OFI February 2022

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OILS & FATS INTERNATIONAL FEBRUARY 2022 ▪ VOL 38 NO 2

EU/BIOFUELS Environmental focus

SUNFLOWER OIL From the Black Sea

ANTIOXIDANTS

Tackling oxidation

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CONTENTS

OILS & FATS INTERNATIONAL

IN THIS ISSUE – FEBRUARY 2022 Antioxidants

FEATURES

NEWS & EVENTS

18

26

Russia and Ukraine are both key global producers of sunflowerseeds. Prior to Russia massing troops on Ukraine’s border, the two countries had been forecast to increase supply and exports of the crop and oil this year

Tackling oxidation Oil oxidation involves a series of chemical reactions that degrade the quality of the oil. Mitigating steps include selecting the right oil for the right application, and using protecting additives and antioxidants

From the Black Sea

Comment

2

Crisis on Ukraine front

News

Transport & Logistics

4

EU/Biofuels

Viterra to buy Gavilon grain/ ingredients unit

Environmental focus The EU’s strong environmental policies are having a major impact on its oils and fats sector

Photo: Adobe Stock

Biofuel News

Photo: Adobe Stock

22

Photo: Adobe Stock

Photo: Adobe Stock

Photo: Adobe Stock

Sunflower oil

29

Gateway to Northeast Africa The Northeast African nations of Djibouti, Eritrea, Ethiopia, Somalia and Sudan are strategically located as inland gateways but poor road and rail infrastructure, armed conflicts and economic constraints have held back development

10

ADM, Marathon finalise renewable diesel deal

Renewable News

12

Evonik to build rhamnolipid surfactants plant

Transport News

14

UCO freight rates set to remain high

Biotech News

16

EPA to reassess risk of dicamba to other crops

Diary of Events

17

International events listing

Statistics

32

www.ofimagazine.com

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World statistical data

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EDITOR'S COMMENT

OILS & FATS INTERNATIONAL

VOL 38 NO 2 FEBRUARY 2022

EDITORIAL:

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UKRAINE

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Editor: Serena Lim serenalim@quartzltd.com +44 (0)1737 855066

Crisis on Ukraine front

Kiev

Kherson

Odessa

Black Sea

As we went to press in mid-February, Russia had massed 100,000 troops on Ukraine’s border, with many concerns about the implications on oilseed, grain and commodity markets if armed conflict does break out.

Ukraine is the world’s largest sunflowerseed producer, as well as the top sunflower oil exporter (see p18). It is also expected to rank No 3 in rapeseed and wheat exports this season.

If Russia were to occupy land east of the Dnieper River, this represents major sunflowerseed, wheat and corn production areas. Occupation may lead to lower production and exports as farmers flee, infrastructure is destroyed and supply chains for inputs and maintenance are disrupted.

Any occupation of Black Sea ports may also affect exports of grain and oilseeds, pushing up prices just as markets are trying to recover from last season’s historic highs.

Global food security is a major concern as more than 40% of Ukraine’s corn and wheat shipments go to the Middle East and African nations. In terms of sunflower oil, Ukraine is expected to export around 6.7M tonnes in this 2021/22 season – mostly to Europe, India and China – but with shipments to Egypt, Lebanon, Sudan and Turkey as well (see p20).

The Black Sea is a key gateway between Asia and Europe and Russia’s annexation of Crimea and the port of Sevastopol in 2014 gave it a warm water port that does not freeze in winter and a naval base for its Black Sea Fleet.

Now, some commentators suggest that Russia may seize a strategic belt of land between itself and Transdniestria (a breakaway state in the narrow strip of land between the Dniester River and the Moldovan–Ukrainian border), which includes all Ukrainian Black Sea ports and the cities of Mariupol, Kherson and Odessa. This would block Ukraine’s access to the sea.

The USA and Europe have threatened financial sanctions if Russia does invade Ukraine including cutting Russia out of the SWIFT financial system (which moves money around the world) or blocking Russia from access to US dollars, which still dominate financial transactions globally. Financial sanctions could make trade more difficult, impacting natural gas, crude oil and agricultural exports. And let’s not forget that Russia is the world’s largest exporter of wheat, the biggest producer of barley, oats and rye, and the second largest producer of sunflowerseed.

For the moment, trading in the region is continuing although both the Ukrainian hryvnia and Russian rouble have fallen by 5%, pushing up domestic prices and reducing traders’ margins. While currency weakness usually encourages exports, it also raises costs for agricultural inputs such as seeds, pesticides, fertilisers, fuel, farm machinery and equipment, many of which are imported.

The world can only watch and wait to see how this crisis plays out.

@oilsandfatsint

Oils & Fats International

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Serena Lim serenalim@quartzltd.com www.ofimagazine.com

09/02/2022 10:25:57

NEWS IN BRIEF UK: Swiss speciality chemicals company Clariant said on 28 December that it had agreed to acquire German chemical giant BASF’s US attapulgite business for US$60M, including a longterm supply agreement for attapulgite-based products to BASF. Attapulgite is a naturally occurring mineral with colloidal, absorbent and adsorbent properties.

BASF’s attapulgite business is one of the largest in North America, with mining operations in Georgia and Florida and processing operations in Quincy, Florida.

The company produces attapulgite-based products for a wide range of applications and sectors, including bleaching earths for edible oils.

Viterra to buy Gavilon grain/ingredients unit Glencore’s agriculture division Viterra has reached an agreement to acquire the grain and ingredients business of US oilseed and ingredients firm Gavilon from Marubeni.

The US$1.125bn acquisition is expected to be finalised in the second half of this year, Viterra said on 26 January.

Gavilon sources, stores and distributes grains, oilseeds and feed and food ingredients to food manufacturers, soyabean processors, and livestock and ethanol producers worldwide.

The company has 105 grain storage facilities and a total grain storage capacity of 345.5M bushels, according to Sosland Publishing’s Grain & Milling Annual 2022. These assets are located in key growing areas in the USA, with access to major railways, rivers and ports. The company is active in Asia, Europe, Mexico and South America, with an indirect ownership interest in two port terminals in Washington and Oregon.

Marubeni, which acquired Gavilon in 2013, said the transaction would not include eight Gavilon grain elevators in northern USA, with those elevators transferring to Marubeni subsidiary Columbia Grain International, World Grain wrote on 26 January. In addition, part of the equity interest of Kalama Holdco, a joint venture grain export terminal business on the US West Coast held by Gavilon, would be transferred to Columbia Grain.

Formerly known as Glencore Agriculture, Viterra has a network of agricultural storage, processing and transport operations. It has 85 grain storage facilities with a total storage capacity of 120.36M bushels in North America, according to the Grain & Milling Annual 2022.

“The addition of Gavilon supports our longterm strategy of significantly increasing our presence in the USA – one of the major producing and exporting regions, ” Viterra said.

An acute shortage of rapeseed supply across Germany has made securing feedstock problematic for oilseed millers and processors, with an estimated 1.4M tonnes of the crop needed to maintain operations, AgriCensus said on 14 January.

The crisis comes against a backdrop of record high rapeseed oil prices, which had promoted oilseed processing amid good crush margins.

“German oil mills are in a critical situation because they are not getting the oilseed material

Photo: Pixabay

Acute rapeseed shortage hits German oilseed sector

needed for processing,” said Stephan Arens, from Germany’s

Union for the Promotion of Oil and Protein Plants.

Last year saw a smaller-than-expected global rapeseed crop, with output falling 7% compared to the five-year average, and a drought in Canada cutting production there, AgriCensus wrote. While the rapeseed crop in Germany was expected to expand by about 80,000ha or 9% compared to last year, factors such as high fertiliser costs and insect problems could affect yields, AgriCensus said.

Germany is Europe’s leading rapeseed producer.

Cargill commits to WHO guide on industrial trans fatty acids Global agribusiness giant Cargill announced on 6 December that it had committed its complete edible oils portfolio to the World Health Organization’s (WHO’s) best practice on industrially-produced trans fatty acids (iTFAs).

Cargill said the move would help the company and its customers comply with the WHO’s recommended standard of a maximum of 2g iTFA/100g fats and oils by the end of 2023.

The WHO's REPLACE initiative provides a guide for governments and industry to implement best practice on iTFA in the 4 OFI – FEBRUARY 2022

General News Feb 2022.indd 2

global food supply chain to address related health concerns.

In making the move, Cargill joins many of the world’s largest food companies and members of the International Food and Beverage Alliance (IFBA) who have committed to the WHO goal.

Over the last 25 years, Cargill said it had removed an estimated 500,000 tonnes of iTFAs from the global food supply, resulting in approximately 89% of its global edible oils portfolio meeting the WHO's iTFA best practice to date.

To achieve the final 11%, Cargill said it

was investing in upgrades at a number of facilities to reduce the amount of iTFAs produced during the oil manufacturing process and developing alternative formulations.

Primarily formed through the partial hydrogenation of vegetable oils (PHO), iTFAs also result from high thermal treatment during the refining process.

Cargill said that while iTFA regulations were in place in some 40 countries, either through PHO bans or limits to maximum amounts of iTFAs in food, they remained a health concern in many locations. www.ofimagazine.com

10/02/2022 11:14:10

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NEWS

Bunge to buy 33% stake in Brazil's Sinagro Global agribusiness giant Bunge has agreed to buy a 33% stake in leading Brazilian grain and agricultural product wholesale firm Sinagro Produtos Agropecuarios (Sinagro) for an undisclosed sum.

A subsidiary of Mumbai-based agrochemical firm UPL, Sinagro has a network of more than 30 stores and warehouses, and operates in seven Brazilian states – Mato Grosso, Mato Grosso do Sul, Goiás, Bahia, Tocantins, Pará, and Minas Gerais – with a significant presence in the country’s Cerrado savannah region.

Bunge – which sources, processes and supplies oilseed and grain products and ingredients globally – expects to use its investment in Sinagro to strengthen its grain strategy in Brazil, according to a 20 January statement by Sinagro.

Last year, Sinagro became one of the first companies to join Bunge’s Sustainable Partnership, an initiative to help grain re-sellers set up socio-environmental assessment systems for suppliers at the farm level. The programme allows participants to adopt independent geospatial imaging

services or have free access to Bunge’s structure.

“This transaction will contribute to Bunge’s grain origination capabilities and to its access to producers in the region,” Bunge agribusiness vice president Rossario de Angelis Junior said.

“In addition, Sinagro and Bunge are closely aligned on their global vision of being the preferred partner in sustainable solutions for oilseeds, commodities, and related ingredients, both for farmers and end customers.”

Production of certified castor seed doubled last year under the Pragati sustainable castor project founded by German chemical and biotech giant BASF, speciality chemicals company Arkema, oleochemical firm Jayant Agro-Organics and implementation partner Solidaridad.

The results of the project’s fifth year published by BASF on 13 January showed that more than 5,800 farmers had been trained, audited and certified – a 27% increase compared to the previous year.

A total of 36,000 tonnes of certified castor seed had been cultivated in 2021 – a 50% rise compared to the previous

IN BRIEF INDIA: Global agribusiness giant Cargill announced on 30 November that it had acquired an edible oil refinery for US$35M in Nellore district, Andhra state.

Due to be fully operational by May, Cargill said the upgrading of the Krishnapatnam Port refinery would give it the capability to supply refined palm oil, palm olein, hydrogenated vegetable oil and sunflower oil. It would also allow it to produce and package its own edible oil brands for retailers and better serve bakery and foodservice customers in the region, Cargill added.

6 OFI – FEBRUARY 2022

General News Feb 2022.indd 3

Photo: Adobe Stock

Project doubles certified castor seed production

In its fifth year, the Pragati sustainable castor project doubled production to 36,000 tonnes in 2021

year. Yield had also improved more than 35% compared to the previous year, with over 13,300ha now being farmed in

accordance with the SuCCESS sustainable castor code.

‘With our joint efforts in this programme, we support the

sustainable production of castor beans that ... increases the yields and income of farmers,’ said Karin Wagner, responsible for castor oil and derivatives procurement at BASF. Pragati is the Hindi word for progress and the project was launched in May 2016.

The Pragati project’s goal is to enable sustainable castor crop production by the use of good agricultural practices to increase yield and farmer income; the efficient use of water resources and maintenance of soil fertility; the adoption of good waste management practices; and better health and safety practices and respect for human rights.

Unilever to cut jobs after failed GSK bid Consumer goods giant Unilever is planning to cut about 1,500 jobs worldwide as part of a reorganisation following its failed bid for a division of global healthcare company GlaxoSmithKline (GSK), the BBC reported on 25 January.

The maker of global brands including Hellmann’s mayonnaise, Magnum and Wall’s ice cream and homecare product Domestos said the move would represent a 5% cut to its workforce.

The company would shift from three to five divisions, comprising Beauty & Wellbeing, Personal Care, Home Care, Nutrition, and Ice Cream.

The announcement followed Unilever’s failed bid to buy GSK’s healthcare business to increase its personal healthcare and hygiene market, in order to offset slow growth in its foods business.

GSK, which owns brands such as Sensodyne toothpaste and Panadol painkiller, said Unilever's offer “fundamentally undervalued” the division.

Unilever announced on 23 January that it would not raise its bid for the GSK arm.

Unilever uses palm oil in many of its products – from food and beauty to its household cleaning range.

According to its website, the company sustainably sourced 99.6% of its core volumes of palm oil and palm kernel oil by the end of 2020.

In 2020, Unilever committed to achieving a zero deforestation supply chain by 2023 for the crops with high deforestation risk (palm oil, paper and board, tea, soya and cocoa).

Soyabean oil is also an important ingredient in Unilever’s brands, including Hellmann’s mayonnaise. On its website, the company said the majority of the soya oil it purchased came from soyabeans grown in the USA, where soil health and water quality were a particular focus for its farmer programmes. www.ofimagazine.com

09/02/2022 17:39:05

NEWS

Amazon deforestation rate doubles in a decade The rate of deforestation in the Amazon has more than doubled in a decade, reaching its highest level in 15 years, Olive Oil Times reported on 4 January.

According to data from Brazil’s National Institute for Space Research (INPE), deforestation rates in the Amazon increased by 22% in 2020/2021. In the first 10 months of 2021, deforestation in the Amazon increased to 13,200km², an area slightly smaller than Montenegro or the US state of Connecticut.

New data from the Greenhouse Gas Emissions Estimates System (SEEG) and

India suspends trading of seven ag commodities The Securities and Exchange Board of India (SEBI) has directed local stock exchanges to suspend trading of seven agricultural commodities for one year in a bid to control rising food prices, World Grain reported on 21 December.

Commodities affected include crude palm oil, soyabean and its derivatives, rice paddy (non-basmati), wheat, chana (chickpeas), mustard seed and its derivatives, and moong (mung beans), according to the SEBI. Following the measure, which took immediate effect, traders would be allowed to square off their positions, but new trades could not be executed, the SEBI said.

The move followed a steep increase in food prices in recent months, World Grain wrote.

No record soya crop for Brazil

the Climate Observatory also showed that Brazil generated gross national emissions of 2.16bn tonnes of CO² equivalent compared to 1.97bn tonnes in 2019.

The destruction of the Amazon rainforest is estimated to have accounted for the 9.5% increase in greenhouse gases recorded in 2020 by the Climate Observatory and represented the country’s highest level of emissions since 2006, the report said.

“Deforestation continues to dominate our emissions, with an upward trend in the very year in which Brazil should start meeting Paris Climate Agreement targets,” Tasso

Azevedo, a climate expert coordinating the SEEG study, said.

The Paris Climate Agreement stipulates the need to keep the global temperature rise to below 2ºC and was approved in 2015 and is supported by 200 countries.

The World Wildlife Fund has estimated that 17% of the Amazon has been destroyed in the past 50 years, mostly due to cattle rancher expansion, Olive Oil Times wrote.

Brazilian president Jair Bolsonaro has said that the deforestation claims have been exaggerated, the report said.

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Soya production estimates in Brazil have been reduced by 11.3M tonnes due to droughts predominant in the south of Brazil and southern Mato Grosso do Sul state since November, AgriCensus quoted local consultancy Agrural on 6 January.

Previously estimated at a record 144M tonnes, the crop had now been reduced to 133.4M tonnes, based on an average yield of 54.8 bags/ha, the lowest since the 2015/16 crop, Agrural added. www.ofimagazine.com

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NEWS INDONESIA: The government is set to temporarily restrict crude palm oil (CPO) exports to combat rising cooking oil prices by forcing producers to prioritise domestic markets, the Jakarta Post wrote on 20 January.

Effective 24 January, CPO exporters needed to show proof of selling CPO domestically each time they applied for export permits, with the restrictions in place for six months, the trade ministry said. All exporters would be subject to the policy, including those that had never supplied the domestic market.

USA: US renderer and renewable diesel producer Darling Ingredients has acquired waste collection and recycling start-up Valley Proteins for about US$1.1bn, Reuters wrote on 28 December. The acquisition would provide Darling with additional feedstock to produce renewable diesel and potentially sustainable aviation fuel.

MALAYSIA: Futures and options exchange Bursa Malaysia Derivatives Berhad (BMD) signed a memorandum of understanding with the Malaysian Palm Oil Certification Council on 14 January to develop sustainability-related initiatives in the palm oil sector.

Malysian Sustainable Palm Oil-certified crude palm oil is currently delivered through the BMD’s Crude Palm Oil Futures (FCPO) and East Malaysia Crude Palm Oil Futures (FEPO) contracts. BMD said that following the implementation of the requirement for FCPO physical delivery on 1 April 2021, some 897,075 tonnes had been delivered through the exchange from April to December last year, a 65.8% increase compared to the same period the previous year.

8 OFI – FEBRUARY 2022

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RTRS announces launch of new standard for corn The Round Table on Responsible Soy (RTRS) has announced the launch of a new corn standard and a new version of its soya standard.

The new RTRS standard for responsible soya production (V.4.0) follows the main definitions of the Accountability Framework Initiative (AFI), particularly those on deforestation and conversion of natural lands and those related to the rights of indigenous peoples, local communities and workers.

It complies with the FEFAC (Federation of European Feed Producers) 2021 sourcing guidelines, making it complementary to the recommendations addressed to feed suppliers and chain partners who wish to source their soya in compliance with the European feed industry requirements for responsible soya production.

RTRS certified producers will have a transition year – from December 2021 – to start applying and adapting to the new version of the standard.

The new RTRS standard for responsible corn production adds to the association’s certification for other commodities.

“Continuous contact with producers confirmed the importance of creating opportunities to extend soyabean certification to other grains, oils and seeds, mainly corn, a crop commonly included in the rotation with soya,” RTRS said.

As an add-on, the new corn standard could not be certified independently from the association’s soya standard, the RTRS said.

To certify corn, producers would have to comply with 14 additional criteria beyond those required by the RTRS soya standard.

Bühler to build insect plant for Agronutris

Photo: Adobe Stock

IN BRIEF

Swiss plant equipment manufacturer Bühler is building Agronutris’ first commercial-scale black soldier fly (pictured) plant in Rethel, France, due to become operational this year.

Bühler said on 16 December that the plant for the French insect producer would be able to process up to 70,000 tonnes/year of organic residues to produce high quality protein for the aquaculture

and pet food sectors.

“With the launch of this new site, Agronutris is entering its industrial deployment stage,” Agronutris CEO Mehdi Berrada said.

Bühler said it would be responsible for the plant’s entire supply chain, including feedstock preparation and a fully-automated larvae growth system featuring climate control, and the delivery of the processing line to transform the grown larvae into protein meal and lipids.

Buhler said the insect protein market for feed was forecast to grow significantly in the next 10 years, with insect feed operators’ total turnover forecast at around US$2.5bn by the end of the decade.

Marubeni to invest in digital blockchain start-up Japanese trading and investment conglomerate Marubeni Corporation announced on 15 December that it had agreed to invest and acquire shares in digital blockchain start-up Covantis.

Geneva-based Covantis was formed in March 2020 to provide a digital trading platform for bulk agri-commodities and became operational early last year. Its founding members are ADM, Bunge, Cargill, Cofco, Louis Dreyfus and Viterra.

“International bulk commodities trading, including grain and oilseed, requires complicated

business workflows including preparing, exchanging, and confirming many physical documents like contracts or certificates between multiple parties throughout the supply chain from supplier to buyer,” Marubeni CEO (Food, Agriculture & Chemicals Group) Akira Terakawa said. “The issue at stake is to improve efficiency, accuracy and transparency.”

Covantis CEO Petya Sechanova said the company’s network had expanded significantly since its launch and it now had 24 clients, over 80 legal entities and hundreds of customers. www.ofimagazine.com

09/02/2022 17:39:15

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BIOFUEL NEWS MALAYSIA: China’s stateowned Shanxi Construction Investment Group is planning to invest in a hydrotreated vegetable oil (HVO) plant in the southern state of Johor, Reuters reported on 13 December.

Shanxi’s overseas department general manager Wang Chongjun said the company was exploring the development of a refinery and related storage facilities at Pengerang Maritime Industrial Park to produce sustainable aviation fuel (SAF), green diesel, and green chemicals. The products would be used to meet the needs of the Chinese market but would also be exported to Europe and the USA, Wang said.

BRAZIL: Soyabean processing volumes are forecast to hold up until at least the first half of this year despite the government’s decision to hold the country’s biodiesel mandate at 10%, trade sources told AgriCensus.

The industry had been expecting a mandate increase from the current 10% to 13% for January/February and 14% from March, the 8 December report said.

Despite the mandate not increasing, high prices for soyabean meal and oil were expected to continue to provide good processing margins, with strong demand for soyabeans looking likely to continue through the first half of 2022, AgriCensus wrote.

USA: The US Department of Agriculture (USDA) has announced a US$800M support package for the biofuels sector – comprising US$700M in COVID-19 relief for producers and US$100M in infrastructure funding to support the use of higher blends of ethanol and biodiesel, Biodiesel magazine reported on 7 December.

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ADM, Marathon finalise renewable diesel deal US refiner Marathon Petroleum Corporation (MPC) and global agribusiness giant Archer Daniels Midland Co (ADM) have finalised a joint venture for the production of soyabean oil to supply growing demand for renewable diesel, ADM announced on 14 December.

Details of the joint venture were first announced in August, when ADM said the Green Bison Soy Processing joint venture would own and operate a soyabean processing complex in Spiritwood, North Dakota, with ADM owning

75% of the company and MPC owning 25%.

Due for completion in 2023, the US$350M facility would source and process local soyabeans and exclusively supply the soyabean oil produced to MPC, ADM said.

With a production capacity of approximately 272,155 tonnes/year (600M pounds/year), the Spiritwood complex is expected to supply feedstock for approximately 284M litres/year (75M gallons/year) of renewable diesel, according to the ADM statement.

Exxon Mobil in algae biofuel venture Multinational oil and gas company ExxonMobil has teamed up with privately-held biotechnology firm Viridos – previously known as Synthetic Genomics – to produce biofuel from algae.

The two companies signed a joint agreement for the commercial production of Viridos’ low-carbon intensity biofuels, Viridos said on 19 November.

“In this next phase of the programme, we intend to broaden participation and invite others to build the ecosystem required for full-scale deployment,” Viridos CEO Dr Oliver Fetzer said.

In addition to their use in heavy transport, the algae biofuels could be used for aviation, commercial trucking and maritime shipping.

The terms of the partnership with ExxonMobil should also allow other interested parties access to Viridos’ technology, Viridos said.

“Our research with Viridos is one facet of our approach to help society identify and deploy the biofuels needed to reduce emissions from

Photo: Adobe Stock

IN BRIEF

ExxonMobil says advanced biofuels could minimise impacts on land, fresh water and food supplies

important sectors of the economy, including heavy duty transportation,” ExxonMobil vice president of Research and Development Vijay Swarup said.

No food impact from advanced biofuels Growing demand for biomass-based diesel advanced biofuels can be met with projected supply of lipid feedstocks until 2030 without affecting food resources, according to a new study commissioned by the Advanced Biofuels Association (ABFA).

In the study, LMC International looked at the outlook for lipid feedstock supply to see if it could meet ABFA’s objectives for carbon reduction by reaching 21bn gallons (80bn litres) of biomass-based diesel by 2040, ABFA said on 7 December.

Total global lipid feedstock supply is expected to increase from 246M tonnes in 2020 to 330M tonnes in 2030, according to the LMC study.

To reach ABFA’s 2040 target, production would need to reach close to 34bn litres in 2030, requiring 32M tonnes of lipids.

Feedstock supplies in the USA were found to be sufficient to meet the forecast demand after accounting for food.

Soyabean oil had the most potential for growth in the USA, while prospects for waste oils were limited due to the fact

that collection and extraction rates were already high.

Outside the USA, there was more scope for growth in waste oil supply in countries with less developed collection networks.

Global demand for non-biofuel end uses (food, feed and chemicals) was forecast to rise from 168M tonnes in 2020 to 210M tonnes in 2030, the LMC International report said.

Lipid biofuels demand in the four key biofuel consuming countries was forecast to reach 51M tonnes in 2030, up from 24M tonnes in 2020. www.ofimagazine.com

08/02/2022 09:35:11

RENEWABLE NEWS

Evonik to build rhamnolipid surfactants plant Speciality chemical company Evonik announced on 14 January that it will build a new production plant for bio-based rhamnolipids in Slovakia, due to become operational in two years.

Evonik said the investment at the Slovenská Ľupča site strengthened its partnership with consumer goods group Unilever, which began in 2019. It would also allow Evonik to further expand its market position in the growing biosurfactants market.

“We invest more than US$454M a year

THAILAND: Construction engineering firm Thyssenkrupp Uhde Thailand announced on 12 January that it had been awarded a contract for an esterification plant by a leading oleochemical and speciality chemical producer in Asia.

Due for completion this year, the plant would use Thyssenkrupp Uhde’s proprietary Jet Reactor technology and produce medium chain triglycerides (MCTs) for use in the food and personal care industries for an unnamed client, the company said.

THE NETHERLANDS: Renewable chemistry technology company Avantium has signed a supply agreement with sugar and starch producer Tereos for its 5,000 tonnes/year flagship plant in Delfzijl producing 2,5-furandicarboxylic acid (FDCA), a key feedstock for the plant-based plastic material polyethylene furanoate (PEF).

Avantium said its plant would be the world’s first factory producing FDCA on a commercial scale.

“This partnership combines Tereos’ track record in cereal processing and green chemistry with the expertise of Avantium in the field of biobased polymers,” Tereos CEO (global starch & sweeteners) Christophe Lescroart said.

Tereos operates a plant in Aalst, Belgium producing starch and sweeteners.

12 OFI – FEBRUARY 2022

Renewable news fEB 2022.indd 2

replace fossil carbon in all cleaning products by 2030,” Unilever executive vice president (Middle Europe) Peter Dekkers said.

Evonik’s life sciences division, Nutrition & Care, has also set a goal to increase its share of system solutions from the current level of 20% to more than 50% by 2030.

“With the construction of the world’s first industrial-scale production facility, we can supply this rapidly growing market,” head of Evonik’s Nutrition & Care division Johann-Caspar Gammelin said.

Cargill to buy Croda business units Global agribusiness giant Cargill has agreed to acquire the majority of speciality chemical company Croda’s performance technologies and industrial chemicals business for US$1.03bn.

Cargill said on 22 December that the acquisition would expand its bio-industrial presence and it would gain production facilities across Europe and Asia, along with a technology portfolio in the automotive, polymer and food packaging sectors.

The deal was expected to close this summer and in line with Cargill’s commitment to sustainability, more than two-thirds of the raw materials used to manufacture products in these sectors would be biobased and renewable.

The acquisition followed other recent moves by Cargill to expand its presence in the bio-industrial sector, including its acquisition of Floratech,

Photo: Adobe Stock

IN BRIEF

in our research and development,” Evonik chief innovation officer Harald Schwager said. “The journey of rhamnolipids from the initial idea to the finished product has been long, but it is worth it.”

Produced by the fermentation of sugar, rhamnolipids are biosurfactants and can be used as an alternative to fossil carbon in a range of applications from cleaning agents to personal care.

“Rhamnolipids are an important part of our Clean Future initiative which [aims] to

Cargill said more than two-thirds of the raw materials used to manufacture its bio-based products would be renewable

a leading provider of natural emollients and derivatives for beauty and personal care applications, and Arkema’s epoxides business.

Croda produces and sells speciality chemicals for a range of sectors including

consumer care, life sciences and performance technologies. These include vegetable-based stearic acids, castor oil ethoxylates, polymeric surfactants, ethoxylated fatty alcohols, fatty amides and esters, and speciality polymers.

RSPO-certified products from Peter Greven Leading oleochemical producer Peter Greven has switched three further product lines to Roundtable on Sustainable Palm Oil (RSPO) Mass Balance certified fatty acid, effective from 1 January.

The company said the move covered its Ligamed, Ligafeed and Palmstar product lines and followed its earlier shift to RSPO-certified fatty acid in its Ligafood product line in 2018.

Peter Greven has production facilities in Germany, Malaysia, the Netherlands and the USA. Its product range includes metallic and alkaline soaps, esters, dispersions and fatty acids and glycerine.

The RSPO has several models for the supply of certified palm oil.

In the Identity Preserved (IP) model, sustainable palm oil is kept separate from ordinary palm oil throughout the supply chain. Under the Segregated model, sustainable palm oil from different certified sources is kept separate from ordinary palm oil throughout the supply chain.

In the Mass Balance scheme, palm oil from certified sources is mixed with ordinary palm oil throughout the supply chain, with the purchase of certified palm oil matching the sale of certified products. www.ofimagazine.com

08/02/2022 12:01:41

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OFI – FEBRUARY 2022

13

TRANSPORT NEWS

UCO freight rates set to remain high Freight rates for used cooking oil (UCO) nearly doubled through 2021 and while there are concerns that this market could face demand destruction, high prices, tight supply and a lack of alternative products suggest that demand will remain on track this year, according to leading shipbroker Simpson Spence Young (SSY) in its 2022 Outlook Report, published on 21 January.

SSY wrote that sulphuric acid, phosphoric acid and UCO were major bulk commodities and very important for the chemical tanker fleet, with Asia being a key supplier of sulphuric acids and UCO, and freights for both nearly doubling through 2021.

“Moreover, competition for other chemical and edible oil cargoes has been reduced, boosting freights for those.”

SSY said the situation in China would

USA: Independent US liquid fuels storage provider Chemoil Terminals has been bought by an unnamed investor group and would now be known as Olympus Terminal, Business Insider reported on 20 December.

Headquartered in Long Beach, California, Chemoil Terminals is the second largest independent petroleum storage provider in southern California for a range of refined products including diesel, renewable diesel, biodiesel and gasoline, according to the report.

The company operates two terminals — the Carson Terminal and the Long Beach Marine Terminal— that are connected by an extensive pipeline network.

Panamax vessels, which can carry 60,000100,000 dwt of cargo, as well as on smaller Handymax (35,000-50,000dwt) or Supramax carriers (50,000-60,000dwt).

“In early January 2020, a 38,000 dwt Handysize bulker would have earned an average of around US$12,000/day, and a Supramax potentially a little less,” the SSY report said. “As we neared mid-2021, we saw rates of around US$28,000 and US$32,500 respectively.”

This also resulted in the more than doubling of prices for vessels.

SSY chairman Mark Richardson said COVID would continue to have an effect in 2022. “In sectors where pricing has been vulnerable to weakness, it dampens growth prospects and where there is supply tightness, it adds uncertainty and stokes volatility.”

New storage and rail facility for camelina Global Clean Energy Holdings (GCEH) plant science subsidiary Sustainable Oils is planning to build a storage and rail loading facility for its camelina in the first quarter of 2022.

Sustainable Oils said on 19 November that the 600,000 bushel storage facility in Havre, Montana, USA, would expand its presence in the region and create logistical advantages during camelina harvest for both the company and its contract growers.

“A dedicated grain facility in Havre provides regional contract growers added convenience and flexibility for delivery and storage of harvested camelina,” Sustainable Oils president Mike Karst said.

“With our adjacent proximity to the CHS Big Sky-Havre rail

Photo: Rothamsted Research

IN BRIEF

have a large impact on tonnage availability.

“Chinese authorities have placed restrictions on how many foreign ships a pilot is permitted to board, and the length of time the pilots must remain in quarantine afterwards. This has led to a shortage of pilots, and while berthing delays at some ports have eased, the more popular ports remain heavily congested and this situation will continue into 2022.”

Edible oils account for about a third of the seaborne chemical tanker trade.

In the dry bulk market, vessel earnings across all main bulker sizes in 2021 jumped to 13-year highs, with smaller bulkers suddenly in demand for both container and de-containerised cargoes due to chronic capacity shortages in the container market.

Oilseeds are usally transported on

Sustainable Oils aims to secure contracts to grow more than 400,000ha of its camelina varieties in Montana and the High Plains in the USA

siding, we will be able to directly load unit trains of our grain to streamline transportation logistics to GCEH’s biorefinery in Bakersfield, California, or other extraction plants.”

ExxonMobil has made a five-year commitment to purchase up to 832M litres of renewable diesel produced at GCEH’s Bakersfield refinery, said Sustainable Oils.

Stanlow Terminals to develop UK’s largest biofuels hub Independent bulk liquid storage provider Stanlow Terminals announced on 13 December that it is set to develop the UK’s largest biofuels storage hub over the next three years.

The 300,000m³ facility at the Stanlow Manufacturing Complex and Tranmere Terminal, in the Port of Liverpool, would 14 OFI – FEBRUARY 2022

Transport news fEB 2022.indd 2

allow the storage, blending and distribution of biofuels for use in the road, aviation and marine sectors, the company said.

Although the services offered

by Stanlow Terminals currently included biofuels storage, the company said the new facility would support the growth of sustainable aviation fuel (SAF)

and hydrotreated vegetable oil (HVO) initiatives and would include waste-based feedstock import facilities, blending and capacity expansion for existing bio-ethanol and bio-methanol.

Additional storage investment opportunities for low carbon energy products, such as e-fuels, bio-LPG, bio-methane,

hydrogen and ammonia were all progressing through feasibility studies, the company said.

Earlier in 2021, Stanlow Terminals joined forces with parent company Essar and Fulcrum BioEnergy to develop a storage facility at Stanlow for SAF manufactured from non-recyclable household waste. www.ofimagazine.com

08/02/2022 09:50:55

BIOTECH NEWS INDIA: The government has rejected calls to extend the import date for shipments of 1.2M tonnes of genetically modified (GM) soyabean meal beyond 31 January, AgriCensus reported.

New Delhi had announced in August that it would allow the imports to compensate for a supply shortage and to regulate domestic prices, and the poultry industry had lobbied to extend the date of shipments to 31 March.

However, the Soybean Processors Association had opposed the extension, arguing that there was now adequate domestic supply, AgriCensus wrote.

ITALY: Belgian agricultural technology firm Biotalys said on 12 January that it had entered a partnership with Italy's Olon to produce its new bio-fungicide, Evoca.

Olon would produce Evoca’s active ingredient at its biotech manufacturing sites in Capua and Settimo Torinese.

Biotalys said Evoca – the first protein-based biocontrol in its portfolio – was aimed at providing growers with a new rotation partner in integrated pest management (IPM) programmes and helped control diseases such as Botrytis and powdery mildew, reducing the dependency on chemical pesticides.

Evoca is pending registration in the USA and Europe and is not currently on sale.

EPA to reassess risk of dicamba to other crops The US Environmental Protection Agency (EPA) is assessing if dicamba herbicide can be sprayed on soyabean and cotton plants genetically engineered to resist the chemical, without posing “unreasonable risks” to other crops, according to an Insurance Journal report.

Farmers and scientists had reported problems with dicamba drifting away from where it was sprayed on fields, causing damage to plants whose genes had not been modified to resist the weedkiller, the 22 December report said.

In 2021, the EPA said it had received about 3,500 reports that more than 404,685ha of non-dicamba-tolerant soyabean crops had allegedly been damaged when the chemical drifted from where it was applied. Trees and crops including rice and grapes also suffered damage.

“Right now we don’t know whether overthe-top dicamba can be used in a manner that doesn’t pose unreasonable risks to non-target crops and other plants,” Michal Freedhoff, assistant administrator for the EPA’S Office of Chemical Safety and Pollution Prevention said.

Any regulatory changes would probably not be fully implemented by the 2022 growing season, the EPA said, adding that it would work with states that wanted to impose further restrictions.

A US appeals court had blocked dicamba sales in June 2020, ruling that the EPA had substantially understated risks related to its use. Four months later, the EPA – under former US president Donald Trump – re-authorised the use of dicamba-based weedkillers with new restrictions, invalidating the court ruling, the report said.

China set to approve more GM corn The Chinese leadership is planning to approve more genetically modified (GM) corn varieties produced by domestic companies, Reuters reported the country’s agriculture ministry as saying.

At the end of 2021, Beijing proposed an overhaul of regulatory seed rules to pave the way for approval of GM crops, with top policy-makers urging progress in biotech breeding, the 28 December report said.

The three new corn products include ND207 produced

by China National Tree Seed Corp and China Agricultural University; Zheda Ruifeng 8 made by Hangzhou Ruifeng Biotech Co; and DBN3601Tfrom Beijing Dabeinong Biotechnology Co, according to a

Photo: Adobe Stock

IN BRIEF

Plans to approve three newoffered GM corn varieties and seven new GM Calyxt says seedless hemp improved yields and quality cotton crops have been open for public comment until 17 January

notice posted on the website of the Ministry of Agriculture and Rural Affairs.

Safety approval was viewed as a major step towards the commercialisation of GM crops, Reuters wrote, but it

was still unclear when the new products would be ready for market launch.

To date, Beijing does not permit the planting of GM soya or corn varieties but allows their import for animal feed.

Supreme Court seeks Biden view on Bayer weedkiller appeal The US Supreme Court has asked president Joe Biden’s administration for its views on whether to hear a bid by German pharmaceutical and chemical giant Bayer to dismiss claims by customers who claim its Roundup weedkiller causes cancer, Insurance Journal wrote on 13 December.

Bayer has faced billions of dollars worth of Roundup-related lawsuits since acquiring the brand as part of its US$63bn purchase of agricultural seeds and pesticides 16 OFI – FEBRUARY 2022

Biotech news Feb 2022.indd 2

company Monsanto in 2018.

In August 2021, it filed a petition with the Supreme Court to reverse a lower court decision that upheld US$25M in damages awarded to California resident Edwin Hardeman, a Roundup user who blamed his cancer on the glyphosate-based herbicide.

US solicitor general Elizabeth Prelogar is due to file a brief expressing the administration’s views in the coming months,

according to the Insurance Journal report.

Bayer said it was encouraged by the court’s announcement, which often indicated that the justices were interested in hearing a case, the report said.

Facing more than 25,000 related unsettled claims, Bayer said that the cancer claims over Roundup and glyphosate went against sound science and product clearance from the US Environmental Protection Agency (EPA). www.ofimagazine.com

08/02/2022 10:00:04

DIARY OF EVENTS 7-9 March 2022 Palm and Lauric Oils Price Outlook Conference (POC) 2022 Shangri-La Hotel Kuala Lumpur, Malaysia www.pocmalaysia.com 14-16 March 2022 15th Annual International Biomass Conference & Expo Jacksonville, Florida, USA www.biomassconference.com/ema/ DisplayPage.aspx?pageId=Home 22-25 March 2022 Australian Industrial Hemp Conference Tasmania, Australia https:// australianindustrialhempconference.com

POC 2022 live in Malaysia Be part of the annual global gathering of the palm and edible oils industry professionals at the 33rd Palm and Lauric Oils Conference & Exhibition (POC2022).

This event will be held from 7-9 March 2022 physically in the Shangri-la Hotel, Kuala Lumpur, Malaysia.

The highly anticipated annual event organised by Bursa Malaysia Derivatives (BMD) is attended by key decision makers and thought leaders in the global edible oils industry.

“POC2022 provides valuable networking opportunities and a platform for its participants to deliberate on topics surrounding the supply and demand of major

edible oils, learn the market trends, get updates on the latest price forecasts and discuss trade possibilities,” BMD says.

BMD is a wholly-owned subsidiary of Bursa Malaysia Berhad which provides, operates and maintains a futures and options exchange. It operates the most liquid crude palm oil futures (FCPO) contract in the world, consolidating Malaysia’s position as the centre for palm oil price discovery.

For POC2022 enquiries, contact:

23-25 May 2022

5-6 July 2022

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

13th Biofuels International Conference & Expo Brussels, Belgium https://biofuels-news.com/conference/ biofuels/biofuels_index_2022.php

Bursa Malaysia Derivatives Berhad E-mail: poc@bursamalaysia.com Website: www.pocmalaysia.com

27-28 April 2022 10th European Algae Industry Summit Grand Hotel Reykjavik, Iceland www.wplgroup.com/aci/event/europeanalgae-industry-summit/ 1-4 May 2022 AOCS Annual Meeting & Expo Atlanta, Georgia, USA https://annualmeeting.aocs.org 8-10 May 2022 Globoil International 2022 Dhaka, Bangladesh www.globoilinternational.com 10-11 May 2022 12th World Surfactants Congress Jersey City New Jersey, USA www.icisevents.com/ehome/ worldsurfactants/home/ 10-12 May 2022 FENAGRA – Brazilian Rendering Congress Campinas, São Paulo, Brazil www.fenagra.com.br 17-19 May 2022 GrainCom22 President Wilson Hotel, Geneva, Switzerland www.graincomevents.com 18-19 May 2022 Oleofuels 2022 Marseille, France www.wplgroup.com/aci/event/oleofuels www.ofimagazine.com

Diary Feb 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 13-15 June 2022 2022 International Fuel Ethanol (FEW) Workshop & Expo Minneapolis, USA www.fuelethanolworkshop.com/ema/ DisplayPage.aspx?pageId=Home 20-23 June 2022 20th International Sunflower Conference Novi Sad, Serbia www.isasunflower.org/news-events/ news/article/20th-internationalsunflower-conference-novi-sad-serbia1%EF%BB%BF

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

23 August-3 September 2022 World Congress on Oleo Science (Online) https://jocs.jp/en/conference-meeting 8-9 September 2022 High Oleic Congress 2022 Madrid, Spain http://higholeicmarket.com/hoc-2019/ 12-16 September 2022 oils+fats@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 – FEBRUARY 2022

17

08/02/2022 10:05:38

Photo: Adobe Stock

SUNFLOWER OIL

From the Black Sea Russia and Ukraine are both key global producers of sunflowerseeds. Prior to Russia massing troops on Ukraine’s border in December, the two countries have been forecast to increase supply and exports of the crop and oil in the 2021/22 marketing year Svetlana Kyrchok Black Sea region:

Forecast of sunflower seed production in 2021, mln tonnes production forecast the world in 2021 +15% y.o.y. 2020

Share of Black Sea region in global sunflower seed production in 21/22MY

Ukraine

17.0

Russia Other 31%

9% –

share of sunflower seed in the overall production and consumption of oilseeds in the world in 2021.

(8% in 2020)

10% –

share of sunflower oil in the overall production and consumption of vegetable oils in the world in 2021.

(9% in 2020)

Black Sea region 69%

share of sunflower oil in the global export of vegetable oils in 2021.

(12% in 2020)

15.1

Romania Bulgaria

2.0

Turkey

1.8

Moldova

Ukraine

1.0

7.1

Russia

3.0

5.7

EU

3.9

Turkey Moldova

1.2 0.2

Production of sunflower seed in Black Sea region in 2021, mln tonnes

Share of Ukraine and Russia in global sunflower seed production in 21/22MY

Other 44%

15% –

ТOP producers of sunflower oil in Europe in 2021/22 MY, mln tonnes

TOP producers of sunflower seed in the Black Sea region in 2021, mln tonnes

Ukraine 30%

Russia 26%

2020/21 – 0,6 2021/22 – 1,0

2020/21 – 13,9 2021/22 – 17,0

2020/21 – 2,07 2021/22 – 2,96

2020/21 – 13,3 2021/22 – 15,1

2020/21 – 1,73 2021/22 – 2,01 TURKEY

Figure 1: Forecast of sunflowerseed production in 2021 (million tonnes)

Source: Oil World, USDA, APK-Inform

18 OFI – FEBRUARY 2022

Sun oil with French ad.indd 2

2020/21 – 1,6 2021/22 – 1,8

Source: APK-Inform

57.7 mln tonnes – sunflower seed

Ukraine and Russia are the key sunflowerseed producers in the Black Sea region and account for over half of global production of the crop.

In 2021, Ukraine is forecast to produce 17M tonnes of sunflowerseed and 7.1M tonnes of sunflower oil, while Russia is projected to produce 15.1M tonnes of the oilseed and 5.7M tonnes of the oil, APK-Inform’s Fat and Oil Industry 2021 conference held on 3 November heard (see Figure 1, left).

Together, the two countries were set to account for 56% of the world’s 57.7M tonnes of sunflowerseeds produced last year (see Figure 1, left).

Other key sunflowerseed producers in the Black Sea region include Romania (around 3M tonnes production forecast for 2021/22); Bulgaria (2M tonnes), Turkey (1.8M tonnes) and Moldova (1M tonnes).

Globally, sunflowerseed was set to experience a 14-15% rise in production, against a 4% increase in overall oilseed growth, Svetlana Kyrchok, an oilseed analyst at APK-Inform said.

However, this would be only a 9%  share in the overall production and www.ofimagazine. com

09/02/2022 10:29:52

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OFI – FEBRUARY 2022

19

SUNFLOWER Shift of sunflowerOIL seed planted areas and processing capacities in Ukraine Concentration of potential sunflower

capacities in Ukraine, % Shift of sunflower seed planted areas and processing capacitiesseedinprocessing Ukraine 0% 5% 10% 15% consumpti 20% on of oilseeds worldwide in  Concentration of potential sunflower Odesa 2021; a 10% share in overall production seed processing capacities in Ukraine, % Mykolaiv and consumption of vegetable oils Kropyvnytsky globally; and a 15% share in the total Dnipro global exports of vegetable oils (see Figure Zaporizhzhia 1, previous page).

0%

5%

10%

15%

20%

Odesa

Mykolaiv

Kropyvnytsky Dnipro

Khmelnytsky

Zaporizhzhia Khmelnytsky

Vinnytsa

Vinnytsa

Kharkiv

Kharkiv

Donetsk

Donetsk

Ukraine

Poltava

Poltava Kherson

Source: APK-Inform

Kherson Kyiv

Kyiv Lviv

Lviv

Chernigiv

Chernigiv

Lugansk

Lugansk

Other

Other

Ukraine:

Figure 2:forecast Ukraine - Sunflowerseed planted areas and processing of sunflower seed production and distribution in 2021 capacities Source: APK-Inform, State Statistics Service of Ukraine

Source: APK-Inform, State Statistics Service of Ukraine

16.6 mln tonnes – sunflower

16.2 mln tonnes – sunflower

+21%

21%

seed production forecast in 21/22

Dynamics of average bid prices of sunflower seed in Ukraine, UAH/t, CPT 17/18

seed processing forecast in 21/22 МY

18/19

19/20

20/21

21/22

26000 24000 22000 20000 18000

16104

13750

16634

21%

Processing, thsd tonnes

15873

13352

16162

21%

53

191

263

38%

8000

Dynamics of average prices of Ukrainian sunflower oil, USD/t, FOB offer

bid

1750 1500 1250

record production and processing of sunflower seed in 21/22 MY

1000 750

Monthly and seasonal dynamics of sunflower seed crushing in Ukraine in Figure 3: Ukraine – vs Sunfl owerseed 2021/22 2020/21, thsdproducti tonnes on forecast, dynamics of average prices

Sep-21

Jul-21

May-21

Jan-21 Mar-21

Jul-20

Sep-20

Nov-20

May-20

Jan-20 Mar-20

Jul-19

Sep-19

Nov-19

Jan-19 Mar-19

May-19

Sep-18

Nov-18

Jul-18

Jan-18 Mar-18

May-18

Sep-17

Nov-17

Jul-17

May-17

Sep-16

Nov-16

Jan-17 Mar-17

500

*Forecast Source: APK-Inform

Monthly dynamics, thsd tonnes 2020/21

2021/22

Seasonal dynamics, mln tonnes Overall over 3 seasons

12.0

1,000

10.0

800

8.0

600

6.0

400

4.0

200

2.0

0

0.0

•

Jul

Jun

May

Mar

Jan

Dec

Oct

Aug

1,200

Apr

14.0

Feb

16.0

1,400

Nov

18.0

1,600

Sep

1,800

16.2

15.9

15.0

13.6

13.4

17/18

18/19

19/20

20/21

21/22*

In September 2021/22 MY, Ukrainian processors crushed the lowest volume of sunflower seed for this month since 2018/19 MY

Sunflower oil stocks as of thesunfl first day of month, thsd tonnes crushing dynamics Figure 4: Ukraine – of Monthly and seasonal owerseed Dynamics sunflower oil production and export in Ukraine 200

Source: APK-Inform

•

Source: APK-Inform

Production, thsd tonnes

10000 Jul

16%

Aug

24,6

Jun

21,2

Apr

27,0

May

Yield, c/ha

12000

Mar

6%

Jan

6830

Feb

6457

Dec

6000

14000

Oct

Planted areas, thsd ha

Export, thsd tonnes

16000

21/22 to 20/21

21/22*

Nov

20/21

Sep

19/20

150

production forecast in 21/22 0

+23%

Oct

0.5 mln tonnes – sunflower oil

6.7 mln tonnes – sunflower oil

+0,3%

+28%

domestic consumption in 21/22 МY

Nov

Dec

Jan

Feb 2019/20

*Forecast Source: APK-Inform

Sunflower oil export geography in September-October, thsd tonnes

export in 21/22 МY

Mar

Apr

2020/21

May

Jun

Jul

Aug

2021/22

Seasonal dynamics of sunflower oil production, mln tonnes

Dynamics of sunflower oil production, thsd tonnes

800 700

5.7

600

6.5

Sep

Europe

5.8

73

China

500

Egypt

200 100 0

Sep

Oct

Nov

Dec

Jan 2019/20

Feb

Mar

2020/21

Apr

May

Jun

Jul

Aug

17/18

18/19

19/20

20/21

21/22*

Saudi Arabia

2021/22

Seasonal dynamics of sunflower oil export, mln tonnes

Sunflower oil export from Ukraine, thsd tonnes 800 700 5.3

600

6.0

6.7

6.6 5.3

300

0

2021/22

Sudan

7 6 5

2019/20

Turkey

5 0 0.1

Other Sep

Oct

Nov

Dec

*Forecast Source: APK-Inform

Jan 2019/20

Feb

Mar

2020/21

Apr

May

Jun

Jul

Aug

17/18

18/19

19/20

20/21

21/22*

2021/22

Figure 5: Ukraine – Dynamics of sunflower oil production and exports

20 OFI – FEBRUARY 2022

Sun oil with French ad.indd 3

20 15 6 7 5 7

200 100

24

Lebanon

500 400

3 1

292 290

190 168

400 300

279

240

India

7.1

7.0

205 204

2020/21

57

113 111

Source: APK-Inform

100

7.1 50 mln tonnes – sunflower oil

Sunflowerseed accounts for 23% of the general planted area in Ukraine with a larger share of the crop in the eastern and southern areas of the country (see Figure 2, left).

Processing capacities are concentrated in Odessa, Mykolaiv and Dnipro, which are connectable to, or are on the Black Sea. Ukraine was set for record production and processing of sunflowerseed in the 2021/22 marketing year, the conference heard.

Its planted area was projected to be 6,830,000ha, up 6% compared with 6,457,000ha in 2020/21 (see Figure 3, left).

Yields were also forecast to be up 16%, production and processing up 21% and exports up by 38% to total 263,000 tonnes, against 191,000 tonnes in 2021/21.

High prices in spring 2021 of around US$1,600-1,700 tonne had been a big stimulus for growth, Kyrchok said.

Although the weather in 2021 was not perfect – being too rainy in the summer – the country was forecast to produce 16.2M tonnes of sunflowerseed for 2021/22, a rise of 21% compared with the previous year.

Delays in harvesting because of a cold spring and delays in the sale of seeds meant that crushing had been slow, the conference heard.

“In September 2021, Ukrainian processors crushed the lowest volume of sunflowerseeds for this month since 2018/19,” Kyrchok said (see Figure 4, left).

Stock reserves at ports, meanwhile, were quite high as processors waited to sell their oil at the best possible price (see Figure 4, left). This meant exports were also quite low in September-October 2021 (see Figure 5, left).

Ukraine consumed around 0.5M tonnes of sunflower oil of the 7.1M tonnes of the sunflower oil it produces, according to Kyrchok (see Figure 5, left).

This meant its export volumes were key, with its main markets being Europe, India and China.

The country’s total sunflower oil exports were forecast to reach 6.7M tonnes in 2021, a significant rise of 28% compared with 2020/21 but close to export levels of 6.6M tonnes in 2019/2020 (see Figure 5, left). www.ofimagazine.com

09/02/2022 10:29:54

SUNFLOWER OIL

Dynamics of sunflower oil production and export in Russia

Russia

6.4 mln tonnes – sunflower oil

2.6 mln tonnes – sunflower oil domestic consumption in 21/22 МY

production forecast in 21/22

Russia’s sunflowerseed hectarage accounted for 12% of the country’s total planted area in 2021 with its crushing capacity concentrated in its central and southern regions, the Fat and Oil conference heard.

The country had a difficult year in 2021 with a poor yield due to drought particularly in the key growing region of Nizhny Novgorod and Volga, Kyrchok said.

For 2021/22, sunflowerseed production was forecast at 15.2M tonnes, lower compared with the previous season’s total of 13.3M tonnes (see Figure 6, below).

As in Ukraine, delays in harvesting and the sale of seeds had contributed to rising prices and lower crushing volumes.

For 2021/22, Russia is forecast to produce 6.4M tonnes of sunflower oil (a rise of 12% over the previous year), and will export 3.7M tonnes of the oil, a 14% increase year-on-year, according to Kyrchok (see Figure 7, right).

Domestic consumption of the oil is projected at 2.6M tonnes, a 5% increase compared with 2020/21.

+12%

3.7 mln tonnes – sunflower oil

278 thsd tonnes – sunflower oil

+14%

-22% to Sep 2020

production in September 21/22 МY

export in 21/22 МY

+5%

Seasonal dynamics of sunflower oil production, mln tonnes

Dynamics of sunflower oil production, thsd tonnes

6.4

700 600

4.5

500

6.4

5.7

4.9

400 300 200 100 Sep

Oct

Nov

Dec

Jan

Feb

2019/20

Mar

2020/21

Apr

May

Jun

Jul

Aug

17/18

18/19

19/20

20/21

21/22*

2021/22

Seasonal dynamics of sunflower oil export, mln tonnes

Sunflower oil export from Russia, thsd tonnes 600

4.0

500

3.7

3.3

400

2.2

300

2.6

200 100 0

Sep

Oct

Nov

Dec

Jan

Feb

2019/20

Mar

2020/21

Apr

May

Jun

Jul

Aug

17/18

18/19

19/20

20/21

21/22*

2021/22

*Forecast Source: APK-Inform

Figure 7: Dynamics of sunflower oil production and exports in Russia

Source: APK-Inform

0

Season ahead

Looking ahead to the 2021/22 season, Kyrchok said that although there would be a higher sunflowerseed crop in the Black Sea region, slow farmer sales to keep prices high would keep processing and exports limited temporarily. However, increased demand for all vegetable oils would contribute to high prices while a new wave of COVID-19 and quarantine restrictions in Ukraine and Russia could lead to lowering demand from the hotel, restaurant and catering (HORECA) sector. ● Svetlana Kyrchok is an oilseed analyst at APK-Inform, Ukraine. This article is based on a presentation she made on 3 November 2021 at APK-Inform’s Fat and Oil Industry Russia: conference

forecast of sunflower seed production and distribution in 2021/22 MY

15.2 mln tonnes – sunflower

14.7 mln tonnes – sunflower

+12%

+14%

Dynamics of average bid prices of sunflower seed in CFD of Russia, RUR/t 17/18

seed processing forecast in 21/22 МY

seed production forecast in 21/22

18/19

19/20

20/21

21/22

65000 60000 55000 50000 45000

21/22 to 20/21

40000 35000 30000

Planted areas, thsd ha

8643

8550

9690

13%

25000

Yield, c/ha

18,5

16,2

16,1

-1%

15000

Production, thsd tonnes

15669

13585

15239

12%

Processing, thsd tonnes

14957

12858

14700

14%

1346

607

260

-57%

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Sun oil with French ad.indd 4

Aug

Jul

Jun

Apr

May

Feb

Mar

Jan

Dec

Oct

Nov

Sep

900 700

Jul-21

Sep-21

May-21

Jan-21 Mar-21

Jul-20

Sep-20

Nov-20

May-20

Jan-20 Mar-20

Jul-19

Sep-19

Nov-19

May-19

Nov-18

Jan-19 Mar-19

Jul-18

Sep-18

Jan-18 Mar-18

Jul-17

Sep-17

500 May-18

*Forecast Source: APK-Inform

1100

Nov-17

Figure 6: Russia – Sunflowerseed production forecast

bid

1300

Jan-17 Mar-17

• •

sunflower seed export is subject to 50% export duty from July 1, 2021 to August 31, 2022; sunflower seed and oil export is subject to quotas in Kazakhstan from September 2021 to February 1, 2022

offer

1500

May-17

•

Dynamics of average prices of Russian sunflower oil, USD/t, FOB 1700

Source: APK-Inform

Export, thsd tonnes

20000

Jul-16

21/22*

Sep-16

20/21

Nov-16

19/20

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21

09/02/2022 10:29:55

Photo: Adobe Stock

EU/BIOFUELS

Environmental focus While a projected boom in renewable diesel production is expected to disrupt the US oils and fats market, a swifter adoption of electric transport technology in Europe is likely to reduce this impact across the Atlantic, according to the European Commission (EC).

In its agricultural outlook for 2021-31, the EU executive said that biofuel demand will start to “decrease as road transport fuel use starts to trickle away”. This means that EU biodiesel use should peak at 18.9bn litres in 2023, declining by 24% to reach 14.3bn litres in 2031. Bioethanol usage will also fall, although its non-fuel applications will slow its decline, with EU usage peaking at 7.1bn litres in 2023 and falling by 10% to reach 6.4bn litres in 2031.

The result of these trends, encouraged by the European Green Deal policy that prioritises electrification of transport systems and the development of renewable energy, could be a more stable market mix of oils and fats between food and non-food, compared with the USA. For instance, looking at soyabean oil – a key renewable diesel feedstock – the US Department of Agriculture (USDA) forecasts EU consumption for industry use in 2021/22 (from October) to be 1.09M tonnes, and 1.37M tonnes for 22 OFI – FEBRUARY 2022

EU.Biofuels Feb 2022 NEW page 22.indd 2

The EU’s strong environmental policies are having a major impact on its oils and fats sector. However, the strength of its economy means the industry should remain secure for the next decade Keith Nuthall food. This is similar to 2020/21’s share of 1.08M tonnes for industry and 1.4M tonnes for food use.

Regardless of how the EU oils and fats market is organised, the bloc remains a globally important player. Europe is a major source of oils and fats sales, with US$50.1bn in revenue generated in 2021, according to statistical analysts Statista.

The market is expected to grow at a compound annual growth rate (CAGR) of 3.3% between 2021 and 2026. This growth is also projected by market researcher Mordor Intelligence, which forecasts a European oils and fats CAGR for 2020-5 of 3.35%. It said that the European vegetable oil market alone in 2020 was worth US$29.2M. These sales are being driven by “robust demand for organic health-based products, with increased consumption among health-conscious consumers of high-quality edible oils /cooking oils…”

Mordor said. It stressed that market support from the renewable energy directive (RED) and EU Common Agricultural Policy (CAP) boosts the production and sale of vegetable oil in a wide range of industries, including biofuel, food, animal feed and cosmetics.

Common Agricultural Policy

The CAP is important for food and nonfood oils and fats production and it has been reformed in the past year. A €386bn CAP for 2023-27 was finally agreed, after two years of negotiations, in November 2021, with guidance prioritising EU agricultural subsidies improving environmental performance by producers and the production of crops that reduce carbon emissions when processed.

This will include funding the development of sustainable energy within agriculture, including biofuels use, and also additional funding for biofuel www.ofimagazine.com

10/02/2022 12:42:45

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EU/BIOFUELS u focused farming, especially those with a lower carbon footprint. A key target of funding is to be “farms benefitting from CAP investment support contributing to climate change mitigation and adaptation, and to the production of renewable energy or biomaterials.”

As for the RED, this is also being revised, with reforms being proposed in July. It is important because with non-biofuel alternative fuels remaining under-developed for the time being, it is likely to encourage biofuel usage, but as renewable hydrogen-based fuels become more developed, this pressure may ebb.

Regarding the key transport sector, RED reforms propose a new target for reducing the greenhouse gas intensity of transport fuels used in the EU by 13% by 2030.

When compared to the energy-based target of the existing directive, that would mean a 28% reduction in emissions (up from 14% at present).

The new proposal would include an additional sub-target of 2.2% for the use of advanced biofuels, such as those made from straw, algae, manure, nut shells, husks and more non-food bio-feedstocks.

However, as in the previous directive, the proposed law would limit to 7% the share of transport biofuels produced from food and feed crops within total transport energy consumption, an important constraint on biofuel production and sales.

Pekka Pesonen, secretary-general of EU farmers association Copa-Cogeca, has accused the European Commission of “taking a very ultra-orthodox approach to the sustainability criteria”. Speaking to EU newswire Euractiv, Pesonen, said that the restriction would reduce the capacity of Europe to export food-based biofuels.

“We need the conventional biofuel sector…. And we need advanced biofuels on top…,” he said.

That said, other EU legislative initiatives linked to the European Green Deal will ramp up EU legislative support for oils and fats sales in general.

Green Deal boosts biofuels

The Green Deal also includes three targeted legislative initiatives boosting the use of biofuels in transport. These include a ReFuelEU Aviation proposed regulation that tells fuel suppliers to include sustainable aviation fuel (SAF), which can include biofuels, within blended aviation fuels offered at EU airports. The law would ramp up the minimum SAF proportion supplied from 2% in 2025 to 63% in 2050. Airports would be forced to install equipment to store and blend SAF with standard kerosene.

Another initiative is the FuelEU 24 OFI – FEBRUARY 2022

EU.Biofuels Feb 2022.indd 3

‘The European Green Deal includes three legislative initiatives boosting the use of biofuels in transport’ Maritime regulation, which will increase biofuels used in shipping visiting EU territorial waters. The proposed law would impose reductions in carbon emissions from vessels, of 2% from January 2025, 13% from January 2035, 59% from January 2045 and 75% from January 2050. A key approved method of achieving these goals will be powering boats with biofuels, which (along with bioLNG) are projected to be 53.3% of the EU maritime fuel mix by 2050, up from 2.9% in 2025.

Meanwhile, a proposed Alternative Fuels Infrastructure Regulation encourages the installation of interoperable delivery and storage systems for alternative fuels for all transport system in Europe.

Commenting on the overall European Green Deal package, EU transport commissioner Adina Vălean, said: “We will create a market for sustainable alternative fuels and low-carbon technologies, while putting in place the right infrastructure to ensure the broad uptake of zero-emission vehicles and vessels.”

EU palm oil imports to fall

One biofuel feedstock that is certainly not being encouraged by EU policy, however, is palm oil, which the EC, following pressure from the European Parliament, has ruled cannot count as a renewable feedstock to help member states meet their renewable energy targets from 2030. MEPs have argued that palm oil plantations are responsible for significant tropical deforestation.

Unsurprisingly, this move has upset Indonesia and Malaysia – the world’s largest palm oil producers – with both countries launching a dispute case at the World Trade Organization (WTO) against the EU, claiming the move breaks global trade rules.

Indonesia and Malaysia claim the EU

restrictions breach the WTO’s Agreement on Technical Barriers to Trade, the General Agreement on Tariffs and Trade 1994, and the Agreement on Subsidies and Countervailing Measures. The WTO has yet to rule on these cases, and if either party appeal, the dispute is unlikely to be resolved soon, because the WTO appellate body remains in limbo, with the USA blocking nominations to serve as a member over a dispute about how this tribunal operates.

As a result, anticipated exports of palm oil to the EU are expected to fall. Statista notes that 2020 Malaysian exports to the EU totalled 1.83M tonnes, down from 2.36M tonnes in 2016, for instance.

But the feedstock is still an important element of the EU biofuel mix. Data released by campaign group Transport & Environment said that palm oil was still the second largest feedstock in European biodiesel – 4.68M tonnes in 2020. Only rapeseed oil was more important at 5.67M tonnes.

Rapeseed on the decline

Rapeseed is the dominant EU-produced oilseed but it been grown and crushed in declining quantities over the past three years in Europe.

The latest USDA GAIN report on EU oilseeds released in April 2021 said that: “After reaching a high of 6.5M ha in production in the 2018/19 marketing year, the rapeseed area in the EU declined and stagnated over the past three years along with production [even taking account of Britain’s exit from the EU in January 2020].

As a result, demand for rapeseed currently exceeds domestic supply.”

The USDA blamed this decline on the EU’s ban on neonicotinoid pesticides to protect honeybees. “Insufficient initial protection due to missing neonicotinoid seed coating leads to higher insect damage and increased frequency of applications of other, less efficient pesticides”, increasing costs. Imports of rapeseed for 2020/21 are estimated in the GAIN report at 6.5M tonnes, up from 6.1M tonnes the previous year.

However, with palm oil imports expected to fall, and the EU’s food production industry a key element of its economy, the value of rapeseed oil as a livestock feedstock, especially in the dairy sector, is likely to keep this oilseed segment in good health.

Soyabean meal’s high protein content means that feed uses will also help keep EU soyabean production expanding. The USDA predicted that the EU soyabean planted area would increase by 3% in 2021/22 compared with 2020/21 to

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08/02/2022 10:51:01

EU/BIOFUELS exceed 1M ha for the second year.

With healthy rainfall in key producing countries, the EU soyabean crop is expected to be 10% higher in 2021/22 than 2020/21. Despite this – demand still exceeds supply – as with rapeseed oil and the EU needs to import soyabeans, with a forecast 14M tonnes expected to be imported in 2021/22, with more than 50% coming from Brazil, 25% from the USA and 10% from Canada.

One key issue for the EU soya sector is to avoid the criticism levelled at the palm oil segment, that it promotes deforestation, and European vegetable oil and protein meal industry association Fediol has been working hard to demonstrate the soya segment’s sustainability. The association in October released an assessment arguing that 87% of the soyabeans processed in the EU in 2020 were sourced from regions with a low risk of deforestation, up 20% on its 2016 record. Fediol said: “Further efforts are being deployed to ensure soyabean production is not linked to the destruction of forests or savannahs.”

Such concerns are less of an issue for sunflowerseeds, another major EU oil feedstock, given that receptive growing conditions in the Black Sea region

OFI Half Page Horizontal Ad - Grow Profits.indd www.ofi magazine.com

EU.Biofuels Feb 2022.indd 4

1

especially mean there is less demand for imports from environmentally sensitive regions. For 2021/22, the USDA anticipates that the EU will import 2.05M tonnes of sunflowerseeds, down from 2.3M tonnes in 2019/20.

The GAIN report said that the area under sunflower cultivation in the EU increased in 2021/22 to the highest level in the last five years – 4.48M ha – with high prices encouraging growth in production within Bulgaria, the Czech Republic, Hungary and Slovakia.

EU to maintain butter exports

Meanwhile, looking at dairy fats, always a strong segment for Europe, the EC’s 2021-31 agricultural outlook, released in October, predicts that the EU will hold its position as a butter exporter. Production is expected to grow steadily from 2.39M tonnes this year to 2.45M tonnes in 2031. Exports are projected to expand from 299,000 tonnes in 2022 to 334,000 tonnes in 2031, while imports drift slightly from 34,000 tonnes this year to 35,000 tonnes in 2031.

“Nutritional aspects and functionality will drive EU dairy demand, with organic consumption also being supported by public support measures,” said the EC.

Organic dairy products should benefit from growing demand, it added.

Top olive oil producer

Finally, olive oil, a crop where Europe retains international dominance, will also be subject to solid growth, with production forecast to rise from 2.23M tonnes in 2021 to 2.51M tonnes in 2031. Exports will also increase significantly, from 860,000 tonnes in 2021 to 1.09M tonnes in 2031.

Europe is getting better at producing olive oil, suggests the EC report.

“Value creation in broader terms remains significant, leading to improved profitability especially in super intensive systems.” These involve a quick entry into production (usually the second or third year from planting) and delivering a high quality output with minimised losses through fully mechanised production, from planting and pruning to harvesting.

In short, while the EU’s strong line on environmental policy is having a major impact on its oils and fats sector, the inbuilt strengths of Europe’s economy, especially food production, means that the region’s oils and fats market should remain solid and secure for the next decade. ● Keith Nuthall is the editor of International News Services

11/27/212022 6:16 PM OFI – FEBRUARY 25

08/02/2022 10:51:02

OXIDATION & ANTIOXIDANTS

Tackling oxidation

The oxidation of vegetable oils is an undesirable series of chemical reactions involving oxygen, which degrades the quality of the oil.

Oil oxidation is one of the main causes of food deterioration and results in alterations of aroma, flavour and colour; loss of certain nutrients; and the formation of potentially harmful substances, leading to a reduction in the shelf life of a food product.

Oxidation eventually leads to rancidity in oil, with accompanying off-flavours and smells.

The oxidation process

Oxidation occurs through a free radical chain propagation reaction in which peroxides and hydroperoxides are formed from fatty acids and oxygen. This is known as the auto-oxidation process. These compounds are quite unstable, so they can be broken, giving rise to more free radicals and generating a chain reaction (see Figure 1, following page). The process is one-way and irreversible but can be delayed with the addition of antioxidants.

The oxidation process occurs in three phases: In the initiation phase, light, heat, traces of heavy metals and radical peroxides cause active free radicals to occur.

In the propagation phase, the oxidation of free radicals in combination with other fatty acids forms hydroperoxides and more free radicals, which re-enter the oxidation chain. The high number of reactive compounds begin to interact with each other.

Finally, the concentration of peroxide radicals falls as the formation of deteriorated products begins to stabilise and oxidation activity is terminated in the third phase.

26 OFI – FEBRUARY 2022

Oxidation.indd 2

Photo: Adobe Stock

Oil oxidation involves a series of chemical reactions that degrade the quality of an oil. Mitigating steps include selecting the right oil for the right application, and using protecting additives and antioxidants Ignace Debruyne

The primary degradation compounds resulting from frying include free fatty acids, which can catalyse oil degradation and decrease the shelf stability of fried food

After the complete destruction of fatty acids, secondary products of oxidation are generated, which are responsible for rancidity occurring.

To delay or prevent the oxidation of oils and fats, the formation of the first free radicals or hydroperoxides must be prevented, which can only be achieved in the first phase. Once the oxidative process reaches the propagation phase, the process cannot be delayed or stopped.

Factors that influence oxidation

The critical factors that affect oil oxidation can be internal and related to the oil itself, or external and processing-related.

Internal factors contributing to the oxidative deterioration of a finished oil are the presence of oxygen or air, with the rate of auto-oxidation rising with increasing oxygen levels. Temperature is another factor, with the auto-oxidation rate increasing – as any other chemical reaction – as temperature rises. Prooxidants such as (heavy) metal ions are powerful catalysts for oxidation, decreasing the induction period and raising the rate of reaction. Light and time also influence the oxidation rate.

External critical factors in oxidation include the processing set-up and

conditions, product specifications, and packaging and storage conditions.

Tackling critical factors

In order to tackle oil oxidation, various steps can be taken to address the critical factors which contribute to the process.

Oxygen or air: Oxidation can be initiated at a very low oxygen level and steps should therefore be taken to avoid oil exposure to air during processing.

Handlers should also avoid spraying in air during filling and emptying of storage or holding tanks. Proper agitation systems should be used in holding/storage tanks.

Leakages at joints, fittings or faulty pump seals should be avoided, vacuum should be maintained where possible; the blowing of lines with air should be avoided or eliminated and nitrogen used instead; refined oil should be protected with nitrogen blanketing or sparging and antioxidants should be used where possible.

Heat: Because oxidation accelerates with increasing temperature, it is important to keep an oil no warmer than necessary. Local overheating should be avoided by agitating the oil when it is heated and storage temperatures should be kept as low as possible. Oxidation

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08/02/2022 11:09:37

Source: B. Min, Ohio State University Figure 3: Physical andDavid chemical reactions during deep-fat frying

occurs even at a very low temperature, such as in frozen meat or oily fish, which get rancid even when stored at –200C. Pro-oxidants (metals): Copper is the most potent oxidation catalyst and, along with iron, should be kept to as low a level as possible. A chelating agent such as citric acid or phosphoric acid should be used for extra protection and iron, copper and bronze in systems should not come into contact with finished oils.

Light: Oil should be protected from exposure to light in closed vessels and single oxygen quenchers such as betacarotene and tocopherols can be added.

Time: Given sufficient time, any oil or fat will deteriorate even if handled under ideal conditions. The first in, first out (FIFO) principle should be applied in a strict way for oils and fats as well as finished products.

Improving oxidative stability

The strategies to improve the oxidative stability of oils and fats can be divided into three groups: 1. Modification of fatty acid profile www.ofimagazine.com

Oxidation.indd 3

2. Additives 3. Surface management Modification of the fatty acid profile includes choosing the right oil or fat for the application required. High oleic (HO) oils such as HO sunflowerseed, soyabean and canola oils are popular as they are more stable and still liquid. As trans fatty acids have been phased out, they are often replaced with saturates from palm oil, palm olein or palm oil fractions. Interesterified oils (or oleic and saturated fats) are developed for specific applications while in confectionery products, new cocoa butter equivalents (CBEs) and cocoa butter substitutes (CBSs) complement available products.

Additives fall into three categories.

Metal chelators bind metal ions and include citric or phosphoric acids. Radical scavengers ‘absorb’ free radicals and include synthetic antioxidants (BHA, BHT), semi-natural antioxidants such as gallic acid and propyl gallate, and natural antioxidants such as tocopherols and rosemary extract.

Source: ID&A

Figure 4: Five stages of frying oil quality

Physical and Chemical Reactions Figure 1: Cycle of lipid oxidation during Deep-Fat Frying

Source: ID & A

Source: ID&A

Figure 2: Breaking the cycle of lipid oxidation

Source: David B Mn, Ohio State University

OXIDATION & ANTIOXIDANTS

Surface management of bulk oils and fats during storage includes filling tanks from the bottom; using nitrogen blanketing or sparging where possible; the use of dish or cone-bottom stainless steel tanks; applying the FIFO rule; eliminating residual oils as much as possible; washing equipment and tanks at least twice a year; and applying a maximum storage temperature of 300C for oils and 600C for fats.

The inert properties of nitrogen can be used to protect against oxidation when vegetable oils are stored. Sparging involves expelling any air entrained in the liquid by creating a saturated nitrogen level, preventing the uptake of oxygen in the oil. Blanketing using inert gas or padding protects liquid oils in storage tanks by filling the vapour space above the product.

Nitrogen (and nitrogen mixed with CO2 and oxygen) can be used in transport trucks and in modified atmosphere packaging (MAP) to extend the shelf life of packaged foods by preventing oxidation and moisture migration.

Conditions can also be adapted during

OFI – FEBRUARY 2022

27

08/02/2022 11:09:45

OXIDATION & ANTIOXIDANTS storage and transport to protect a product from air, light and temperature, depending on whether it is packaged in cans, cartons, glass or PET.

Oxidation during frying

Cooking can be divided into four main methods: • Roasting - with direct exposure to heat • Baking - with exposure to hot air • Boiling- with exposure to hot water • Frying – heating in oil or fat in the form of shallow pan frying or deep frying Many physical and chemical reactions take place during deep-fat frying, producing different compounds (see Figure 3, previous page). These include hydrolysis and the formation of FFAs, monoacylglycerol (MG) and diacylglycerol (DG); oxidation producing aldehydes, ketones, alcohols, FFAs and oxidised triacylglycerol (TG); and thermal degradation, causing cistrans isomerisation, polymerisation, and producing cyclic and aromatic compounds.

The primary degradation compounds resulting from frying include FFAs, which can catalyse oil degradation and decrease the shelf stability of fried food.

It is important to limit the smoke point of frying oil to a minimum of 1700C to

28 OFI – FEBRUARY 2022

Oxidation.indd 4

tackle FFA formation.

Polar compounds are another degradation product and directly relate to the taste and quality of fried food, in which some oxidation and breakdown is necessary for the basic flavour of the fried product.

Surfactants rapidly speed up oil degradation and cause an oil to foam.

Adding an anti-foaming agent such as poly-dimethyl siloxane (PDMS) acts as an oxygen barrier. PDMS at 100ppb is sufficient to form a continuous layer over the full surface of the oil. This reduces the oxygen concentration in, and at the oil surface, at cooking and frying oil temperatures. Polymers can also cause oil to foam and decrease heat exchanger efficiency; as well as increasing oil absorption in the fried product.

The Maillard reaction is a chemical reaction between amino acids and reducing sugars that gives browned or fried food its distinctive flavour. The reaction is needed for colour and crust development but can lead to increased acrylamide formation.

Industrial frying critical points

Industrial frying is different from home cooking as fresh oil is continuously added

to the process. Heating should only be applied when needed and continuous filtration is recommended. The use of active absorbents to remove polar compounds can significantly increase the use time of frying oils in continuous processes.

Preferably, the oil leaves with the product after minimal use and fresh oil is fed continuously. Residual oils must be eliminated as much as possible and processing units washed on a regular basis.

Conclusion

The oxidation of oils and fats goes only one way. In processing, food manufacturers work towards the highest level of oil oxidation stability by selecting the right oil for the right application; using protecting additives and antioxidants; and by adopting surface protection. However, in cooking and frying, some controlled oxidation is necessary for the required taste and quality of a product. ● Dr Ignace Debruyne is a technical and market consultant for ID&A, Belgium. This article is based on a presentation he made at the Advanced Oils & Fats Processing and Application Technology Smart Short Course on 16-18 November 2021 www.smartshortcourses.com

www.ofimagazine.com

10/02/2022 12:01:47

TRANSPORT & LOGISTICS

Photo: Adobe Stock

Photo: Adobe Stock

Gateway to Northeast Africa

The Port of Djibouti has attracted large investment and is strategically located at the crossroads of one of the world’s busiest shipping routes, linking Europe, the Far East, the Horn of Africa and the Persian Gulf

Northeast Africa encompasses the African countries situated around the Red Sea. The region is located between North Africa and East Africa, and mainly encompasses the Horn of Africa (Djibouti, Eritrea, Ethiopia and Somalia) and the Sudans (Sudan and South Sudan).

The combined population of Djibouti, Ethiopia, Eritrea, Somalia and the Sudans is almost 200M people, which accounts for 15% of the continent’s total population.

Geographically, these easternmost African countries are strategically located.

However, while the economies of Djibouti and Ethiopia are progressing well, Eritrea, Somalia and the Sudans are among the 10 poorest countries in Africa.

Road infrastructure and rail networks are also poorly developed, which makes logistics and transport costs expensive and unattractive for private investment.

In addition, constant armed conflicts and civil wars in this region have resulted in instability, creating a risky environment for trade and foreign investors.

Among these five countries, Djibouti has attracted large port investment, especially from China and the United Arab Emirates (UAE). The Port of Djibouti, located in Djibouti’s capital – Djibouti City www.ofimagazine.com

North Africa.indd 2

The Northeast African nations of Djibouti, Eritrea, Ethiopia, Somalia and Sudan are strategically located as inland gateways but poor road and rail infrastructure, armed conflicts and economic constraints have held back development Fatima Zaharah – is strategically located at the crossroads of one of the world’s busiest shipping routes, linking Europe, the Far East, the Horn of Africa and the Persian Gulf.

Investments have also facilitated other infrastructure developments in railways and roads, connecting Djibouti Port to Addis Ababa in Ethiopia. This port has become a trade gateway to land-locked Ethiopia.

The services sector is the main GDP contributor in these five countries and accounted for 30-70% of total GDP. Agriculture is the source of livelihood and income for 80% of these populations but the sector is poorly developed, relying heavily on rain but with seasonal drought affecting the progress of farming. Only Somalia is dependent on agriculture as its main source of income, and the sector contributes more than 60% to the economy, with livestock export the main

source of the country’s foreign exchange revenue.

In Ethiopia, agriculture contributes 38.5% to the country’s GDP, with coffee exports as the main source of export earnings. Other agricultural products that earn foreign exchange include oilseeds, dried pulses, hide and skin, as well as live animals. The flower industry is also becoming a source of foreign revenue.

Consumption and imports

Djibouti, Ethiopia, Eritrea and Somalia and the Sudans are home to 200M people and their consumption of oils and fats per capita is between 5–9 kg, with total consumption of at least 1.2M tonnes.

Ethiopia is the market leader for oils and fats due to its sizeable consumer market. Its 115M population consumes around 500,000 tonnes/year of oils and fats, a relatively low volume as per capita u OFI – FEBRUARY 2022

29

08/02/2022 12:26:08

TRANSPORT & LOGISTICS

u

Photo: Malaysian Palm Oil Council

Photo: Adobe Stock

also offers the opportunity to divert some Ethiopian trade to Eritrea ports.

u consumption is only 5kg.

Sudan – with 50M people – is also an important market and currently absorbs almost half a million tonnes/year of oils and fats. Until 2011, Sudan was one country but its southern area seceded that year after decades of civil war to become South Sudan.

The market potential in this northeastern area of Africa has not been fully maximised and can be further expanded.

These markets have always been dependent on imports of oils and fats to supplement domestic requirements due to limited agricultural land to grow oilseeds. While consumption is growing in tandem with population growth, imports have always been influenced by financial constraints.

Over the last five years, imports of oils and fats have trended upwards, with palm oil accounting for the bulk of vegetable oil imports, with a market share of more than 80%. The remaining balance comprises sunflower oil (17%), soyabean oil (1%) and corn oil (1%).

Of the total oils and fats market size, Malaysian palm oil exports into the market 30 OFI – FEBRUARY 2022

North Africa.indd 3

supplement 50% of requirements.

Ethiopia has emerged as an important Malaysian palm oil export destination in Northeast Africa and the country relies on Djibouti to receive Malaysian palm oil as it is a landlocked country. Djibouti handles almost 90% of Ethiopia’s palm oil imports from Malaysia.

Somalia and Somaliland (an autonomous region in northern Somalia) are also important Malaysian palm oil export destinations. Most palm oil comes into Somaliland through the Port of Berbera, which also serves as an entry point into Ethiopia. For Somalia, the Port of Mogadishu serves as an entry point to the market.

Port facilities

There are six major ports in the Northeast African region – the Port of Djibouti, the Port of Sudan; Massawa and Assab ports in Eritrea; Berbera in Somaliland; and Mogadishu in Somalia.

The centre of this maritime trade is Ethiopia, which has stakes in the ports of Djibouti, Berbera and Sudan. The proximity of Eritrean ports to Ethiopia

Port of Djibouti Currently, Djibouti is the main entry port for palm oil into Ethiopia and the country relies on the Port of Djibouti to handle about 95% of its foreign trade turnover, with 70% of the cargo at the port for Ethiopian trade.

The port handles an estimated 7M tonnes/year of freight, of which around 20% is bulk food. However, due to other competing demands, vessels offload food commodities only at four berths at any one time. In addition the port does not always operate at full capacity due to different technical and logistical problems that are directly related to the port itself (such as discharging difficulties) and those related to logistics capacities in Ethiopia.

The Port of Doraleh was inaugurated in 2017 with a total annual capacity of 8.779M tonnes/year. It is an extension of the Port of Djibouti. The multi-purpose port has terminals for handling oil, bulk cargo and containers. It is owned and operated by DP World and China Merchants Holdings and has a total of 15 berths over a 4km long quay. All the terminals have direct access to the Addis Ababa–Djibouti Railway, which was inaugurated in 2017 and provides landlocked Ethiopia with rail access to the sea port. The capacity of the port includes a 20ha bulk terminal area and a 57ha general cargo yard. The mass terminal can handle 2M tonnes/year of cargo. It also offers space to store 100,000 tonnes of fertiliser, grains and warehouses for other goods, as well as handling 6M tonnes/ year of cargo.

Berbera Port, Somaliland There are four major operational ports in Somalia – Mogadishu, Berbera, Kismayo and Bossaso. Three of these are deep water ports, and all four operate throughout the year. Mogadishu and Berbera are two active ports while very little activity is registered at Kismayo.

Despite years of civil unrest and war, the infrastructure at the major ports appears to be in reasonably good condition but operating performance is poor with low handling speeds.

In 2015, Ethiopia started using Berbera Port based on an agreement reached between the two countries. This port serves Somaliland and the eastern parts of Ethiopia. The port has an annual cargo capacity of 1.2M tonnes and possesses nominal capacity to accommodate up to four bulk grain ships of 25,000 tonnes at a time.

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TRANSPORT & LOGISTICS

Figure 2: Djibouti, Ethiopia, Eritrea, Somalia & Sudan oils & fats imports (‘000 tonnes) Country

2014

2015

2016

Somalia

55,765

61,306

80,381

Ethiopia

51,435

94,050

136,232

Djibouti

29,266

54,764

80,213

Sudan

3,801

5,377

3,422

Eritrea

1,820

4,816

TOTAL

542,99

498,724

2017

2018

2019

82,322

77,929

93,456

173,591

148,647

64,757

137,995

216,190

52,316

14.647

4,359

7,457

7,512

9,563

5,940

4,936

527,464

666,379

571,911

346,182

Table 1: Malaysian palm oil exports to selected North African markets (tonnes) However, realising this potential is restricted by its limited discharge capacity, which has a bagging capacity of only 1,200 tonnes/day. The absence of other quayside bulk offloading equipment is another constraint. As a result, the port practically handles only one 25,000 tonne bulk grain ship at a time. Nevertheless, this port is often used by the United Nations World Food Programme (WFP) and the government of Ethiopia, with the latter having plans to increase its use of the port. www.ofimagazine.com

North Africa.indd 4

Port of Sudan The Port of Sudan has a handling capacity of 9M tonnes/year of bulk cargo and is a well-equipped facility. It is divided into three areas. The North Port with 15 berths handles bulk cargoes including grain, cement, oil and molasses.

The South Port – with four berths – handles bulk grain, containers, and oil products, and a roll-on-roll-off berth.

The third area (Green Harbour) has four berths and handles dry bulk (fertiliser and grains), seeds and containers. These areas

Massawa Port, Eritrea The Eritrea and Ethiopian war took place between May 1998 to June 2020, with a final peace agreement only signed in 2018.

The peace agreement between the two countries will be an added advantage to Ethiopia as Eritrea will be an important outlet for the development of the northern region of Ethiopia through Massawa and Assab ports, as well as the Port of Sudan.

Massawa port is the primary port for the import of cargoes into the Eritrean market. The port is based around a natural and protected series of bays with safe anchorages and good connections to the Eritrean hinterland.

The port was founded during the 19th century and was initially developed by the Italian and British during colonial times. It is currently under the management and control of the Eritrea government and is undergoing major rehabilitation and restoration of facilities and services.

Despite these initiatives, it is unlikely that Eritrea will become the centre of maritime commerce unless its internal conflicts are resolved and infrastructure is further developed.

Development potential Source: Malaysian Palm Oil Board

Figure 1: Djibouti, Ethiopia, Eritrea, Somalia & Sudan oils & fats consumption

Source: Oil World

Source: Oil Wold

also have storage and discharge facilities.

Ethiopia started using the Port of Sudan for the import of 50,000 tonnes of fertiliser in early 2015. Since then, it has been increasingly used for importing bulk chemical fertilisers and some other commodities, including petroleum.

The Northeast Africa region has a strategic location which has attracted large investment from Gulf State investors especially the United Arab Emirates (UAE), as well as China, Turkey and the USA. The port of Djibouti and its extension – Doraleh – currently have the most advanced infrastructure, which could be expanded and further developed to connect with the ports of Dar Es Salaam in Tanzania, Maputo in Mozambique or as far as Durban in South Africa.

China, France, Japan, Saudi Arabia and the USA have established military bases in Djibouti for piracy control and protection, especially around the Somali coast.

Despite several ports along the coast of Sudan, Eritrea, Djibouti, Somaliland and Somalia, the potential of vegetable oil entering the area is heavily dependent on the overall economic progress of the region. ● This feature is based on an article written by Fatimah Zaharah of the Malaysian Palm Oil Council published in August 2021 OFI – FEBRUARY 2022

31

08/02/2022 12:26:11

STATISTICS 1.1 EVOLUTION OF REFERENCE MARKETS FOB MALASYA CIF RDM CIF RDM CIF RDM FOB 6 PORTS FOB DUTCH MILL FOB ARGENTINA

14/12/2022 4699 1182 1630 1530 1330 1414 1133

31/01/2022 5628 1448 2075 2300 1510 1465 1346

EUR/ USD USD/ MYR

SPOT SPOT

1,1257 4,2300

1,1233 4,1840

Brent Crude Gas Oils

SPOT SPOT

73,7 642,25

89,26 796,25

Unidad MYR/ MT USD/ MT USD/ MT USD/ MT USD/ MT €/MT USD/ MT

US $/ BRL US $/ MT

Dif 929 266 445 770 180 51 213

Dif % 19,8% 22,5% 27,3% 50,3% 13,5% 3,6% 18,8%

-0,002 -0,046

-0,2% -1,1%

15,56 154,00

21,1% 24,0%

Vegetable Oils Prices continue historically high.

Low stocks and smaller than expected production of CPO in Southeast Asia. Palm oil exports regulation announced by local Government had a bullish impact. Global soybean stocks now seen declining in 2021/22 despite weak Chinese demand.

SOURCES : REUTERS / OIL WORLD

Global vegetable oil prices

JAN - 2022

MARKET REPORT

STATISTICAL NEWS Vegetable oil prices rise sharply

Reuters/Oil World

Crude Palm Oil ( Apr) Crude Palm Oil (Apr) CCNO Phil/ Indo (Apr/ May) CPKO (Apr/ May) Crude Sunflower Oil (Abr/ May/ Jun) Crude Rape Oil (May/ Jun/ Jul) Crude Soya Oil (May)

Vegetable oil prices have continued their sharp rise since mid-December, with palm kernel oil (PKO) leading the way with a rise of more than 50%, according to Lipsa’s January market report.

Palm oil prices continue to break historical records. Key factors to follow ahead include production in Indonesia and Malaysia, weather, possible labour problems in Malaysia, palm’s discount against soyabean oil, fertiliser costs, import rates in India, and mandates for use in biodiesel.

The uncertainty over the conflict between Russia and Ukraine, combined with the high prices of other vegetable oils, are supporting sunflower oil prices. For the new harvest, a significant increase in planted area is expected.

International Grains Council

Record rapeseed area forecast

Global rapeseed/canola area forecast (million hectares)

The International Grains Council (IGC) has raised its global rapeseed area estimate for the 2022/23 marketing season to a record 40M ha due to price increases and buoyant demand in the current crop year, UFOP reports. This translates to a more than 2% rise on the current crop year.

The IGC sees the largest cultivation increases in key rapeseed-producing countries, such as Canada and the EU-27. According to Agrarmarkt Informations-Gesellschaft (mbH), around 5.6M ha of rapeseed could be available for harvest in the EU in 2022, mainly due to expansions in France and Germany. The IGC also expects a 4% expansion in canola area in Canada to 9.4M ha.

Global soyabean production revised downward

USDA/AMI

The US Department of Agriculture (USDA) has significantly lowered its forecast for global soyabean supply and demand for 2021/22, UFOP reports. World production is forecast down 9.22M tonnes to 372.56M tonnes mainly due to continued dryness in South America.

Global soyabean processing is projected to fall 2.02M tonnes to 325.72M tonnes. World trade is also revised downward to 170.74M tonnes, some 6M tonnes above the level recorded for the 2020/21 season. China is set to remain the world’s main soyabean importer with an unchanged import volume of 100M tonnes. p = preliminary, e = estimate World soyabean supply and demand (million tonnes)

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

Sept 21

Oct 21

Nov 21

Soyabean

1,389.9

1,364.6

1,485.9

Crude palm

1,118.4

1,173.1

1,303.5

Palm olein

1,069.2

1,144.9

Coconut

1,456.6

1,485.2

Rapeseed

1,425.2

Sunflower Palm kernel Average Index

Dec 21

Jan 22

1,387.7

1,383.1

1,421.8

1,327.1

1,265.0

1,320.1

1,224.8

1,234.7

1,147.4

1,223.3

1,857.9

1,898.6

1,781.4

1,928.3

1,505.1

1,745.5

1,696.8

1,729.9

1,773.7

1,297.7

1,313.6

1,412.5

1,412.4

1,385.5

1,390.8

1,299.0

1,370.5

1,797.1

1,941.0

1,743.8

2,017.5

1,294.0

1,337.0

1,543.0

1,558.0

1,491.0

1,582.0

307.0

317.0

366.0

369.0

353.0

375.0

32 OFI – FEBRUARY 2022

Stats fEB 2022.indd 1

Lipidos Santiaga (Lipsa), Spain, produces vegetable oils and fats for food, animal feed, technical and biofuel applications The Union for the Promotion of Oil and Protein Plants represents companies and associations involved in the production, processing and marketing of oil and protein plants in Germany

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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