of essential goods such as buckwheat, rye, sugar, millet, oats, salt, live cattle and the meat and other sub-products of of cattle. 4 OFI – MARCH/APRIl 2022

General News March.April 2022.indd 2

area relatively unscathed by the Russian invasion to date – are expected to increase their planted area for this year, AgriCensus reported on 17 March. According to data from the Department of Agro-Industrial Development, sown areas under spring grains, legumes and oilseeds in 2022 will increase by at least 2%, with the total area including winter crops reaching 706,300 ha. Last year’s gross grain and legume harvest in the Lviv region amounted to 1.8M tonnes and 540,000 tonnes of oilseeds. Meanwhile, the government had introduced a measure to help ensure adequate food supplies by exempting key agriculture sector employees from military operations during the harvest period, AgriCensus wrote on 7 March.

EU faces sun oil, rapeseed shortage Bombed and blockaded ports, an export freeze and failure to make sowings for this year's harvest are likely to considerably cut Ukraine sunflower oil supply to the EU in the current crop year, Germany's Union for the Promotion of Oil and Protein Plants (UFOP) said on 10 March. EU imports of sunflower oil during 2020/21 totalled around 1.7M tonnes, of which 1.5M tonnes (around 88%), came from Ukraine, UFOP reported Agrarmarkt Informations-Gesellschaft as saying. In the current 2021/22 crop year, the EU27 imported around 1.27M tonnes of sunflower oil until the end of February, of which some 1.09M tonnes came from Ukraine, a market share of 86%. Ukraine was the top sunflower oil exporter to the EU, followed by Moldova, Bosnia and Herzegovina and the UK. UFOP said if imports from Ukraine were to stop completely and in the medium term, the EU would face a serious supply problem The war in Ukraine would also significantly affect global rapeseed supply, UFOP said on 17 March EU rapeseed imports in 2019/20 season

1.5 1.7

EU sunflower oil imports until 34th week of 2021/22 according to origin countries 2.3

1.8

1.5 1.4

From Ukraine

Ukraine 86%

1.7

1.4 1.6

EU27 sunflower oil imports (million tonnes) 6.5

2 From Ukraine 2.7

0.8

Total

1.9

4.2

1.7

4.3

6.0

EU rapeseed imports until 34th week of 2021/22 according to origin countries

Ukraine 50% 4.8

Ukraine 86%

EU27 rapeseed imports (million tonnes) totalled 6M tonnes, of which around 2.7M tonnes (45%) came from Ukraine. In the past crop year, Ukraine's share of imports fell to 2M tonnes (31%). EU27 rapeseed imports in the current crop year until the end of February 2022 amounted to 3.23M tonnes,

Source: European Commission, Eurostat

IN BRIEF

regions most affected by fighting were the land around Kyiv, Sumy, Donetsk, Luhansk, Kherson, Mykolaiv and Chernihiv, where Russian troops were actively engaged in military operations, the report said. In the worst-case scenario, where all the impacted areas would not be available to complete spring sowing – the total volume could amount to 36% of total corn production, 48% for spring barley, 24% for soyabeans and 44% for sunflower, AgriCensus wrote. While there was no official forecast, local media had reported deputy agriculture minister Taras Vysotskiy as saying that spring sowings would be completed on 50% of planned areas. Meanwhile, farmers in the region around the city of Lviv in western Ukraine – an

with Ukraine supplying the largest share by far (50% or around 1.6M tonnes). If imports from Ukraine were to stop completely and in the long term due to blockaded ports, the supply situation would likely tighten significantly, both within the EU-27 and globally. www.ofimagazine.com

23/03/2022 10:18:58

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UKRAINE/RUSSIA NEWS Global agribusiness giants Cargill and Archer Daniels Midland (ADM) are scaling back their business activities in Russia, World Grain reported on 14 March. Cargill did not provide details on which activities would be scaled back but said on 11 March that it would discontinue investments but carry on operating its food and feed facilities. Cargill had about 2,500 employees in Russia and investments in grain and oilseed processing, animal feed, poultry processing and other businesses. It was also one of the largest non-Russian exporters of Russian wheat, the report said. ADM, which has a smaller footprint in Russia, said on 14 March it would scale down its operations in Russia that were not related to the production and transport of essential food commodities and ingredients. ADM has an arm of its WILD Flavors business in Russia and owns a 50% stake in Aston Foods and Food Ingredients, a sweeteners and starches business. Of the world's four largest agribusinesses, only Louis Dreyfus Co (LDC), had publicly stated it was suspending operations in Russia, World Grain wrote. LDC operates a grain export terminal on the Azov Sea, with annual capacity of about 1M tonnes, and exports 1.5-3M tonnes/year in total from Russia, according to its website. Bunge, which had recently been scaling back its Russian grain trading activities, suspended new exports from Russia on 10 March, but said it would continue its oilseed crushing operations. Cargill, Bunge, ADM and LDC had all suspended operations in Ukraine after the Russian invasion as the war had halted commercial shipping, the World Grain report said. 6 OFI – MARCH/APRIL 2022

General News March.April 2022.indd 3

Edible oil prices to stay high but demand slows Tight edible oil stockpiles and blocked shipments from the Black Sea area due to the war in Ukraine are expected to keep edible oil prices near record highs for the coming months, although global consumption will fall in the latter half of 2022, Reuters reported on 7 March. Malaysian palm oil futures raced to an all-time high of 7,268 ringgit (US$1,736.26)/tonne on 9 March, while soyabean oil jumped to its highest level in 14 years, the report said. Russia's invasion of top sunflower oil exporter Ukraine, dry weather in key soyabean supplier South America and labour shortages in the world's second biggest palm oil producer Malaysia had combined to slash edible oil supplies worldwide, the Price Outlook Conference and Exhibition (POC 2022) in Malaysia heard on 7-9 March. The price surge had already slowed purchases in some key markets. "In many countries like Africa, India and Pakistan, consumers cannot pay these high prices," Oil World executive director Thomas Mielke said, Edible imports by India, the world's top edible oil buyer, were likely to drop to around 13M

tonnes in 2021/22 from 13.49M tonnes a year ago, Dorab Mistry, a director of Indian consumer goods company Godrej International, said. China had lowered its edible oil import for the crop year 2021/22 to 8.53M tonnes, down from February's forecast of 9.3M tonnes, Reuters wrote. But before there was a broader drop in demand, prices were expected to rise further. Palm oil prices could hit a record 8,100 ringgit (US$1,935)/tonne in coming months following a plunge in global edible oil stocks and a decline in export surpluses, LMC International chairman James Fry said. He expected crude palm oil prices in Malaysia to range between 6,600-8,100 ringgit (US$1569-US$1,935)/tonne until July, easing to 6,200-7,000 ringgit (US$1,475-1,665) in the third and fourth quarters when supply builds and demand falls. In Indonesia and Malaysia, total palm oil output in 2022 was likely to rise by around 3M tonnes from last year, the analysts said, far less than needed to offset supply disruptions in South America and the Black Sea.

Fertiliser companies cut production European fertiliser firms are cutting output due to surging natural gas prices following Russia’s invasion of Ukraine, Luxembourg Times quoted from a Bloomberg report. Natural gas was used as a feedstock for nitrogen fertilisers, usually accounting for around 80% of production. With European gas prices currently about 10 times higher than a year ago, fertiliser firms including Yara International and Borealis were cutting ammonia production, which was pushing up farming costs, the 9 March report said. Yara was temporarily curtailing production in Italy and France, it said. The two plants had a combined capacity of 1M tonnes/year of ammonia and 900,000 tonnes/year of urea but output would be reduced to 45% of capacity during the shutdown. Borealis had also reduced its ammonia production, while considering halting output for

Almost every major crop in the world requires fertiliser inputs

“economical reasons”, Luxembourg Times wrote. Hungarian producer Nitrogenmuvex was also temporarily halting output of ammonia. Firms could not continue to take the risk of making fertilisers with present gas prices and putting the product into storage for later sale, a Fertilizers Europe spokesperson said. Meanwhile, the Russian ministry on trade and industry had recommended that its

Photo: Adobe Stock

IN BRIEF

fertiliser producers temporarily halt exports until carriers resumed their work, Southeast AgNet reported on 7 March. Many international shipping firms had suspended cargo shipments to and from Russia to comply with sanctions. Russia produced 50M tonnes/year of fertilisers (13% of the world total) and had already banned ammonium nitrate exports in an announcement on 2 February. www.ofimagazine.com

23/03/2022 10:19:11

NEWS

China shuts plants due to soyabean shortage Crushing plants in China have shut down or are planning to suspend operations due to a soyabean shortage, industry sources were reported as saying by AgriCensus. Bunge halted operations at its crushing plants in Tianjin for 49 days from 14 February to 3 April, while the company’s plants in Nanjing had issued notices to shut down for almost one month from late February to March, the 18 February report said. Shutdowns would also take place at Louis Dreyfus Company (LDC)'s operations in Tianjin, northern China, and Cargill’s

operations in Hebei province. According to a 18 February report by China’s industry consultancy Mysteel, many crushing plants in the southern province of Guangxi also have plans to shut down. AgriCensus wrote that import costs for soyabeans paid by Chinese crushers had climbed as weather concerns over the outcome of South American crops had boosted rising CBOT soyabean futures and spot premiums in Brazil’s market. Chinese buyers have had to slow their rate of soyabean purchases from glob-

al markets, particularly for crops in the current marketing year. Some Chinese soyabean processors had also cancelled orders for around 10 to 12 cargoes of Brazilian soyabeans in February, the report said. Slow importing and pre-Lunar New Year holiday consumption had led to low domestic soyabean stocks, AgriCensus wrote. According to data from China’s National Grain and Oil Information Centre (CNGOIC), soyabean stocks in mid-February totalled 3.95M tonnes, 1.5M tonnes lower than at the same point last year.

Plantations in Malaysia to get foreign workers Oil palm plantations in Malaysia are expecting a new group of workers to arrive from overseas in May and June to harvest oil palm fruits, Today Online reported on 8 March. “With foreign labour coming in, I hope production will increase from 18.1M tonnes (last year) to 20M tonnes,” Plantation Industries minister Zuraida Kamaruddin said. About 80% of Malaysia's plantation workers are migrants, the majority from neighbouring Indonesia, according to the report. Malaysia's oil palm plantations had faced a worsening labour shortage since the start of the COVID-19 pandemic due to border curbs preventing migrant workers from entering the country, Today Online wrote. In September, authorities approved the recruitment of 32,000 migrant workers for palm plantations, with Indonesian migrant workers originally expected to arrive in mid-February, the report said. However, analysts were sceptical that the new workforce could be ready in time. “Even if they (workers) arrive, it will take time for training, as you're not looking necessarily at skilled workers," Julian McGill, the Southeast Asia head at UK consultancy LMC International told Reuters. The shortage of workers had affected production in Malaysia – the world's second largest palm oil producer – adding to global worries over vegetable oil supplies, Today Online wrote. www.ofimagazine.com

General News March.April 2022.indd 4

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23/03/2022 10:19:12

NEWS INDONESIA: Exporters of used cooking oil (UCO) in Indonesia have formed an association to lobby against new regulations requiring domestic sale obligations, Argus Media reported on 25 January. The 13-company association represents 90% of the country’s 25,000-30,000 tonnes/month UCO export capacity, according to newly-elected chairman Setiady Goenawan. Under new regulations introduced in January to ensure domestic edible oil supply at subsidied rates, exporters of UCO, palm olein and crude palm oil (CPO) must submit proof of domestic sales to obtain export licenses. UCO exporters were unsure why UCO had been included in the ruling as they were generally not involved in palm oil production, the report said. ARGENTINA: The International Monetary Fund (IMF) has agreed a deal worth US$44.5bn to help the country deal with surging inflation and currency issues, AgriCensus reports. A 28 January IMF statement said the deal would allow for spending increases on infrastructure, science and technology, but called for a strategy to reduce energy subsidies progressively. Argentina was believed to be close to defaulting on its existing IMF agreements, before the deal.

Indonesia ups levy on palm oil exports to control prices Top global palm oil exporter Indonesia has significantly raised its maximum palm oil export levy in a fresh bid to control domestic cooking oil prices, Reuters reported on 18 March. It also announced a policy U-turn on its move to remove export volume restrictions on palm oil products. Taking immediate effect, the new regulation introduced higher progressive rates when the reference price for palm oil reached at least US$1,050/tonne to a maximum levy of US$375/ tonne, Reuters wrote. Under previous rules, the maximum export levy was US$175/tonne, which was applied when the reference price reached at least US$1,000/tonne. However, the new regulation did not change the levy structure when the reference price was below US$1,000/tonne.

Indonesian exporters are required to pay an export tax on palm oil shipments on top of the export levy. The maximum export tax is currently US$200/tonne, according to the report. The government move was welcomed by industry players, with Indonesia Palm Oil Board deputy chairman Sahat Sinaga saying the levy gave international buyers more predictability. Authorities had been struggling to control the domestic market for cooking oil, made from refined crude palm oil, after prices surged 40% at the start of the year due to high global prices, Reuters wrote. The Indonesian government used proceeds from palm oil levies to fund programmes that included subsidising biodiesel, smallholder replanting and, more recently, subsidies for cooking oil, the report said.

SOPA urges India to build buffer stocks

SOPA says an additional 4M tonnes of mustard seed harvest would provide the country with 1.5M tonnes of additional oil

The Soybean Processors Association of India (SOPA) is urging India to build a buffer stock of edible oils equal to 10% of the country’s demand which can be released in times of shortages, Krishi Jagran reported on 6 March.

Photo: Adobe Stock

IN BRIEF

India is the world’s largest importer of edible oils and Russia’s invasion of Ukraine would lead to a shortfall of around 200,000 tonnes/ month of sunflower oil imports, which could be addressed by increasing soyabean and palm oil imports, SOPA said. “The all-time high mustard crop will somewhat balance the sunflower oil shortage in the next six months,” SOPA executive director DN Pathak said. “The additional 4M tonnes of mustard crop would give roughly 1.5M tonnes of additional mustard oil.” Meanwhile, the government had effectively cut the duty on crude palm oil (CPO) imports from 8.25% to 5.5% in a bid to control cooking oil prices and support domestic processing companies, Live Mint newspaper wrote. Although the basic customs duty on CPO was already nil, the Central Board of Indirect Taxes and Customs (CBIC) also cut the Agriculture Infrastructure Development Cess (AIDC) tax to 5% from 7.5% effective from 13 February.

Argentina renews domestic fund to control supply and prices The Argentine government has renewed a fund to secure the supply of edible oils to the domestic market at low prices until the end of January 2023, AgriCensus wrote on 3 February. Set up last February, the fund was introduced in a bid to control domestic price inflation following negotiations between the government and industry. The fund compensates local market players by subsidising the cost of oils, effec8 OFI – MARCH/APRIL 2022

General News March.April 2022.indd 5

tively decoupling international prices from the domestic price. Under the scheme, the industry agreed to supply the equivalent of 29M litres/month of vegetable oil – around 75% of domestic consumption – at a discounted rate expected to cost the sector around US$190M/year, the report said. The trust would be funded by private companies that are members of the oilseed crushing and export chamber Ciara-CEC (Ciara), although the industry group

opposed the measure. Total soyabean crushing in Argentina last year was up by 18% year-on-year, rising to 42.41M tonnes – the highest cumulative volume since 2016, according to data from the Ministry of Agriculture, Livestock and Fisheries. However, crushing margins remained negative throughout most of the second half of 2021, due to volatile soyabean prices, drought and the fall in Paraná River water levels increasing export costs, Ciara said. www.ofimagazine.com

23/03/2022 10:19:21

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NEWS

Indonesia revokes plantation permits The Indonesian government has revoked millions of hectares worth of permits for logging, plantations and mining, according to a 12 January Mongabay report. Environmental activists cautiously welcomed the move announced on 6 January, saying it was an opportunity to conserve land by redistributing it to local and indigenous communities. However, some senior government officials said the concessions should be reissued to other companies for development, The affected concessions include Ministry of Environment and Forestry permits for 192 logging, plantation, mining and ecotourism operations totalling 3.13M ha;

36 Ministry of Agrarian and Spatial Planning permits for plantations (34,448 ha); and 2,078 Ministry of Energy and Mineral Resources permits for mines. To date, Mongabay said only the forestry ministry had released the names of companies whose permits it had revoked, including many in the palm oil sector. A preliminary analysis by environmental NGO Auriga Nusantara showed there was 2.4M ha of rainforest still standing on the lands covered by the 192 forestry ministry permits. In other news, Mongabay reported on 26 January that the clearing of forests in Indonesia for oil palm plantations had fallen in recent years.

Indonesian environmental organisation Auriga compared forest cover in areas licensed for oil palm cultivation in 2019 with 2000. It found that the bulk of existing plantations was established on land that had not been standing forest in 2000, with deforestation associated with 3.1M ha of plantations established since 2000, out of a total of 16.2M ha planted as of 2019. The highest annual rate of deforestation for oil palm plantations since the start of the millennium was in 2012, when 314,937ha of forest were cleared, according to Auriga. After that date, the rate declined, falling to less than 150,000ha in 2015, and less than 100,000ha from 2016 onward.

Plant-based meat alternatives could account for 6% of total meat consumption by 2030 if the sector continues to expand at the current rate, according to analysis by the Good Food Institute (GFI) reported by World Grain on 7 February. The GFI estimated that just 2% of global wheat and soya production would be needed for plant-based meat in the future. However, the industry may require up to three times the projected supply of soya protein concentrate, according to the ‘Plant-based meat: Anticipating 2030 production requirements’ report. The report urged manufacturers and ingredient suppliers to explore alternative plant

Photo: Pixabay

Meat alternatives need more soya and coconut oil

Coconut oil's high saturated fat content makes it an essential component of many plant-based meat products

proteins, such as certain legumes, oilseeds, vegetables, nuts and cereals.

Coconut oil’s high saturated fat content and resulting functional properties made

it an essential component of many plant-based meat products, with the sector requiring at least 16% of global supply by 2030. However, supply constraints and price volatility suggested that the plantbased industry should aim to diversify into alternative fats, GFI’s science and technology analysis manager Dylan Dowdy said. Novel manufacturing methods for producing similar fats, like using microbial strains or modifying more abundant plant fats, should be explored, he added. “If alternative means of production are not developed, more investments in coconut processing capacity and cultivation are likely to be required."

COFCO and Sinograin set up new joint ventures China’s largest food processor and manufacturer COFCO has partnered with stateowned grain company Sinograin to establish two joint ventures in grain storage and oilseed crushing and processing, Global AgInvesting reported on 19 February. Founded in 1949, COFCO Group has become the country’s top food processor, with fully integrated chains for grain trading, rice processing, oil processing, corn processing and sugar trading and processing, along with brands, ports and wharves, equipment, storage and logistic capabilities, according to the report. 10 OFI – MARCH/APRIL 2022

General News March.April 2022.indd 6

Sinograin was formed in 2000 and now oversees 98% of the country’s total grain reserves. For years, COFCO and Sinograin provided China with “two-wheel drive” advantages, with COFCO taking a market-orientated approach, and Sinograin a more policy-focused approach, Global AgInvesting wrote. The two new joint ventures were designed to account for overlapping businesses, the first being a grain storage business to be controlled by Sinograin and the second an oilseed crushing and processing business, to be managed by COFCO. Sinograin president Deng Yiwu said the

grain business would solidify its position managing the country’s central grain reserve, while the combined oilseed business would improve competitiveness. Most of China’s key state-owned companies had evolved from former monopolies that had since come under central planning, resulting in overly large businesses, Global AgInvesting wrote. The move to combine COFCO’s and Sinograin’s operations would position COFCO as more of a rival to the world’s top agribusinesses – Archer Daniels Midland, Bunge, Cargill, and Louis Dreyfus Company, the report said. www.ofimagazine.com

23/03/2022 10:19:33

BIOFUEL NEWS

Chevron to buy REG, in joint venture with Bunge US multinational energy corporation Chevron announced on 28 February that it would acquire biofuel producer Renewable Energy Group (REG) for US$3.15bn, citing REG’s expertise in feedstock sourcing and market access as factors to help boost its renewable fuels business. The deal is expected to close in the second half of this year, subject to regulatory approval. Chevron said the acquisition was expected to speed its progress towards expanding its renewable fuels capacity to 100,000 barrels/ day by 2030. Part of that growth would come from REG’s current expansion at its existing renewable diesel plant in Geismar, Louisiana, and Chevron’s project to convert its El Segundo refinery in California to renewable diesel production.

REG is headquartered in Ames, Iowa, and Chevron said Iowa was expected to become the epicentre for its renewable sourcing, with its new renewable fuel joint venture with Bunge North America, also to be managed out of Ames. The signing of the joint venture deal was announced on 22 February, with Bunge agreeing to contribute its soyabean processing plants in Destrehan, Louisiana, and Cairo, Illinois, and double their combined capacity from 7,000 tonnes/ day by the end of 2024. Bunge would operate the facilities while Chevron would have purchase rights for the oil for use as a renewable feedstock. REG is a leading producer of biodiesel and renewable diesel in North America and operates nine bio-refineries in the USA and two in Europe.

Global seed company Nuseed and British multinational oil and gas company BP have agreed a 10-year offtake deal to promote the use of carinata oil as a biofuel feedstock. As part of the deal, BP would purchase Nuseed’s carinata oil and process or sell it into growing markets to supply sustainable biofuels, Nuseed said on 1 February. A subsidiary of Australian agricultural chemical firm Nufarm, Nuseed added carinata to its global portfolio in November 2019, following a successful pilot project in Argentina. Nuseed was currently increasing commercial production in Argentina and planning expansion programmes in South America and the USA, the company said, with initial research and market development programmes also underway in Europe and Australia.

Photo: Adobe Stock

BP and Nuseed in carinata agreement

BP will buy or sell Nuseed’s carinata oil as a biofuel feedstock in a 10-year deal

IN BRIEF UK: British multinational oil and gas company BP announced on 3 February that it had acquired a 30% stake in UK hydrotreated vegetable oil (HVO) producer Green Biofuels (GBF). Founded in 2013, GBF’s products are made from feedstocks such as vegetable oils and animal fats. It has delivered over 55M litres of HVO products to the UK market over the past two years, according to BP. USA: US speciality refining company Vertex Energy has announced a five-year renewable diesel supply agreement with Idemitsu Apollo Renewable Corporation – a subsidiary of Japanese energy firm Idemitsu Kosan. The agreement was conditional on Vertex closing its planned acquisition of the Royal Dutch Shell Mobile refinery in Alabama, and the subsequent conversion of its hydrocracking unit to produce renewable diesel fuel, Vertex said on 17 February. The project was due to become operational by the end of this year, on completion of the acquisition. Under the Idemitsu deal, Vertex would supply 100% of the renewable diesel produced at the Mobile refinery to Idemitsu for five years, with Idemitsu paying an indexed, spot-market price for each gallon.

EC may tax crop-based biofuels and fossil fuels equally The European Commission (EC) is considering taxing fossil fuels and crop-based biofuels in the same way, according to a 10 February report by EURACTIV. The EU executive recently proposed the revision of the 2003 Energy Taxation Directive (ETD), which currently did not take into account the environmental performance of energy products, the report said. “For example, there is no link in the ETD between the minimum tax rates of fuels and their energy content or environmental impact. The rules have also failed to keep pace with the development of new www.ofimagazine.com

Biofuel March.April 2022.indd 2

and alternative fuels,” an EU official told EURACTIV, adding that a complex patchwork of exemptions had proliferated across the bloc, leading to a “distortion across the single market”. Current legislation has resulted in tax anomalies, particularly in the Visegrad region (Czech Republic, Hungary, Poland and Slovakia), where biodiesel and bioethanol are taxed higher than diesel and petrol, according to data from biofuels associations. The EU official said the new system would ensure that the “most polluting fuels are taxed the highest”.

According to the new proposal, the lowest minimum rate of €0.15/GJ (US$0.17/ GJ) would apply to electricity, low-carbon fuels, renewable fuels of non-biological origin and advanced sustainable products (such as sustainable biofuels, bio-liquids and bio-gas). The next lowest category would be that of sustainable, but not advanced products (such as biofuels, bio-liquids and bio-gas) with a tax rate of €5.38/GJ (US$6.01/GJ). Conventional fossil fuels, such as gas oil and petrol, would have the highest minimum rate, the report said. OFI – MARCH/APRIL 2022

23/03/2022 10:25:12

RENEWABLE NEWS

Clariant to sell 50% stake in Scientific Design Swiss speciality chemicals company Clariant announced on 2 February that it had agreed to sell its 50% stake in ‘green’ ethylene producer Scientific Design Company to Saudi Basics Industries Corporation (SABIC), its joint venture partner in the firm. The acquisition by the Saudi chemical firm is expected to be finalised in mid2022, subject to regulatory approval. Scientific Design offers both the process technology and catalyst for the dehydra-

JAPAN: Japanese chemical manufacturing firm Kaneka Corp said on 7 February that it is expanding its production of biodegradable polymer with a new plant at its Takasago manufacturing site. Combined with the existing plant’s 5,000 tonnes/ year capacity, total production capacity would be 20,000 tonnes/year, when the new capacity became operational in January 2024. Kaneka said its Green Planet biomass polymer – poly-beta-hydroxybutyrate (PHBH) – was produced by micro-organism bio-synthesis using plant oils. It could be used to make straws, cutlery, coffee capsules, bags, films and other products. CANADA: Canadian bioplastics company TerraVerdae Bioworks said on 25 January that it will acquire thermoplastic elastomer developer PolyFerm Canada, Globe Newswire reported. PolyFerm’s portfolio includes a range of biobased and bio-degradable elastomeric polymers known as medium chain length polyhydroxyalkanoate (MCLPHAs), which are made from renewable sources such as sugars and vegetable oils. TerraVerdae, which has product development facilities in Edmonton, said the deal would strengthen its ability to produce biopolymers and resins for a wider range of applications. 12 OFI – MARCH/APRIL 2022

Renewable news March.April 2022.indd 2

The range of more than 70 surfactants and PEGs was based on bio-ethanol derived from sugarcane or corn and significantly expanded Clariant’s Vita range of ingredients, based on renewable feedstocks, the company said on 1 February. The new Vita products were suitable for use in consumer goods such as detergents, hair and body shampoo, paint, industrial lubricants, and crop formulations, Clariant said.

Surfactants from fish by-products Scottish start-up Eco Clean is undertaking a research project with experts from the University of St Andrews to develop a new process using fish farming by-products to produce surfactants, according to the Industrial Biotechnology Innovation Centre (IBioIC). Eco Clean’s approach uses waste from the Scottish aquaculture sector to create chemical compounds, with a specific focus on fish oils rich in fatty acids. “We have already proved the feasibility in a previous [2020] study and hope that, by the end of this project, we will find ourselves closer to full-scale commercialisation and seeing the surfactant used in a range of industrial and selected household products,” Eco Clean director

Eco Clean is focusing on fish farming by-products to produce surfactants

Mark Hamilton said. “I was already using fish oil waste to produce biofuel, so decided to explore a similar process and feedstock to produce a bio-based surfac-

Photo: Adobe Stock

IN BRIEF

tion of ethanol to ethylene, which includes ethylene oxide (EO), ethylene glycol (EO/ EG), bio-ethylene, bio-EO, bio-EG, EO derivatives, polyols and maleic anhydride. The company said its ‘green’ ethylene could be used to make other major downstream derivatives such as polyethylene, ethylene dichloride, styrene, and ethyl benzene. ● Clariant has announced the launch of a range of 100% bio-based surfactants and polyethylene glycols (PEGs).

tant and we were pleased to see success from the initial feasibility study,” Dr Alfredo Damiano Bonaccorso, senior research fellow at the University of St Andrews, added.

LANXESS partnership in bio-preservatives German speciality chemicals firm LANXESS has announced a partnership to produce sustainable preservatives from vegetable oils with Matrìca – a joint venture between Italy’s Eni’s chemical company Versalis and bioplastics and biochemicals leader Novamont. The Matrìca plant at Porto Torres, Sardinia, Italy, is supplying LANXESS with raw materials from vegetable oils which LANXESS will use to manufacture a new series of industrial preservatives, extending its Preventol range, according to the company’s 31 January statement. LANXESS said the new Preventol preservatives were designed for consumer products such as household cleaners, laundry care and dishwashing products, as well as paints and coatings.

The company’s Material Protection Products business unit develops and markets biocides, preservatives and disinfectants for a wide range of microbial control applications. These products protected materials against spoilage by microorganisms such as bacteria, yeasts, fungi, viruses and algae, LANXESS said. Under the Preventol brand name, the business unit sells active ingredients and formulations for paints and coatings, wood protection, construction products, process control, disinfection and other application areas. Matrìca manufactures the Matrilox range of bioproducts – mono and dicarboxylic acids and esters – for high value-added applications such as paints and inks, bio-plastics, bio-lubricants and bio-herbicides) at the Porto Torres site. www.ofimagazine.com

23/03/2022 10:28:56

E D I B L E O I L S | B I O D I E SE L | R E N E WA B L E D I E S E L

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TRANSPORT NEWS USA/EU: Renewable fuel producer Renewable Energy Group (REG) announced on 18 February that it is in a partnership with marine fuel supplier and trader Bunker Holding Group to further develop marine markets for biodiesel in the USA and the EU. The agreement would initially focus on opportunities in North America and Europe, where trials of B20 and B30 were being run in high-traffic regions of both continents, REG said. USA: US energy infrastructure company Kinder Morgan (KMI) said on 7 February that it would build a new renewable diesel hub in Southern California, enabling customers to aggregate renewable diesel batches (R99) in the Los Angeles area and move them on the SFPP pipeline system to high demand markets in Colton and Mission Valley, California, creating up to 20,000 barrels/day of blended diesel truck throughput capacity, with the ability to expand in the future. Upon completion, the Southern California hub would be the first of its kind in the USA to transport batches of renewable diesel by pipeline to transmix – a process designed to enable customers to avoid the loss of the California renewable tax credits, including Low Carbon Fuel Standard credits, KMI said.

Vopak builds storage for Rotterdam bio-refinery Leading independent tank storage company Royal Vopak is building storage for a Shell biorefinery in the Netherlands, Tank Storage magazine reported on 17 February. Under the terms of the long-term deal between the two companies, Vopak will store and supply feedstocks from its Vlaardingen terminal to the global energy giant’s biorefinery in Rotterdam, according to the report. Shell’s 820,000 tonnes/year biorefinery at the Shell Energy and Chemicals Park Rotterdam will produce fuels such as sustainable aviation fuel (SAF) and renewable diesel from waste feedstocks including used cooking oil (UCO), waste

animal fat and other industrial and agricultural residual products, Tank Storage wrote. The waste feedstocks would be supplemented with sustainable vegetable oil. The Shell refinery would be one of Europe’s largest SAF-production facilities, with Vopak’s feedstock operation also one of the largest of its kind in the biofuels industry, the report said. Vopak was building 16 new tanks at its Vlaardingen site with a total capacity of 64M litres (64,000m3), with a number of old tanks being demolished to make space for the new tanks. Other existing infrastructure would be modified to handle waste-based feedstocks.

Suez Canal Authority increases toll rates The Suez Canal Authority (SCA) has introduced a new set of canal tolls on all vessels travelling both north and south, effective from 1 March, American Shipper reported on 28 February. Depending on carrier type, the increase was either 5%, 7% or 10% for both full and empty vessels. The increase was the second toll increase on all vessels, with the exception of LNG and cruise ships. Those two vessel classes were not affected when the SCA announced in early November that it would increase transit tolls through the canal by 6% beginning in February, the report said. The latest price rise meant a one-way transit would

Photo: Adobe Stock

IN BRIEF

The cost of a one-way transit through the Suez Canal for a large container ship will increase by US$50,000, effective 1 March

increase from US$625,000 to US$675,000 for a large container ship, Xeneta chief analyst Peter Sand said. Due to the length of voyage time from China to the

USA and the increase in fuel prices, carriers would have to decide whether to go around the Horn of Africa and use more fuel or go through the Suez Canal, the report said.

Shipping cost hikes could benefit US soya, corn exports A new study by economists from the University of Georgia and North Dakota State University (UGA-NDSU) has found that a recent increase in shipping costs could boost US exports, World Grain reported on 3 March. While rising rates had affected exporters of corn, soyabeans and a range of other commodities, the UGA-NDSU team found that recent spikes in those shipping rates – after factoring in inflation – did not necessarily differ from the historic norm. 14 OFI – MARCH/APRIL 2022

Transport news March.April 2022.indd 2

“Our main findings are that ocean transportation freight rates rise with the things that economists might expect would cause those rates to rise such as the demand for shipping, fuel prices and congestion at destination ports. And they tend to fall with increases in the fleet capacity, the ability of the fleet or the size of the fleet measured in deadweight tonnage,” UGA associate professor Michael Adjemian said. The study also looked at the effect of rising maritime transportation prices

on the global market share for corn and soyabeans. Its simulation model indicated the USA gaining about a 4% market share in soyabeans and Brazil’s share dropping by the same percentage. For corn, the USA and Brazil both gained at the expense of Argentina and Ukraine. “This makes sense because even though the USA is closer to China than Brazil is, these ocean freight rises and congestion challenges are going to act eventually to shorten supply chains,” Adjemian said. www.ofimagazine.com

23/03/2022 10:36:36

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BIOTECH NEWS WORLD: German chemical firm Bayer has entered into an agreement with Canadian agriculture biotech company MustGrow to commercialise bio-pesticides from foodgrade mustard seeds, which harbour natural defence mechanisms against diseases and pests, Biomarket Insights reports. MustGrow said it had conducted field trials in North and South America showing its patented TerraMG preplant soil bio-fumigant products were effective against pests in multiple crops. The compounds within TerraMG reacted to produce allyl isothiocyanate, which disrupted cell function in target pests. The product also used a molecule called ionic thiocyanate (SCN-) which, when absorbed, starved a plant of iron, an essential nutrient. Under the deal, Bayer would test MustGrow’s products and also had the option to acquire exclusive rights to MustGrow technologies for pre-plant soil fumigation, bio-herbicide applications, and post-harvest potato preservation in Africa, Asia, Europe and the Middle East. In return, Bayer would fund MustGrow’s laboratory and regulatory work, plus field and market development for commercialisation. ISRAEL: The investment arm of German chemical and biotech giant BASF and Orbia Ventures are investing in Israeli biotech start-up FortePhest to develop technology to combat herbicide-resistant weeds and invasive plants. FortePhest had developed proprietary herbicides which disrupted the homeostasis of free amino acids in plant cells and selectively targeted a weed’s meristems, stopping shoot and root development without harm to corn, wheat and other crops, the two firms said on 10 February. 16 OFI – MARCH/APRIL 2022

Biotech news March.April 2022.indd 2

Glyphosate production hit by technical issues German chemical giant Bayer has said production of its glyphosate-based weedkiller may be reduced in the short term due to one of its ingredient suppliers running into technical problems, Reuters reported on 14 February. The “mechanical failure” experienced by Bayer’s supplier coincided with a tight supply situation in global crop chemical markets, partly due to the global COVID pandemic, Bayer added. A Bayer spokesperson would not disclose the name of the supplier or the ingredient affected, Reuters wrote, declining to comment further on any impact on deliveries to customers. The active ingredient in Bayer brands such as Roundup and RangerPro – glyphosate – has been the subject of lawsuits in the USA mostly brought by residential gardeners claiming the weedkiller

caused their cancer. The company had settled around 100,000 cases costing billions of dollars and petitioned the US Supreme Court for legal relief, building its case mainly on repeated safety clearances given by the federal environmental regulator, the report said. In a letter seen by Reuters, Bayer announced the supply issue to industrial customers using glyphosate, declaring force majeure, which typically suspends a supplier’s contractual liabilities following disruptions beyond its control. In the letter, Bayer said repairs at its supplier would take about three months. The spokesperson said the manufacturing issue would also affect in-house production of its own glyphosate-containing brands such as Roundup.

Protein gene in soyabean identified A research team at the University of Illinois, USA, has identified the gene that affects protein in soyabeans following a 30-year search, Seedworld wrote on 15 February. “Soyabeans are around 40% protein, and this gene increases that by about 2%. It doesn’t sound like a lot, but compared to any other seed protein gene that’s been mapped for soyabean, it’s at least double,” said Brian Diers, the Charles Adlai Ewing chair of Soybean Genetics and Breeding in the Department of Crop Sciences and co-author of the study. Study co-author Matt Hudson, Professor of Bioinformatics in Crop Sciences, said if the high protein form of the gene could be placed into commer-

Photo: Adobe Stock

IN BRIEF

Soya protein is used in bothoffered humanimproved food andyields livestock Calyxt says seedless hemp andproducts quality

cially-grown soya varieties, it would lead to a significant increase in protein for livestock and humans worldwide. The identified Glyma.20G85100 gene appeared to be part of the soyabean

plant’s circadian machinery; the way the plant keeps track of time to maximise photosynthesis during the day, work out when to flower and set seed, and many other processes, Diers said.

Bayer re-applies to plant GM cotton in India German chemical firm Bayer has re-applied to plant its genetically-modified (GM) cotton seeds in India, Krishi Jagran magazine reported government sources as saying. Global seed company Monsanto – prior to its 2018 acquisition by Bayer – had withdrawn an application for the GM Bollgard II Roundup Ready Flex (RRF) cotton variety in late 2016, following a range of government measures against it, the 11 February report said. Bayer – which paid around US$63bn for

Monsanto – had resubmitted the application for Bollgard II RRF in December through its local joint venture partner, according to the sources who asked not to be identified. The approval process could take several years and it was not clear when it would start, the sources said. “Our efforts are aimed at increasing crop productivity, doubling farmer incomes and making Indian agriculture sustainable and globally competitive,” Bayer said in a statement. www.ofimagazine.com

23/03/2022 10:41:09

DIARY OF EVENTS 27-28 April 2022

23-25 May 2022

20-23 June 2022

10th European Algae Industry Summit Reykjavik, Iceland www.wplgroup.com/aci/event/europeanalgae-industry-summit/

4th International Symposium on Lipid Oxidation and Antioxidants Vigo, Spain https://veranstaltungen.gdch.de/tms/ frontend/index.cfm?l=11144&modus=

20th International Sunflower Conference Novi Sad, Serbia www.isasunflower.org/news-events/ news/article/20th-internationalsunflower-conference-novi-sad-serbia1%EF%BB%BF

30 April 2022 26th Technical Short Course: Fundamentals of Edible Oil Atlanta, Georgia, USA www.smartshortcourses.com/ oilprocess26/index.html

24-25 May 2022 Grain and Maritime Days 2022 in Istanbul Istanbul, Turkey www.apk-inform.com/en/conferences/ grain_and_maritime_days_2022/about

1 May 2022

25-26 May 2022

27th Practical Short Course: New Techniques in Edible Oil Processing and Refinery Optimization Atlanta, Georgia, USA www.smartshortcourses.com/ oilprocess27/index.html

6th Future of Surfactants Summit Barcelona, Spain www.wplgroup.com/aci/event/ surfactants-summit/

1-4 May 2022 AOCS Annual Meeting & Expo Atlanta, Georgia, USA https://annualmeeting.aocs.org 9-10 May 2022 7th Leipzig Symposium - Vegetable Oils in a Circular Economy Leipzig, Germany https://veranstaltungen.gdch.de/tms/ frontend/index.cfm?l=11177&sp_id=2 9-11 May 2022 Globoil International 2022 Dubai, UAE www.globoilinternational.com 10-11 May 2022 12th ICIS World Surfactants Congress Jersey City, New Jersey, USA www.icisevents.com/ehome/ worldsurfactants/home/ 11-12 May 2022 FENAGRA – Brazilian Rendering Congress Campinas, São Paulo, Brazil www.fenagra.com.br 17-19 May 2022 GrainCom22 Geneva, Switzerland www.graincomevents.com 18-19 May 2022 Oleofuels 2022 Marseille, France www.wplgroup.com/aci/event/oleofuels www.ofimagazine.com

Diary March.April 2022.indd 1

25-28 May 2022 EFPRA Congress 2022 Vilamoura Algarve Resort, Portugal https://efpra2022algarve.com 7-8 June 2022 IGC Grains Conference 2022 (Hybrid) London, UK www.igc.int/en/conference/confhome. aspx?email=register 8-9 June 2022 World Bio Markets Hilton Diagonal Mar, Barcelona, Spain www.worldbiomarkets.com 9-10 June 2022 2nd Annual Biofuels Forum Berlin, Germany https://inventu.eu/2nd-annual-biofuelsforum/ 13-15 June 2022 2022 International Fuel Ethanol (FEW) Workshop & Expo Minneapolis, USA www.fuelethanolworkshop.com/ema/ DisplayPage.aspx?pageId=Home 20-22 June 2022 Sustainable Aviation Futures Congress Mövenpick Hotel, Amsterdam The Netherlands www.safcongress.com

For a full events list, visit: www.ofimagazine.com Information subject to change

27-28 June 2022 MCPD Esters and Glycidyl Esters (GE) Symposium 2022 Berlin, Germany https://veranstaltungen.gdch.de/tms/ frontend/index.cfm?l=11198&sp_id=2 5-6 July 2022 13th Biofuels International Conference & Expo Brussels, Belgium https://biofuels-news.com/conference/ biofuels/biofuels_index_2022.php 23 August-3 September 2022 World Congress on Oleo Science (Online) https://jocs.jp/en/conference-meeting 8-9 September 2022 High Oleic Oils Congress 2022 Madrid, Spain http://higholeicmarket.com/hoc-2019 12-13 September 2022 4th Edition of Euro-Global Conference on Food Science and Technology (Hybrid) Paris, France www.usa-conferences.com/food 12-16 September 2022 oils+fats and Drinktec Messe Munich, Germany www.oils-and-fats.com/index.html 20-21 September 2022 Palmex Malaysia 2022 Kuala Lumpur, Malaysia http://asiapalmoil.com 23-28 October 2022 North American Renderers Association Annual Convention Ritz Carlton Laguna Niguel Dana Point, California, USA https://nara.org/about-us/events 25-27 October 2022 Palmex Indonesia 2022 Medan, Indonesia http://palmoilexpo.com OFI – MARCH/APRIL 2022

23/03/2022 11:31:22

INTERNATIONAL MARKET REVIEW

The bad news for vegetable oil consumers has piled on week after week since our New Year review. Not only are prices rocketing amid a perfect storm of lost production among three of the four most used oils – palm, rapeseed and soyabean; now a geopolitical supply disruption has emerged for the once relatively plentiful fourth member, sunflower oil. Will record prices across the sector slow food oil consumption just as industrial biodiesel use gains new lustre from soaring energy markets? And what impact will all this have on producers’ planting plans? How will US farmers exploit Latin America’s La Niña crop losses? A few months ago, most analysts appeared to play down prospects for a major hit to Latin American soyabean crops from a La Niña spell. Brazil was expected to produce a record 144M tonnes, Argentina as much as 51M tonnes and Paraguay 10.5M tonnes, all sowing more in response to the past season’s nine-year highs in prices. Dryness and heat waves have now slashed analysts forecasts, some running as low as 121M, 38M and 4M tonnes respectively for the three main producers. Some untimely rain in harvest-ready Brazilian regions has been a mixed blessing, raising risks of a yield or quality hit, offsetting the more bearish impact of a crop maturing and arriving on the market earlier than usual. Even if some of these countries manage to produce a little more than the lowest estimates, it is clear export supplies of both raw soyabeans and their oil will be far below what was expected at the turn of the year. The response on the markets has been dramatic, Chicago Board of Trade (CBOT) nearby futures have rocketed from little more than US$12/ bushel at the end of 2021 to over US$17/bushel recently. How will American farmers respond? The US Department of Agriculture’s recent Outlook Forum put a figure of 35.6Mha on the 2022 planted area. Assuming a normal planted/harvested ratio and yields not far off last year’s average result, the crop might be around 12218 OFI – MARCH/APRIL 2022

John Buckley March.April 2022.indd 2

Perfect storm driv

Figure 1: Crude vegetable oil prices apart from refined palm oil (US$/tonne) 124M tonnes compared with last year’s 120.7M tonnes. Even if the Latin American crops had fared better, they would not have added much to the relatively low US carryover stocks foreseen for the close of the season. However it would not be so surprising to see farmers planting if prices stay high. Looking to the futures markets, soyabeans are expected to stay firm at least until the next US crop arrives. Moving targets on the demand side are US crush, which has been strong recently, partly to feed meal exports and partly due to rising domestic soya biodiesel demand. The latter sector is expected to expand its needs by almost one quarter this season to a record approaching 5M tonnes – about 43% of US total domestic ‘disappearance’. Another spur driving soyabean oil price strength has been a burst of demand from large edible oil importers such as India, as it faces tightening supplies and soaring costs of usual staples like palm, sunflower and rapeseed oils. After peaking in the US$1,730s, US soyabean oil futures were trading near US$1,650/tonne as we went to press against US$1,170 in late December. CBOT soyabean futures have also enjoyed a revival in demand from top buyer China. Although the USDA has been working on the basis that Chinese imports may ease back by almost 5.8M tonnes to some 94M tonnes, the country has been a constant buyer recently, driven by fears that larger Latin American crop losses will interrupt its supply.

Graph: John Buckley

With lost production hitting the three main vegetable oils – palm, soya and rapeseed – prices are rocketing, with once plentiful sunflower oil supplies now in question because of the RussiaUkraine war John Buckley

Brakes off palm oil

Ideas that record palm oil prices would destroy demand looked a little premature as the combination of crop losses and extra demand in competing oil sources – not to mention the strongest energy market in a decade – played into the bullish narrative for palm oil in first quarter 2022. Official Malaysian Palm Oil Board data showed second largest palm oil supplier Malaysia recording a bigger fall in February’s exports than the markets expected – some 18.7% on the month – and closing stocks eroded by 3.85% to about 1.55M tonnes, their lowest level since July 2021. Imports fell on the month to all major consumers and many smaller customers as well. But while the early February export data was unpromising, things seem to have picked up since – with a 15% bounce in early March. Output usually starts to pick up seasonally in March, rising by 28.5% last year. Price support came from reports that cuts in import taxes in India – the world’s largest vegetable oil buyer – might stimulate more demand as it struggles with rising food price inflation. The risk of disruption to Ukrainian sunflower oil shipments (and tight rapeseed oil supplies after last year’s poor Canadian crop) also appear to have blunted the impact of palm oil price rises. The biggest upset for palm oil in the last quarter was top supplier Indonesia moving to curb its exports to protect its domestic food oil consumers from soaring prices – for which the country’s ambitious biodiesel www.ofimagazine.com

23/03/2022 11:25:23

INTERNATIONAL MARKET REVIEW

rives up oil values

Strategie Grains estimating a potential 7.4% jump to around 18.2M tonnes. However, the new season will start with low stocks. Globally, the carry-in will hit a multi-year low of less than 4M tonnes, almost half the level of two years ago. Last year’s Canadian crop loss was only partly offset by bigger harvests in Australia, Russia, Ukraine and Europe. As this issue goes to press, how the current conflict between Ukraine and Russia will play out in terms of agricultural production and trade is the big question and that uncertainty is likely to add to the bullish undercurrent in the rapeseed/canola market.

Figure 2: Malaysian palm oil prices since 2015 (nearby Bursa futures, US$ equivalent) plans must take a lot of the blame. As little as five years ago, Indonesia consumed just over 9M tonnes/year in its own market. This season, it is expected to use 16M tonnes, becoming the biggest consumer and fastest growing outlet for palm oil. Next in line, India, China and the EU account for about 8M, 7M and 6.5M tonnes of palm oil demand respectively. In both Indonesia and Malaysia, production will depend not only on weather but post-COVID labour mobility and steeply rising fertiliser costs. Indonesian exporters now have to obtain permits, while producers must declare how much they plan to sell on the home market (a target 30% of export volume). Indonesia is also going ahead with plans to test higher blends of palm in biofuel in response to reduced demand from key importers like the EU, with its decarbonisation and environmental agendas. Malaysia last year exported 10.6% less palm oil. Among major importers, demand from India bounced back from unusually low 2020 levels by some 30%. China cut intake by 31%, Europe by 15% and Pakistan by 15%. Malaysian full year production fell 5.3%, keeping stocks on a downward trend.

Rapeseed recovery?

Recent reports suggest a relatively modest response to the supply shortages that have driven rapeseed/canola and its products to record high prices in the past few months. As the largest supplier, Canada – with its mainly spring-sown crop – is best placed www.ofimagazine.com

John Buckley March.April 2022.indd 3

to plant more in 2022 but is limited by the disease risks of repeat sowing on the same ground, as well as rocketing prices of wheat – its main competitor for hectares. Recovery will therefore depend more on yields returning to normal from last year’s drought-depleted level. On the plus side, Canada seems to be leaving the worst of its long drought behind, which should help the sowing of its crop. Against that, stocks will start at their tightest level since 1998 – just 500,000 tonnes against 3.44M tonnes in 2019/20. Recent estimates suggest the country’s crop this year could reach 21M tonnes against last year’s 12.6M tonnes. However, demand will rebound as well. A recent Canadian conference saw potential 2022/23 off-take of 19.8M tonnes against this season’s 14M tonnes. However, importers will welcome a possible return of Canadian exports to a more normal 10M tonnes. Agriculture and Agri-Food Canada (AAFC) recently forecast 2021/22 exports finishing at 5.4M, having dropped 44% for the season to date, hitting Chinese and EU importers hard. Competition is expected to intensify between overseas and Canadian crushers, the latter expected to bid hard to maximise plant efficiency or closing the season early. Ironically, processors have been investing in a Canadian crush boom, recent new ventures pointing to capacity expansion of around 6.8M tonnes, so Canada must plan for larger future crops. Europe meanwhile, expects a bigger rapeseed crop in 2022, with French analyst

Graph: John Buckley

Sunflower oil supply threat

The Black Sea region is crucial in terms of global sunflower oil supplies, and was to account for 77% of this season’s global exports before the current Russia-Ukraine conflict broke out. Ukraine was expected to export some 6.65M tonnes and Russia 3.8M tonnes out of a total 13.5M tonnes. India had been expected to top the import league, taking 2.7M tonnes as it switched some of its edible oil demand from increasingly expensive palm oil. Second place was expected to go to China at 2.18M tonnes, then the EU at 2.05M tonnes. Sunflower oil is also a popular choice in the Middle East/North Africa (MENA) region. At this stage, Ukraine’s export position is unknown. Sea port activity has been halted and the conflict raises questions over other land routes to Western Europe. Russia has maintained a semblance of ‘business as usual’ for grains and oilseed exports but how reliable can that be under the present volatile circumstances, not least the effect of sanctions on trade finance? Overall, sunflower oil accounts for about 10% of world vegetable oil consumption, having roughly doubled its contribution in the past dozen or so years. Until the vegetable oil price boom began in 2019/20, this growth had enabled sunflower oil to emerge as one of the more competitively priced oils, helping to keep costs generally in check. Prior to the conflict, crude sunflower oil was one of the few major oil sources not to have broken record 2007/08 prices. On present pointers, that barrier could soon be broken. Among the other vegetable oils, output of cottonseed, coconut, olive, palm kernel and groundnut oils are all expected to make modest extra contributions to global supplies but their impact will be eclipsed if soyabean or palm oils continue to underperform. ● John Buckley is OFI’s market correspondent OFI – MARCH/APRIL 2022

23/03/2022 11:25:31

SOUTH AMERICA

Last year, Argentina continued to dominate world exports of soyabean products, according to analysts

Photo: Adobe Stock

Argentina – strong soya sector The oilseed sector in Argentina has risen above a number of recent challenges to emerge with strong exports of soyabean products Gill Langham

20 OFI – MARCH/APRIL 2022

Argentina soyabeans draft Gill.indd 2

Argentina has faced a number of recent challenges including a recession exacerbated by the COVID-19 pandemic, surging inflation and a month-long industrial labour dispute. Other issues include dry weather affecting crop outcomes and low water levels on the Paraná River, the South American country’s main transportation route for grain cargo ships. However, with pent-up demand and high export prices, the sector has emerged in a buoyant position, according to a report by the United States Department of Agriculture (USDA). The Global Agricultural Information Network (GAIN) Oilseeds and Products Annual published on 15 April 2021 said that agricultural exports were helping to replenish the country’s foreign currency reserves and support the value of the Argentine peso. A report published in January by the country’s CIARA-CEC grains exporters and oilseed crushing chamber found that Argentina exported US$32.8bn in grains and their derivatives last year, which represented a record figure this century. In December alone, the sector exported US$2.68bn in grains and derivatives. “Last year was positive for Argentine exports of the oilseed cereal complex in terms of international values and volumes reaching a historical record,” CIARA-CEC

president and chairman Gustavo Idigoras says. “However, it was not positive in terms of margins given that the strong decline in Paraná River flows – plus the uncertainties in the currency exchange regime in Argentina together with high inflation – significantly reduced the profits of exporting companies.”

Strong products

Last year, Argentina continued to dominate world exports of soyabean products, according to analysts. Soyabean and product exports are particularly important to the country, as the government levies a 33% export tax on whole beans and a 31% tax on soyabean meal and oil, according to the GAIN report. These taxes provided more than US$4bn in revenue to the government in 2020. As well as being the world’s leading exporter of soya meal for animal feed, Argentina is also an important supplier of soyabeans, soyabean oil, sunflower seeds and other crops. “While Argentina is a relatively modest exporter of soyabeans, it has long been established as the world’s leading exporter of soyabean products to a range of markets across different regions,” Darren Cooper, a senior economist at the International Grains Council (IGC), says.

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23/03/2022 10:04:50

SOUTH AMERICA For soyabean oil, shipments by Argentina in 2020/21 (October/ September) totalled 30.6M tonnes, he says, while those by neighbouring Brazil and Paraguay amounted to 16.7M tonnes and 1.9M tonnes respectively. Argentina also dominated in the soya meal sector with exports in 2020/21 totalling 30.6M tonnes, while those by Brazil and Paraguay amounted to 16.7M tonnes and 1.9M tonnes, respectively. In contrast, in the same international trade year, soyabean exports by Argentina totalled 5.4M tonnes, while Brazil shipped 81.7M tonnes and Paraguayan exports stood at 6.4M tonnes. “Each country has different strategies,” Idigoras says. “Brazil is today a strong global player in soyabeans, while Paraguay continues to seek to grow in production and has a soyabean export chain closely linked to Argentine milling. Uruguay is also an exporter of soyabeans while Argentina favours the export of processed soyabean products.” Soyabean consumption in the current marketing year is projected at 42M tonnes, a year-on-year increase of 1% or 0.5M tonnes, as the global economy continues to recover from the COVID-19 pandemic and demand for soya products rises, according to the GAIN report. Soya meal production is projected to rise slightly at 31.7M tonnes and soya oil at 8.4M tonnes. Argentina is also a major producer of sunflowerseeds and sunflower oil. In the current marketing year, sunflowerseed exports are projected at 190,000 tonnes, according to the GAIN report, an increase of 40,000 tonnes – or 26% – on the previous year’s forecast. Sunflower oil exports are projected at 550,000 tonnes – a reduction of 90,000 tonnes, or 13%, due to improved northern hemisphere production leading to a reduction in demand for Argentine oil. Sunflower meal is projected at 640,000 tonnes, a drop of 60,000 tonnes or 8%. The report projects sunflower hectarage to recover to 1.7M ha – an increase of 305,000ha or 22% on the previous year – and sunflowerseed production to rise to 3.4M tonnes in the current marketing year, a year-on-year increase of 750,000 tonnes. “Sunflower oil exports are in a positive moment due to an improvement in the harvest in Argentina as well as favourable prices internationally,” Idigoras says. “Argentina is looking to resume international positioning, especially in countries such as India or China.” Peanut and its products are also one of the country’s export commodities. www.ofimagazine.com

Argentina soyabeans draft Gill.indd 3

For the current crop year, the GAIN report forecasts peanut plantings to remain level at 350,000ha and production to rise slightly to 1.35M tonnes from an estimated 1.3M tonnes the previous year. “For peanut oil, Argentina remains a strong player in the world market, after India. The main market is the EU but China is growing and increased its imports last year,” Idigoras says. “International prices are also on a firm upward trend, due to Chinese purchases.” Room for expansion in peanut area is currently limited by the processing capacity of the existing industry, according to the GAIN report.

Underlying issues

Although the trends seem all positive on the surface, Argentina is facing a number of underlying issues which affect the oilseeds sector. “The Argentine oilseed industry is being affected by a stagnation of soyabean production in the country that has been going on for more than 10 years and that has led to levels of above 50% of idle capacity of soyabean and sunflower crushing plants,” Idigoras said. “Macroeconomic instability in Argentina without access to local financing are critical aspects to take into account, along with logistical problems in relation to the u

OFI – MARCH/APRIL 2022

23/03/2022 10:04:51

SOUTH AMERICA u Paraná River and labour union conflicts.” The parched Paraná River has been forcing exporters to reduce cargo sizes. About 80% of the country’s agricultural exports are shipped from the agricultural port hubs of Rosario on the Paraná, according to a Reuters report. However, the shallowness of the Paraná threatened to cost Argentina’s grain farmers and exporters almost US$315M over a six-month period to last August, the Rosario grains exchange was reported by Reuters as saying. “The downstream of the Paraná River has generated unforeseen incremental costs for months and has reduced the load of ships that must go to Brazilian ports or to ports in southern Argentina that are 800km from Rosario,” Idigoras says. However, despite the transport difficulties, exports have been “fairly impressive” in the early part of this year, according to IGC’s Cooper. Other general transportation issues have also caused logistical problems, Idigoras says. “Logistics have been the main bottleneck in the last two years, firstly because of the effects of sanitary restrictions on maritime and land transport due to COVID-19 but, above all, because of the sharp increase in costs of international maritime freight that impact countries like Argentina that are far from the buyer markets.”

Effects of inflation

Surging inflation is also having an effect on the sector, according to industry analysts. “High inflation has a broad impact on production and exports. Firstly, it increases all production costs due to the rise on prices of inputs such as fertilisers, seed, and agrochemicals,” Idigoras explains. “The costs of harvesting and transportation to ports or grain handlers also rise and, finally, labour costs increase due to wage increases. “If the increase in inflation is not pari passu with the rate of devaluation, the industry automatically loses margins.” While rising costs associated with energy and inputs, such as fertilisers, are a concern for farmers, Cooper says that in the case of South America, final crop outcomes will not be shaped so much by fertiliser application rates but through the impact that hot, dry weather has on developing fields. Meanwhile, the government and the oilseed industry also reached an agreement last January to create a trust fund to subsidise domestic oil 22 OFI – MARCH/APRIL 2022

Argentina soyabeans draft Gill.indd 4

‘Argentina has long been established as the world’s leading exporter of soyabean products’ consumption in a bid to combat food inflation. The trust aims to collect US$190M/year to subside up to 29M litres of bottled vegetable oil for the domestic market, according to the GAIN report.

Main markets

China has typically been the main destination for soyabean exports, according to the IGC’s Cooper, while soya meal exports to the country are small, and, in some years, zero, he says. “This is because the bulk of China’s needs are met via imports of soyabeans – from the USA and Brazil, primarily, but also Argentina – for domestic processing,” he explains. While China has been a strong importer of soyabean oil, Idigoras says the country has recently introduced technical and administrative barriers to limit imports. “Argentina had to look for new markets for the oil and, today, India is the big customer.” Meanwhile, China and Argentina have pledged to deepen strategic cooperation on trade, currency and the infrastructurefocused Belt and Road initiative, according to a 6 February Reuters report. President Xi Jinping and Alberto Fernandez have agreed on a five-year plan for agricultural cooperation, identifying key areas to grow and diversify trade and investment in the sector. As well as being a major buyer of Argentine soyabeans – and beef – Beijing also has a major currency swap deal with the country, according to the report. China said it would help Argentina expand its exports and upgrade its industries, China’s foreign ministry quoted Xi as saying.

Price outlook

International prices have been supported recently by the potential impact of hot, dry conditions in key soyabean areas of both Argentina and Brazil, Cooper explains. “While Chicago soyabean futures have

been buoyed by dwindling prospects in Brazil, the world’s dominant soyabean exporter, this has also fed into higher prices in Argentina,” he adds. “We have also witnessed strong gains in international soya meal prices and this is, in large part, directly linked to concerns about the impact of a smaller soyabean crop in Argentina.” Against this backdrop, Cooper says there are grounds for expecting prices for soyabeans and soya meal to remain elevated moving forward. Cooper also notes that in early February, the IGC saw a “notable pickup in demand” for US soyabean supplies given the prospects of dwindling crop outcomes in Argentina and Brazil. A number of factors have to be taken into account when making oilseed price forecasts, according to Idigoras. “The climate in the producing areas will again be a strong driver, but also the conflicts between countries, monetary policies and bioenergy usage,” he says.

Looking ahead

The soyabean harvest in Argentina – and neighbouring Brazil – is expected to be larger this year, but poor growing conditions will dampen the prospect of a bumper crop, according to a report by Germany’s Union for the Promotion of Oil and Protein Plants (UFOP) on 10 February. A GAIN report from the USDA’s Foreign Agricultural Service (FAS) reported by World Grain on 2 March revised the country’s projected soyabean production in the 2021/22 marketing year from 45M tonnes to 41M tonnes as the result of dry weather. If the FAS forecast is correct, it would be the country’s smallest soyabean crop since 2017/18, when 37.8M tonnes were harvested, the report says, although Argentina would still rank as the world’s third largest soyabean producer. In terms of exports of soyabeans and soyabean products, in particular, the outlook for Argentina’s oilseeds sector will ultimately depend on the 2021/22 harvest outcome, according to Cooper, and the size of the exportable surplus. “There is no doubt that crops in Argentina and, indeed Brazil, will be smaller this year compared to the prior season,” he says. However, Idigoras is confident the country has the ability to continue competing with volume and quality in the oilseed market and to face local and international challenges. ● Gill Langham is the assistant editor of OFI

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OFI – MARCH/APRIL 2022 23

Photo: Adobe Stock

CHINA/OLEOCHEMICALS

Demand for personal care products is rising in China, due to increasing disposable incomes and product innovation

Growth in personal care China is a signficant global producer of oleochemicals and also imports large volumes of raw materials for oleochemical production. The growth of the personal care market and increasing consumer demand for ‘natural’ products will drive further development of this market Lim Teck Chaii, Desmond Ng China is both a significant producer and user of oleochemicals worldwide. In 2020, the country produced 1.7M tonnes of fatty acid, 307,000M tonnes of fatty alcohol, 193,000M tonnes of fatty amines, 724,300M tonnes of glycerine and 190,000M tonnes of soap noodles. China also imported a large volume of these oleochemicals products (see Table 1, p26). The key factors driving oleochemicals growth are end-use industries such as personal care, food and beverages, soaps and detergents, paints and plastics. These industries will continue to develop in the coming years, along with China’s economy, propelling the oleochemicals industry. Growing concerns about the use of petroleum feedstocks in chemicals has 24 OFI – MARCH/APRIL 2022

China oleochemicals NEW.indd 2

also contributed to higher usage of oleochemical products. In China, the raw material used for oleochemical production is mainly palm oil and its derivatives. Manufacturers are likely to increase their production of basic oleochemical products such as fatty acids, fatty alcohols, fatty amines and glycerine to meet rising demand.

Growth of industry

Oleochemical production began as a backyard industry with numerous smallscale and inefficient plants. When China undertook the initiative to liberalise its economy and joined the World Trade Organization (WTO) in 2001, various oleochemical companies invested in the country and transformed the industry. Currently, there are more

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23/03/2022 11:16:14

Photo: Adobe Stock

CHINA/OLEOCHEMICALS than 10 modern oleochemicals production plants in China (see Table 2, p26). The plastic and rubber industries are the major consumers of stearic acid, which is the widest consumed fatty acid in China. These two sectors account for 40% and 15% of total stearic acid consumption respectively. Fatty alcohols are mainly used in the production of surfactants, which account for 85% of China’s fatty alcohol consumption.

Personal care products

Among the sectors that utilise oleochemicals, personal care has good growth potential. Demand for personal care products is rising due to increasing disposable incomes and product innovation. China’s personal care product market was forecast in a Statista report to grow at a compound annual growth rate (CAGR) of 4.7% from 2015 to 2021. Statista also projected that revenue is expected to grow by 8.7% annually from 2022 to 2025 and reach US$78.5M by 2025 (see Figure 1, p26). Personal care products include hair care, skin care, creams, gels and ointments, with manufacturers looking at ways to increase vegetable-based ingredients in their applications as consumers become more concerned about potential adverse effects from petroleum-based ingredients. These concerns have also led to rising market demand for organic ingredients. Another major sector that could potentially benefit is the prospect of higher use of palm-based methyl ester in the renewable energy sector. China is the world’s largest global emitter of carbon dioxide. In 2019, the share of the country’s global CO2 emission was 27.92%. As the country heads towards more clean energy use, there will be rapid expansion of its renewable energy sector. From 2009 to 2019, China’s energy production from coal and crude oil has been reduced from 77.3% and 9.9% to 68.6% and 6.9% respectively. The country’s green energy production rose from 206.23 gigawatts in 2009 to 758.63 gigawatts in 2019. In the absence of a mandate for biodiesel, the use of palm-based methyl ester as biodiesel in the country is insignificant. Palm-based biodiesel usage will depend on its competitiveness relative to diesel. It may require Malaysia to promote the use of palm-based biodiesel for the Malaysian palm oil industry to benefit from the growth of the country’s renewable sector. www.ofimagazine.com

China oleochemicals NEW.indd 3

Industry factors Raw material prices Price fluctuations for raw materials in recent years have led to increased uncertainty and pressure on oleochemical enterprises in China, particularly as almost all the raw materials are imported. For instance, due to lower than expected crude palm oil (CPO) output in Malaysia, as well as slower growth in Indonesia since 2020, the price of refined, bleached and deodorised (RBD) palm stearin surged from an average of US$520/tonne in May 2020 (fob

natural bleach_mini_ofi.indd 1

Malaysia) to US$1,107.50/tonne in October 2021, an increase of 113% in 17 months. This led to many producers slowing operations as their profit margins fell or disappeared. China’s environmental action plan At the United Nations General Assembly in September 2020, China pledged to attain peak carbon dioxide emissions reduction by 2030 and carbon neutrality by 2060. Since then, various measures have been taken by provincial and local governments to implement the commitment. On 27 October 2021, the

07/06/2019 16:54

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23/03/2022 11:16:17

CHINA/OLEOCHEMICALS u State Council of China further released the white paper on ‘Responding to Climate Change: China’s Policies and Actions’, which outlines a variety of strategies, regulations, policies, standards and actions to achieve the goal set under the dual-carbon policy. The white paper has focused on the chemical industry as one of the areas where greenhouse gas emissions should be reduced. Approval of new chemical processing projects will be more stringent, and inefficient plants will also be shut down. This may favour the import of oleochemical products.

Products

Production

Import

1,700,000

1,245,000

Fatty alcohol

307,000

427,000

Fatty amine

194,600

Glycerine (reﬁned & crude)

723,300

1,763,000

Soap noodles

190,000

40,000

Fatty acid*

* includes 1.08M tonnes of stearic acid output and 323,600 tonnes of import Table 1: China’s output and import of basic oleochemical products, 2020 (tonnes)

Yihai & Kerry

Fatty acid, fatty alcohol, glycerine

Teck Guan (China)

Fatty acid, fatty alcohol, fatty amine

Rugao Shuangma

Fatty acid, glycerine

Taiko Palm Oleo

Fatty acid, glycerine

Dongma Palm

Fatty acid, glycerine

Hangzhou Oils & Chemicals

Fatty acid, glycerine

Liaoyang Huaxing

Fatty alcohol

Sasol Yihai Liangyugang

Fatty alcohol

Table 2: Major oleochemical companies in China

Source: Malaysian Palm Oil Council

Major oleochemical products produced

Figure 1: Sales of China’s beauty and personal care products (revenue in million US$)

Source: Statista

Company

Source: CCIA & Chinese Customs

China’s oleochemical industry is highly dependant on imports of raw materials such as palm oil and palm kernel oil Photo: Adobe Stock

26 OFI – MARCH/APRIL 2022

China oleochemicals NEW.indd 4

CPO imports China’s oleochemicals industry is highly dependant on Indonesia and Malaysia for imports of raw materials. Between 2016 and 2020, Indonesia’s palm oil production grew by an average annual rate of 6.9% or 2.4M tonnes/ year to 42.7M tonnes, while Malaysia’s production rose at a lower rate of 2.8% or 0.4M tonnes/year to 19.1M tonnes. Indonesia’s export duties on palm oil and palm kernel oil favour the export of its oleochemicals products. Competitivelypriced Indonesian oleochemicals such as stearic acid limit the expansion of demand for raw materials from Malaysia.

Conclusion

During 2012-2020, the production of major oleochemicals products in China registered a CAGR of 6%. This consistent production increase indicates that the country’s demand for raw materials will continue to be high. If the industry continues with its current growth rate of 6%/year, it is expected that the total size of the oleochemicals market in China will reach 8.83M tonnes in 2025. This is an additional 2.24M tonnes of market expansion for either raw materials or oleochemicals products in five years, as consumers continue their shift towards ‘natural’ ingredients. Indonesia is likely to maintain its domination both in the exports of oleochemicals and supply of raw materials to the manufacturers or users of oleochemicals products in China due to its competitive pricing and abundant feedstock. Nevertheless, Malaysia can also benefit from the growth in China’s economy and the country’s rising need for sustainable oleochemical feedstocks. ● This article is based on the report, ‘China’s Oleochemicals Market Oﬀers Opportunities for Higher Palm Based Derivatives and Palm Fraction Exports’, prepared by Lim Teck Chaii and Desmond Ng of the Malaysian Palm Oil Council and published in November 2021 www.ofimagazine.com

23/03/2022 11:16:36

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OLEOCHEMICALS

Despite the potential advantages of enzymatic processing in manufacturing oleochemicals, the process has not yet broken through into mainstream production. Chemical processing is the wellestablished route for oleochemical production globally and has proven its technical and economic feasibility on a large scale. However, the main drawback of chemical processing is its high energy consumption. The temperature of esterification/transesterification reactions, for example, ranges from 180-200°C. Such high temperatures darken the intermediate products and produce many unwanted by-products, so that many downstream treatment process steps are needed. Due to this, chemical technology has a high capital investment cost compared to an enzymatic-based plant. Enzymatic technology uses a mild temperature of about 60°C and allows a selective mechanism, which reduces the need for downstream process steps. As a result, the capital investment cost is lower. However, an existing manufacturer who already has a well-established conventional chemical process that works highly efficiently may not wish to convert existing conventional units. Working with enzymes requires special equipment and a different industrial set-up. Enzymatic 28 OFI – MARCH/APRIL 2022

Enzymes.indd 2

Photo: Adobe Stock

The enzymatic route Enzymatic technology offers a ‘green’ route to producing oleochemicals, with several companies already utilising the technology or on the verge of demonstration-scale production Ahmad Mustafa technology is therefore more attractive for new start-ups at the design and decision stage as the plant-based process costs about two-and-half times less than the chemical route. Another challenge associated with enzymatic production is the high cost of commercial enzymes and their deactivation if not treated correctly. The enzymatic process would be more profitable if the operational stability of enzymes is maintained for as long as possible. A minimum of two tonnes of product per 1kg of enzyme would maintain process profitability. However, even with improved enzyme operational stability, the cost of enzymes can never compare favourably with the cost of a chemical catalyst such as sodium hydroxide. The enzymatic process manufacturing cost will always be higher than the chemical process. Consequently, the higher manufacturing cost of the final product is reflected in the final product price. The question that needs to be asked is:

are customers ready to pay a premium for a ‘green’ product?

Green credentials

Recently, manufacturers have started publicising their utilisation of enzymatic technology to market their products. One such company is Evonik Industries, the first global manufacturer of biotechnologically-produced emollient esters. The company has been making myristyl myristate, decyl cocoate, cetyl ricinoleate and isocetyl palmitate using bioprocess enzymatic technology since 2008. Evonik emphasises the effectiveness and profitability of using this green technology in practical large-scale applications. These products are highly priced with high profit margins, meaning the cost of enzymes do not negatively affect profits. In addition, Evonik has dealt with the challenge of the high cost of enzymes by using a fixed-bed reactor with a circulation loop, through which the reaction charge u

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22/03/2022 09:33:43

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OFI – MARCH/APRIL 2022

Cost of chemical based plant (US$)

Cost of enzymaticbased plant (US$)

ISBL

4,626,000

1,786,140

OSBL

1,387,800

535,842

6,013,800

2,321,982

Contingency cost

601,380

348,297

Fixed capital cost

6,615,180

2,670,279

Start-up expenses

601,380

232,198

Direct capital investment cost (ISBL + OSBL) Engineering cost

Working capital Total capital investment

902,070

348,297

11,041,337

4,421,054

Table 1: Summary of total capital investment (4,950 tonnes/year capacity)

From lab to demo scale

Source: Ahmad Mustafa

Cost parameter

u is pumped long enough to reach the intended yield.

Oleo Misr for Oleochemicals

Another company entering the enzymatic field is Oleo Misr for Oleochemicals, located in Egypt, which plans to be the first firm in the Middle East and Africa to produce esters using enzymatic technology. The company – working with Novozymes A/S; Egypt’s October University for Modern Sciences and Arts, MSA University; and Nutrivet Misr Company, Egypt – plans to produce nonantibiotic feed additives from palm kernel oil, based on enzymatic technology. Apart from the lower reaction temperature offered by using lipase as a biocatalyst, the yield of monolaurin obtained was significantly higher compared with using conventional technology. This highlights the selective mechanism of using lipases to catalyse the esterification reaction between lauric acid and glycerol. The developed blends produced by Oleo Misr comprise mainly monolaurin, with three versions developed as additives for fish, poultry and calf feed. The three monolaurin-based products are being evaluated through several ongoing trials with Egyptian farms, with promising results being collected. In addition, an agreement was signed between Oleo Misr, Nutrivet and MSA University in January to further strengthen the cooperation in feed animal additives production. In another research project, Oleo Misr successfully produced glyceryl monostearate on a lab scale using enzymatic technology in a twostep reaction. After many process optimisations, the developed enzymatic technology yielded almost pure monoglycerides with traces of diglycerides 30 OFI – MARCH/APRIL 2022

Enzymes.indd 3

Photo: Adobe Stock

OLEOCHEMICALS

Evonik uses enzymatic technology to produce emollient esters such as myristyl myristate, decyl cocoate, cetyl ricinoleate and isocetyl palmitate

and no triglycerides. Oleo Misr calculated the total investment cost of monoglycerides production using enzymatic technology and chemical technology, with glyceryl monostearate selected as a studying model. The study was performed by calculating the inside battery limits (ISBL) cost, outside battery limits cost (OSBL), engineering cost, contingency cost, startup cost and working capital cost (see Table 1, above). The enzymatic-based plant has a total investment cost two-and-a-half times lower than the chemical-based plant. This is mainly due to the potential removal of the expensive short path distiller used in chemical technology.

Leading oleochemical producer Oleon is also aiming to move from lab to industrial demonstration scale in enzymatic technology. Oleon – together with Belgian research organisation VITO and six other European partners from Belgium, France, Germany and Italy – was granted EU Horizon 2020 research funding of €13.3M over four years (September 2019-August 2023). Their INCITE (Innovative Chemoenzymatic InTEgrated processes) project aims to widen implementation of enzymatic process technologies in the commodity, fine and speciality chemical industry in Europe. The end goal will be to have an industrial demonstration unit running on enzymatic catalysis at Oleon’s site in Oelegem, near Antwerp. Oleon has successfully produced isopropyl palmitate enzymatically through a 150kg pilot plant at its production site via lipase-based solvent-free synthesis of oleochemical esters. Oleon also studied the oils and fats splitting process using enzymatic technology in another project funded by the EU Horizon 2020 programme. This LIPES project (Life Integrated Process for Enzymatic Splitting of triglycerides) is dedicated to developing an alternative green route to the existing traditional splitting method of triglycerides to fatty acids and glycerin. Oleon said in its published progress report that using this approach would make the process far more resourceefficient, saving at least 45% water and 80% energy over current approaches. In addition, the new approach will enzymatically produce selected commercially important fatty acids at an overall lower variable cost than existing processes and showcase their use as intermediates in broader applications.

Conclusion

With such ongoing projects based on enzymatic processes and with new start-ups globally, enzymatic technology may begin to replace some existing traditional chemical plants in the near future. Enzymatic technology can replace chemical technology if the operational stability of enzymes is improved. Companies that wish to succeed in this area should therefore have a qualified team of researchers and developers behind them. ● Ahmad Mustafa is an assistant professor at MSA University in Cairo and a consultant for Oleo Misr for Oleochemicals, Egypt

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22/03/2022 09:33:51

MOSH/MOAH CONTAMINANTS

The next processing challenge The past three decades have seen increasing attention paid to contaminants in food oils. The 1990s saw a focus on trans fatty acids (TFAs) and pesticides, while the 2000s witnessed a shift to dioxins, polychlorinated biphenyls (PCBs) and polycyclic aromatic hydrocarbon (PAHs), Antonios Papastergiadis of Desmet Ballestra told the 25th Practical Short Course on Advanced Oils & Fats Processing and Application Technology on 15-17 November. In the 2010s, attention focused on 3-monochloropropane diol (3MCPD) and glycidyl esters (GEs), and the 2020s is seeing more focus on mineral oil and phthalates contamination (see Figure 1, below). Mineral oil hydrocarbons (MOH)

MOSH and MOAH are mineral oil hydrocarbons that can contaminate oils and fats in all stages of the production chain. While steps can be taken to mitigate their presence before processing, only deodorisation can remove them during refining encompass a wide range of products derived from petroleum distillation factions, according to Giorgia Purcaro, an analytical chemistry professor at the Gembloux Agro-Bio Tech Department at Belgium’s University of Liège. They comprise mainly mineral oil saturated hydrocarbons (MOSH) and mineral oil aromatic hydrocarbons (MOAH). Being non-polar molecules, MOSH and

MOAH have excellent miscibility with oils and fats, and are the main constituents of mineral oil lubricants, according to Papastergiadis. Potential sources of MOSH/MOAH contamination can come from the environment; crop harvesting; during transportation of seeds and crude oils; during oil extraction and refining; and from packaging (see Figure 2, below). Although the presence of MOH in u

Environment

Figure 1: Contaminants in vegetable oils www.ofimagazine.com

MOSH MOAH.indd 2

Source: Desmet Ballestra

Sources of contamination

Oil extraction/ reﬁning

Agricultural practices/ harvesting

Source: Desmet Ballestra

Packaging

Transport of seeds/ crude oils

Figure 2: Potential sources of MOSH/ MOAH contamination OFI – MARCH/APRIL 2022

22/03/2022 09:37:25

Figure 3: MOSH/MOAH mitigation – removal during refining

Source: Desmet Ballestra

MOSH/MOAH CONTAMINANTS to animal feed; different contaminations of edible oils; and the migration from paperboard packaging. Because of this decline, the relative contribution of environmental contamination may have increased. Exact data on what sources were causing mineral oil contamination in food today was still missing, the RIVM said. So far, no tolerable daily intake levels (TDIs) for MOSH or MOAH have been set in the EU but the EFSA is working on a new scientific opinion on the toxicity of MOSH and MOAH, which is expected to be released this year, Papastergiadis told the Practical Short Course in November. The opinion may include a TDI value for MOSH, and a ‘as low an intake as possible’ value for MOAH. Meanwhile, the German Food Federation has a maximum level of 13ppm for MOSH and 1ppm for MOAH.

E SAT DEN CON

Figure 4: Continuous dual temperature deodoriser for low MOSH/MOAH, GE, TFAs u foods and their potential risk to human health has been known since the 1990s, it has only been in the last 10-15 years that it has become the object of more studies to understand its toxicological relevance, improve analytical methods, and to legislate its presence in food, Purcaro told the18th Euro Fed Lipid Congress in October last year. Attention also became widespread in 2008/2009 following the discovery of contaminated sunflower oil in Ukraine.

Exposure and risk

In 2012, the European Food Safety Authority (EFSA) published a scientific opinion on mineral oil hydrocarbons (MOH) in food and although no tolerable daily intake (TDI) for MOH could be established due to insufficient data, it was concluded that exposure to MOH via food intake in Europe was of potential concern. MOAH may act as a genotoxic carcinogen, while some MOSH can accumulate in human tissue and may cause adverse effects in the liver, 32 OFI – MARCH/APRIL 2022

MOSH MOAH.indd 3

according to the Dutch National Institute for Public Health and the Environment (RIVM). In its 2019 report, ‘Mineral Oils in Food: a Review of Occurrence and Sources’, the institute said new studies mostly reported MOSH concentrations of below 10mg/ kg, with the highest mean concentrations of MOSH reported for pasta, cocoa powder, coffee, tea, chocolate flakes and sweets. For MOAH, most measured concentrations were below 0.5mg/kg with some exceptions exceeding 2-3mg/kg in pasta, vegetable oils, chocolate flakes, cocoa and coffee beans. There had been an overall decline of mineral oil contaminations since the 1990s due to the identification of mineral oil contamination sources and mitigation measures, the RIVM report said. Examples of successfully-reduced sources of mineral oil contamination included the use of jute bags treated with batching oil; the application of (white) mineral oils as glazing agents, release agents in industrial bakeries and additions

Source: Desmet Ballestra

MOSH/MOAH mitigation

Avoiding MOSH/MOAH contamination via the environment is very difficult, according to Papastergiadis. During cultivation and harvesting, contamination may occur from machinery oil leaks and exhaust emissions. During transport of seeds and crude or refined oil, cross-contamination may come from the transportation carrier, the use of inappropriate material for storage and transport of seeds (such as jute bags treated with batching oils) and antidusting agents. During oil extraction and refining, leaks may come from processing machinery, and food grade lubricants should be used when possible, as well as non-contaminated processing aids. Contamination may also occur from solvent recovery systems. And during packaging and bottling of final products, material should be used that do not migrate MOH to the oils and fats.

Removal during refining

MOSH/MOAH can be removed during refining but only in the deodorisation step (see Figure 3, above left), Papastergiadis said. Stripping depended on the applied deodorisation conditions (temperature, pressure and stripping steam) and short chain C-fractions of MOSH/MOAH (up to C35) could be removed at levels of up to 80-90%. Successful overall removal depended on the origin of the contamination, with heavier C-fractions remaining problematic. Desmet Balletra supplied the Qualistock+ deodoriser to achieve low levels of MOSH/MOAH, GEs and TFAs,

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which could operate in dual-temperature mode (see Figure 4, left). Papastergiadis said. The integrated packed column stripper offered a short residence time, high temperature (240-2600C) and FFA and MOSH/MOAH stripping with some heat bleaching, The tray type deodoriser operated with a longer residence time, lower temperature (220-2400C) with a final heat bleaching/deodorisation step. Deep vacuum (<2mbar) could be applied by either a closed loop chilled water system or ice condensing to increase stripping. Papastergiadis said that deodorisation under optimised conditions could produce an oil with a bland odour and taste with a good shelf life, low FFAs and good heat bleaching with a light colour. It partially removed MOSH/MOAH but GE levels would be too high. Poststripping was therefore necessary at a lower temperature, with a deep vacuum for maximum MOSH/MOAH and GE removal. An integrated scrubber led to minimum oil carry-over to the vaccum system, with deep vacuum (ice condensing) for efficient GE stripping and fast cooling under vaccum to avoid the reformation of GE and to keep the bland odour and taste.

Source: Desmet Ballestra

MOSH/MOAH CONTAMINANTS

Figure 5: Sublimax 2G ice condensing for deep vacuum deodorising/stripping

Conclusion

MOSH and MOAH are major components of mineral oil products and their presence is abundant and can contaminate oils and fats in all stages of the production chain. The removal of MOSH and MOAH

the industry’s number 1 choice

during refining can only take place in the deodorisation step. Suitable deodorisation conditions can lead to the removal of C-fractions up to C35 but heavier C-fractions remain a challenge. ●

over 37 years COVERING OIL CROPS & ANIMAL FATS The OFI Weekly Newsletters are packed full of the latest industry news and developments. Sign up today to receive your free weekly update at:

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MOSH MOAH.indd 4

OFI – MARCH/APRIL 2022

22/03/2022 09:37:30

PLANT, EQUIPMENT & TECHNOLOGY

Global round-up of projects Oils & Fats International reports on some of the latest projects, technology and process news and developments around the world

BDI updgrades German biodiesel plants for REG

USA: US agribusiness cooperative Ag Processing (AGP) said on 28 January that it was planning to build a new soyabean processing plant near David City, Nebraska. The 50M bushels/ year facility is due to be operational in 2025, subject to regulatory approvals. “Domestic and global demand for soyabean meal and soyabean oil continues to grow,” AGP CEO Chris Schaffer said. “The David City location will also improve our ability to market soyabean meal to the Pacific Rim through our export terminal in Aberdeen, Washington.” Schaffer added that AGP was currently considering investments that would significantly increase its export capabilities to meet the expected growth in domestic protein supply.

Photo: Adobe Stock

IN BRIEF

REG said the upgrading of its two biodiesel plants in Germany would allow it to produce fuel from waste oils

Austrian plant manufacturer BDI-BioEnergy International (BDI) has been commissioned to upgrade two German biodiesel plants for US sustainable fuel producer Renewable Energy Group (REG). Following the upgrade, the plants in Emden and Oeding – with a total capacity of 200,000 tonnes/year – would be able to produce biodiesel from some of the lowest carbon intensity, hardest to convert waste fats and oils, the two companies said on 17 February. The project is located at the North Sea harbour of Emden, Germany, on the border with the Netherlands. It is due to become operational by the end of next year. REG said the project would enhance the two plants’ ability to produce renewable fuel

from a wider variety of feedstocks, including ‘Generation 3’ advanced feedstocks as defined under the EU Renewable Energy Directive (RED) II. “This strategic investment expands our… selection of feedstock options that we run at Emden and Oeding today, and qualifies us to better serve the growing demand for low carbon fuel options in Europe,” REG president & CEO CJ Warner said. REG is one of the largest biodiesel producers in North America, and operates 12 biorefineries in the USA and Europe. Following its acquisition of the two German biodiesel plants in 2017, the company opened a global trading office in Amsterdam to source feedstocks and sell co-products and fuels.

Norfolk Crush latest to announce soya crush project Norfolk Crush, LLC, USA has unveiled plans to build a new US$375M soyabean crushing plant in Madison county near Nebraska, World Grain reported on 3 February. Once operational, the plant would crush 38.5M bushels/year of soyabeans and the company would produce 847,000 tonnes/ year of soya meal, 450M pounds (204M tonnes)/year of crude soyabean oil, and 77,000 tonnes/year of pelleted soyabean hulls. The meal and hulls would be used in livestock feed and the oil for a variety of 2 OFI – MONTH 2018 2022 34 MARCH/APRIL

P&E March.April 2022.indd 2

applications, including renewable diesel. Norfolk Crush was just one of several US soya crushing plants announced over the past 12 months, World Grain wrote. Ag Processing Inc said in January that it would build a new soyabean processing plant in Nebraska (see Brief, above). In December, grain and transportation company CGB Enterprises announced a joint venture with soyabean processing cooperative Minnesota Soybean Processors to build a soya processing plant in North

Dakota which is expected to crush 42.5M bushels of soyabeans in its first year. In December, Continental Refining Co said work had started on its soyabean crushing and biodiesel refining facility in Somerset, which would process up to 84,000 tonnes/year of soyabeans and generate up to 18.9M litres/year of biofuel. In May 2021, agribusiness giant ADM said it would build a soyabean crushing plant and refinery in North Dakota processing 150,000 bushels/day of soyabeans. www.ofimagazine.com www.ofimagazine.com

23/03/2022 10:48:25

PLANT, EQUIPMENT & TECHNOLOGY

Photo: Pixabay

Partnership to produce biodiesel in Panama Green Fuels Ventures (GFV), a subsidiary of UK biofuel technology developer Green Fuels, has signed a Memorandum of Understanding (MoU) with Panama’s Telfer Tanks to expand biodiesel production in the country, Bioenergy International reported on 24 January. The project’s aim is to refine biodiesel and advanced biofuels for the energy, marine, aviation and general transportation sectors from a range of sustainablysourced feedstocks. GFV and Telfer would form a joint venture

company, Triton Green Fuels, to import a 50,000 litres/day FuelMatic GSX50 biorefinery from Green Fuels’ engineering works in the UK, the report said. The joint venture’s initial objective was to establish one or more biodiesel facilities at Telfer’s fuel storage plant and terminal in the Free Trade Zone of the Port of Colón, followed by smaller plants elsewhere in Panama. This would be the first phase for a potential future hydro-treated vegetable oil and sustainable aviation fuel production facility using Green Fuels technology.

US sustainable aviation fuel (SAF) technology provider and producer LanzaJet signed a memorandum of understanding (MOU) on 10 February with Marquis Sustainable Aviation Fuel (Marquis SAF) to build a 120M gallons/year plant in Illinois to produce SAF and renewable diesel via the LanzaJet alcohol-to-jet process. The plant would be located at the Marquis industrial complex in Hennepin. “The facility is strategically positioned for global distribution via direct access to the Illinois River and proximity to vital pipelines to deliver sustainable fuels to Chicago O’Hare International Airport and Chicago Midway International Airport,” LanzaJet said. “We are making investments in carbon capture, corn kernel fibre technology, and are utilising our proprietary system for the production of high protein feed and renewable corn oil in this new state-of-

Photo: Adobe Stock

LanzaJet to build SAF facility in Illinois

LanzaJet and Marquis SAF are building a facility in Illinois to produce sustainable aviation fuel (SAF)

the-art facility,” said Marquis SAF CEO Mark Marquis. Marquis recently announced a plan for the Marquis industrial complex to be carbon-neutral. The complex is sited on the Mt Simon geological formation, with the capacity to store over 100M tonnes of CO2. LanzaJet’s alcohol-tojet technology was initially developed with the US

Department of Energy’s Pacific Northwest National Lab (PNNL), which developed a catalytic process to upgrade ethanol to synthetic paraffinic kerosene (ATJ-SPK). The company recently announced that its first plant in Georgia utilising certified ethanol from waste sources was expected to enter commercial operations in 2023.

Benson Hill to expand in plant-based proteins US food technology firm Benson Hill announced on 4 January that it had acquired ZFS Creston, a food grade white flake and soya flour manufacturing operation in Creston, Iowa. Benson Hill said the US$102M acquisition would lead to the expansion of its plant-based protein ingredients portfolio and represented a final step in its ability to convert its proprietary soyabeans into value-added soya protein ingredients for the human and pet food sectors. www.ofimagazine.com

P&E March.April 2022.indd 3

The Creston operation produced soya meal and oil, as well as food-grade soya white flake, flour and grits, which could be marketed as ingredients or used as raw materials to produce concentrates, isolates and textured protein products. Benson Hill said that with the addition of Creston’s soya white flake capacity, it could offer more sustainable ingredients for the food market – including plant-based meat, bakery, cereal and snack food products – and pet food market.

IN BRIEF AUSTRALIA: US energy technology supplier Honeywell UOP announced on 28 February that it had signed a licensing agreement with British oil and gas corporation BP for its Ecofining technology to be used at BP’s former refinery site in Kwinana, western Australia. BP plans to convert hydroprocessing equipment at the site to produce approximately 10,000 barrels/day of renewable diesel and sustainable aviation fuel (SAF), integrating it with its existing terminal operations. The UOP Ecofining process, developed in conjunction with Italy’s Eni SpA, converts non-edible oils, animal fats and other waste feedstocks to produce renewable diesel and SAF. USA: US energy technology provider ENG reported on 22 February that it had been selected by a confidential client to provide engineering, procurement and construction services for a renewable fuels plant designed to produce approximately 100M gallons (3.5M tonnes)/year of sustainable aviation fuel and renewable diesel. The plant is scheduled to be ready for commissioning in 2024. It will utilise HydroFlex and Hydrogen Bridge technologies from Denmark’s Haldor Topsøe A/S. OFI – MARCH/APRIL 2022

23/03/2022 10:48:31

STATISTICS STATISTICAL NEWS

Mintec

Palm oil prices increase

Global palm oil global supply and demand (million tonne)

The Mintec Benchmark Price (MBP) for EU palm oil increased by 34% month-on-month to a record high of €1,673 tonne on 4 March, driven by a number of factors. In January 2022, the Indonesian government implemented a regulation to curb palm oil exports to fulfil its domestic demand and stop domestic prices from rising further. As Indonesia is the major producer and exporter of palm oil, this Domestic Market Order (DMO) on exports led to supply shortages globally, driving EU palm oil prices. Palm oil exports from Malaysia (a key exporter to the EU) have also remained limited in 2022 due to high fertiliser costs and labour issues. More recently, prices in the vegetable oil complex have been driven by the Russia-Ukraine geopolitical conflict as both regions account for a major share of production and exports of alternative oils – sunflower oil and rapeseed oil. Shipment disruptions and other supply uncertainties stemming from this conflict have therefore put additional upward pressure on palm oil prices.

Mintec

Palm kernel oil prices reach record high

Palm kernel oil prices, cif Rotterdam (€/tonne)

The Mintec Benchmark Price (MBP) for EU palm kernel oil (PKO) reached a record high in March, climbing by 35% month-on-month and 125% year-on-year to €2,706 on 9 March. Similar to the palm oil market, PKO prices have followed an upward trend due to tight supply conditions. In February, the Indonesian government expanded the January Domestic Market Order (DMO) on palm oil exports to include all palm oil products, further supporting prices in the PKO market. Rising input costs and concerns over the conflict between Russia and Ukraine have also been a price driver so far in first quarter 2022.

Mintec

Coconut oil prices hit all-time high

Coconut oil prices, cif Rotterdam (€/tonne)

Prices of selected oils (US$/tonne) Sept 21

Oct 21

Nov 21

Dec 21

Soyabean

1,364.6

1,485.9

1,387.7

Crude palm

1,173.1

1,303.5

1,327.1

Palm olein

1,144.9

1,224.8

Coconut

1,485.2

1,857.9

Rapeseed

1,505.1

Sunflower Palm kernel Average Index

Jan 21

Feb 22

1,383.1

1,421.8

1,537.3

1,265.0

1,320.1

1,497.0

1,234.7

1,147.4

1,223.3

1,422.3

1,898.6

1,781.4

1,928.3

2,145.3

1,745.5

1,696.8

1,729.9

1,773.7

1,666.0

1,313.6

1,412.5

1,412.4

1,385.5

1,390.8

1,510.0

1,370.5

1,797.1

1,941.0

1,743.8

2,017.5

2,262.5

1,337.0

1,543.0

1,558.0

1,491.0

1,582.0

1,720.0

317.0

366.0

369.0

353.0

375.0

408.0

36 OFI – MARCH/APRIL 2022

Stats March.April 2022.indd 1

The Mintec Benchmark Price (MBP) for EU coconut oil rose by 23% month-on-month and 57% year-on-year to an all-time high of €2,123/MT on 9 March. Despite a projected increase in global coconut oil production for the 2021/22 marketing year (up by 2% yearon-year to 3.51M tonnes), EU coconut oil prices have risen due to shortages and a decline in exports of PKO (a close alternative edible oil), in addition to a price rally in the wider vegetable oil complex. The impact of the Russia-Ukraine conflict on sunflower oil shipments has also driven demand and, in turn, prices of EU coconut oil as an alternative edible oil.

Mintec provides independent insight and data to help companies make informed commercial decisions. Tel: +44 (0)1628 851313 E-mail: sales@mintecglobal.com Website: www.mintecglobal.com

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23/03/2022 11:02:29

OFI March/April 2022

Articles inside

The next processing challenge

The enzymatic route

Growth in personal care

World statistical data

Argentina – strong soya sector

China shuts plants due to soyabean shortage

Chevron to buy REG, in joint venture with Bunge

Spring crops face major challenge

Vopak builds storage for Rotterdam bio-refinery

Perfect storm drives up oil values

War in Ukraine

Clariant to sell 50% stake in

Glyphosate production hit by technical issues