OFI January 2019

OILS & FATS INTERNATIONAL JANUARY 2019 â–ª VOL 35 NO 1 OFFICIAL PARTNER

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Science behind Technology

CONTENTS

OILS & FATS INTERNATIONAL

IN THIS ISSUE – JANUARY 2019

FEATURES

24

Update on Malaysia

Palm oil production for 2018 has been forecast to reach 19.9M tonnes, with weaker prices supporting exports

Lauric Oils

NEWS & EVENTS

Palm Oil

27

The high oleic option

A South American hybrid palm has been bred to have a higher oleic oil content

Plant & Technology

Comment

20

India’s potential in coconuts

3

India must resolve several pressing issues if it is to increase coconut oil output

News

4

Asia

30

Plant and equipment round-up

The latest projects, technology and processing news around the world

32

10

Koole Minerals (Rotterdam) (NL), cap. 1,100,000 m3 Koole Botlek (Rotterdam) (NL), cap. 1,622,000 m3

Groundskeeper accepts reduced cancer damages in Bayer case

Transport News

14 Koole Pernis (Rotterdam) (NL), cap. 675,000 m3

USA to review tariffs on Argentine biodiesel

Biotech News

Essential recycling The rendering industry takes animal byproducts and turns them into ingredients for feed and other applications

Supermarket’s anti-palm oil ad banned from broadcast

Biofuels News

12

Rendering

Palm oil ad goes viral

Low Rhine water level hits prices and shipping of rapeseed, biodiesel

Renewable News

16

Neste to develop sustainable materials with Clariant

Koole Amsterdam (NL), cap. 118,731 m3

Diary of Events

Koole Zaandam (NL), cap. 43,000 m3

17

Koole Terminals has expanded the services with the brand new terminal Koole Tankstorage Botlek (KTB). Koole’s overall storage capacity increased from 2,2 to 3,8 million cubic metres.

Koole Nijmegen (NL), cap. 79,000 m3

International Market Review

More info? Visit www.koole.com or please contact Robert Guijs, +31 (0) 613 340 360, r.guijs@koole.com Edwin Dominicus, +31 (0) 612 835 180, e.dominicus@koole.com Sidney Snijders, +31 (0) 651 178 600, s.snijders@koole.com

Koole Avonmouth (UK), cap. 24,553 m3

9 Terminals in Europe

Total storage capacity 3,800,000 m3

www.ofimagazine.com

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12 inland barges 3 coasters

Koole Liverpool (UK), cap. 22,004 m3

Koole Gdynia (UK), cap. 29,900 m3

18

International events listing Global update

Statistics

36

Statistical data from Mintec

OFI – JANUARY 2019

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EDITOR'S COMMENT

OILS & FATS INTERNATIONAL

VOL 35 NO 1 JANUARY 2019

EDITORIAL: Editor: Serena Lim serenalim@quartzltd.com +44 (0)1737 855066 Assistant Editor: Gabriel Day gabrielday@quartzltd.com +44 (0)1737 855157 SALES: Sales Manager: Mark Winthrop-Wallace markww@quartzltd.com +44 (0)1737 855114 Sales Consultant: Anita Revis anitarevis@quartzltd.com +44 (0)1737 855068 PRODUCTION: Production Editor: Carol Baird carolbaird@quartzltd.com CORPORATE: Managing Director: Steve Diprose stevediprose@quartzltd.com +44 (0)1737 855164 SUBSCRIPTIONS: Elizabeth Barford subscriptions@quartzltd.com +44 (0)1737 855028 Subscriptions, Quartz House, 20 Clarendon Road, Redhill, Surrey RH1 1QX, UK © 2019, Quartz Business Media ISSN 0267-8853 WWW.OFIMAGAZINE.COM

A member of FOSFA Oils & Fats International (USPS No: 020-747) is published eight times/year by Quartz Business Media Ltd and distributed in the USA by DSW, 75 Aberdeen Road, Emigsville PA 17318-0437.

Periodicals postage paid at Emigsville, PA. POSTMASTER: Send address changes to Oils & Fats c/o PO Box 437, Emigsville, PA 17318-0437 Published by Quartz Business Media Ltd Quartz House, 20 Clarendon Road, Redhill, Surrey RH1 1QX, UK oilsandfats@quartzltd.com +44 (0)1737 855000 Printed by Pensord Press, Gwent, Wales

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Palm oil ad goes viral A social media storm has erupted in the UK as a result of a broadcast ban on frozen food supermarket Iceland’s Christmas advert, which uses a Greenpeace animation to tell the story of a young orangutan made homeless through palm oil farming (see page 4). Banned from UK TV screens, the ad has nonetheless gone viral with millions of views on YouTube.

So is the ad a cynical ploy by a retailer to cash in on anti-palm oil sentiment or a noble stand against deforestation?

Iceland says it wants to raise awareness and solidify its position on not using palm oil in its own brand range, a relatively easy step as it only uses around 500-1,000 tonnes/year of palm oil in its own products and is not targeting palm oil in branded products.

The Iceland ad claims that 25 orangutans die daily because of palm oil production, a figure which is difficult to verify. Without a doubt, orangutan numbers have fallen dramatically, numbering around 70,000-100,000 now only on the islands of Borneo and Sumatra, from around 230,000 a century ago, according to the WWF. However, it isn’t just palm oil cultivation which has contributed to the decline. A study* published in Current Biology in February estimates that more than 100,000 orangutans were lost in Borneo between 1999-2015. “While land clearance caused the most dramatic rates of decline, it accounted for only a small proportion of the total loss. Most orangutans were lost from forests, implying the importance of hunting,” the study says.

Habitat loss is caused by forests being cleared for palm oil, timber harvesting, logging and mining. Hunting occurs when orangutans are killed for food in forests or when they encroach on agricultural land. Young orangutans are also targeted for the illegal pet trade, usually resulting in the mother being killed.

So the picture is more complex than the Iceland advert depicts.

We all know that palm oil is vital in meeting global edible oil demand and is the most productive oil crop, yielding around 4-5 tonne/ha against 1.2 tonne/ha for rapeseed oil and 0.5 tonne/ha for soyabean oil. Palm oil accounts for 33% of world vegetable oil production while using just 5% of the land used for all oil crop cultivation, and provides an income to around 4M smallholders who produce half the world’s palm oil.

Many of us will have heard the statistics quoted by United Plantations chief executive Carl Bek-Nielsen. That palm oil is grown on 19M ha or 0.96% of the world’s 5bn ha of agricultural land. Of the 113M ha deforested globally between 1990 and 2008, 63M ha was for beef production, 13M ha for soyabeans, 10M ha for pig and poultry production and 6M ha for palm oil.

This does not absolve palm oil or the poor practices of some plantation companies.

But removing it from the food chain – even if that were possible – will not tackle deforestation but simply shift demand to another, less efficient oil.

A big incentive for smallholders and large plantation companies to produce palm oil responsibly would be if they received a premium for a more sustainable product.

So how many consumers, manufacturers and retailers are prepared to pay for a more sustainable oil? Bek-Nielsen says that while around 12M tonne/year of Roundtable on Sustainable Palm Oil certified palm oil is produced, only about 6M tonnes are bought.

It’s easy to take an anti-palm oil stand, make an advert or share a video. Perhaps the palm oil industry should do the same and hire a PR company to solve its image problem.

The problem is, the complexity of explaining how farmers, producers, manufacturers, retailers, consumers and governments can work together to tackle deforestation is far more complicated than any ad can depict.

Serena Lim – serenalim@quartzltd.com * ‘Global demand for natural resources eliminated more than 100,000 Bornean orangutans’ OFI – JANUARY 2019

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NEWS IN BRIEF BELGIUM: Belgium has updated its definition of cream with a new draft regulation that lowers the minimum fat content of cream, whipped cream and light cream.

To define cream as a product, it must contain at least 10% fat that has been separated from milk as a result of either letting it stand or by centrifugal processing.

The Belgian government had informed the European Commission of the regulation, Food Navigator said.

FRANCE: Five French ministries proposed 17 measures on 14 November to tackle deforestation caused by importing non-sustainable forest or agricultural products, which may include palm oil, Reuters reports.

The five ministries’ joint statement said that from 1990 to 2015, the world’s forest area fell by 129M ha, which led to “an 11% increase in greenhouse gas emissions and had a negative effect on biodiversity and natural habitats”.

The new measures included providing financial aid for developing countries to promote non-deforestation criteria, a “zero deforestation” label for consumers by 2020 and a European policy on imports posing a risk for forests next year.

Supermarket’s anti-palm oil ad banned from broadcast British supermarket Iceland’s Christmas advert depicting environmental issues related to palm oil has been deemed “too political” by Clearcast, the UK advertisement assessment body.

The advert, using a Greenpeace animation, depicted an orangutan telling the story of the destruction of her habitat caused by palm oil production.

Clearcast said the Iceland ad “contravened the prohibition on political advertising" because it included messages of a political nature.

It was Greenpeace’s involvement in the ad, rather than the ad content, that was the barrier to broadcast, Clearcast managing director Chris Mundy said on 12 November.

Iceland managing director Richard Walker said he was “gutted” the ad had been banned.

“We wanted to share this message far and wide and underline Iceland's commitment to

remove palm oil from all of our products."

The Iceland advert has had millions of views on social media.

Malaysian Minister for Primary Industries Teresa Kok spoke out against Iceland on 19 November, saying: “Iceland is one of those entities which find it easier to announce a ban on palm oil products rather than commit to sustainable palm oil.”

She Iceland was only removing palm oil from its own in-house products, which may have had poor sales. “It is not prepared to do the same on other more established brands that contain palm oil as part of their formulation.”

Kok said Malaysia increasingly subscribed to Certified Sustainable Palm Oil (CSPO) and had adopted international sustainability standards but uptake by British and European entities of CSPO had been less than promised.

RSPO adopts total ban on deforestation The Roundtable on Sustainable Palm Oil (RSPO) has revised its certification standards to include protection of peatlands, human and labour rights and a total ban on deforestation.

The new standards were adopted on 15 November at the RSPO's annual general assembly as part of its five-year review cycle of its Principles and Criteria (P&C).

“Some of the key gaps identified in the P&C 2013 requiring improvement

included halting deforestation, protecting peatlands, human and labour rights as well as the need to develop a separate standard specifically

for independent smallholders,” the RSPO said.

RSPO grower members have one year to implement the new standards.

US and Chinese tit-for-tat tariffs halted in temporary trade war truce China and the USA have struck a 90-day temporary truce in their trade war and agreed not to impose additional tariffs on each other’s goods that were due to take effect on 1 January.

“President Trump has agreed that on 1 January, he will leave the tariffs on US$200bn worth of products at the 10% rate, and not raise it to 25%,” said a 1 December White House statement from the G20 Leaders’ Summit in Argentina.

“If at the end of this period of time, the parties are unable to reach an agreement, the 10% tariffs will be raised to 25%,” the statement added.

In early July, the USA imposed tariffs on 4 OFI – JANUARY 2019

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some Chinese imports, accusing China of “unfair trade practices”. China responded with 25% tariffs on several US imports, including soyabeans. The USA then imposed 10% tariffs on US$200bn worth of Chinese imports on 24 September, which prompted China to impose 25% duties on a wide range of US food products including edible oils.

The White House said American and Chinese officials would spend the 90-day window negotiating on technology transfer, intellectual property and agriculture.

However, the Chinese statement regarding the meeting did not address the 90-day window, or the specific purchases

from the USA, or a time frame for when this could start.

“My big question mark is will China come in and buy US soyabeans … because they still buy their beans from Brazil,” commented Joe Vaclavik of commodities brokerage firm, Standard Grain.

Bloomberg reported on 3 December that soyabeans for January delivery rose 2% to US$9.12/bushel in Chicago, leading advances among US crop futures following news of the trade truce.

The truce comes after the US Department of Agriculture forecast that Chinese soyabean imports would drop by 10% to 85M tonnes in 2018/19. www.ofimagazine.com

12/12/2018 10:01:33

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NEWS

Unilever fined for 'abusive practices' Greece’s competition authority has fined Anglo-Dutch consumer goods giant Unilever a total of €27m (US$31.3M) for “abusive practices” linked to the sale of its margarine products in the country.

The practices were said to have occurred between 2002 and 2008, before Unilever concluded the sale of its spreads business for US$8.04bn to private equity

IN BRIEF JAPAN/USA: Japanese supplier of oils and fats ingredients, Fuji Oil Holding, will acquire The Blommer Chocolate Company, North America's largest cocoa processor and ingredient chocolate manufacturer.

The acquisition, announced on 19 November, grants Fuji Oil all business entities including four manufacturing operations in North America and one in Shanghai.

Fuji Oil is a global manufacturer in the fields of hard butters for chocolate and industrial use chocolate; confectionery and bakery ingredients including cream, margarine and cheese-flavour ingredients; and soya ingredients. It has 11 chocolate factories in eight different countries.

USA: Cargill is launching a new alternative to fish oilbased aquafeed to relieve pressure on wild caught fish.

Latitude uses canola-based omega 3 fatty acids that farmed fish require.

Cargill said feed trials had shown that 100% of fish oil could be replaced with Latitude with no effect on fish health.

The product was also 100% traceable due to Cargill controlling the production process from canola seed to crop cultivation and oil production.

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firm KKR in July 2018, wrote Foodnavigator.com on 15 October.

The Hellenic Competition Commission said that Unilever had used the scale of its margarine brands to impose unfair trading agreements on retailers and wholesales in Greece.

It found that Unilever’s Greek business, Elais-Unilever Hellas, had adopted “abusive practices” that aimed to maintain or

extend Unilever’s market leadership in the margarine segment.

“These practices included targeted rebates and banning the promotion of competitive brands.”

The commission also ruled that Unilever broke competition law by forcing wholesalers to accept resale price maintenance, restriction of active and passive sales and non-compete

obligation clauses, Foodnavigator.com said.

Unilever may appeal the ruling, with a statement sent to just-food.com, saying: “Elais-Unilever Hellas states that [it] respectfully disagrees with the outcome and is going to review the rationale of the aforementioned decision, examining the grounds to appeal to the Administrative Court of Appeal.”

Soya crushing potential in Indonesia highlighted Dutch finance firm Rabobank says there is potential for Indonesia to enter the soya crushing industry.

Indonesia is forecast to consume 5.6M tonnes of soyabeans in 2027 due to rising demand for animal feed, made from soya meal, according to a new November Rabobank report.

Indonesia had been a small soyabean oil consumer because of the abundance of cheap domestic palm oil but soya crushing plants would generate positive margins if the produced soyabean oil could be exported.

“Soyabean crushing facilities could be built in Indonesia to cater to the rising domestic demand for soya meal,” said Rabobank senior analyst, grains and oilseeds, Oscar Tjakra. The plants would need to be located

near large areas of soya meal consumption, with appropriate logistics, such as the western part of Java.

Western Java had 18.1M tonnes of feed mill capacity, making it the highest consumer of soyabeans domestically. The area also had existing dry bulk grain ports, which could minimise logistics costs.

Animal feed was also produced in Sumatra, with 4.2M

tonnes capacity; Sulawesi, with 1.5M tonnes capacity; and Kalimantan, with 800,000 tonnes capacity.

Rabobank said several factors were needed for soyabean crushing in Indonesia to work including large-scale facilities; soyabean origination and efficient handling capabilities; domestic soya meal sales and distribution capabilities; and an edible oil export sales network.

Bunge forms new review committee to improve value Global agribusiness giant Bunge Limited announced the appointment of three new board directors and the formation of a strategic review committee to enhance long-term shareholder value.

The announcement on 31 October followed pressure from two activist investment firms, D E Shaw & Co and Continental Grain Co, for Bunge to improve operations, according to the Wall Street Journal (WSJ).

Bunge has been subject to takeover proposals from commodity trader Glencore Plc and US agribusiness rival Archer Daniels Midland (ADM).

ADM and Bunge are two of the ‘ABCD’ group of global agribusiness traders – which also

includes Cargill and Louis Dreyfus – that trade in commodity crops such as soyabeans, wheat and corn.

A period of low crop prices and high global supplies in the past few years had challenged these companies, forcing cost cuts and spurring consolidation talks, the WSJ said.

The three new Bunge board directors are Paul Fribourg, chairman and CEO of Continental Grain Company; Gregory Heckman, founding partner of Flatwater Partners; and Henry (‘Jay’) Winship, president of Pacific Point Capital, LLC. A fourth, mutually agreeable independent director was also due to be appointed by the end of 2018. www.ofimagazine.com

12/12/2018 10:01:33

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NEWS

FDA approves health claims for high oleic oils The US Food and Drug Administration (FDA) announced on 19 November that it would allow producers of edible oils that contain at least 70% oleic acid to make qualified health claims (QHC) that their products contain cardiovascular benefits when replacing saturated fats.

FDA commissioner Scott Gottlieb said that qualified health claims on food products were allowed when there was not enough evidence for an authorised health claim. However, the claim “must be accompanied by a disclaimer to communicate to consumers the level of scientific evidence supporting the claim”.

Corbion Biotech petitioned for an autho-

IN BRIEF AUSTRALIA: Cargill is ceasing operations at its cottonseed crush plant in Narrabri, New South Wales (NSW), which had been unprofitable for several years, World Grain reported on 9 October.

Peter McBride, director of corporate affairs for Cargill in the region, said the cottonseed market had changed significantly as whole cottonseed was now a highly valued feed product for the domestic and international livestock markets. There was also a range of alternatives for cottonseed oil, meal and hull.

Cargill's crushing facilities in Newcastle, NSW, and Footscray, Victoria, would continue normal operations.

USA: Canadian grain and oilseed handler Viterra has taken over the largest expeller-press canola processing facility in North America in Warden, Washington, as part of its assumption of full ownership of Pacific Coast Canola (PCC) on 1 November, World Grain reports.

Viterra had worked with PCC since 2016, with PCC crushing canola for Viterra.

The Warden facility opened in 2013 and can produce 136M tonnes/year of canola oil.

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rised health claim in 2016 that would have said that daily consumption of a product containing at least 10g of oleic acid per serving reduced the risk of coronary heart disease. After this was rejected by the FDA in 2017, Carbion Biotech then petitioned for the QHC. “Manufacturers of these oils can choose to include a qualified health claim on their label stating that ‘supportive but not conclusive scientific evidence suggests that daily consumption of about 1.5 tablespoons (20g) of oils containing high levels of oleic acid may reduce the risk of coronary heart disease,’” Gottlieb said. “The claim will also need to make it clear that

to achieve this benefit, these oils ‘should replace fats and oils higher in saturated fat and not increase the total number of calories you eat in a day.’”

Oils meeting the standard included high oleic sunflower oil, high oleic safflower oil, high oleic canola oil, olive oil and high oleic algal oil.

Gottlieb said the FDA examined seven small randomised clinical studies of edible oils containing at least 70% oleic acid. In six of them, those assigned the oils had lower low-density lipoprotein (LDL) and total cholesterol than those assigned a Western-style diet higher in saturated fat.

The seventh study found no difference.

Advoc to produce edible oils for Patanjali Ayurved Abu Dhabi Vegetable Oil Company (Advoc) has partnered with leading Indian consumer goods firm Patanjali Ayurved Limited to produce a range of vegetable oils for the Middle Eastern market.

Advoc would produce a range of sunflower, corn and canola oils for Patanjali under the Patajali name, a 1 November Trade Arabia report said. The edible oil would be available in 750ml, 1.8 litre and 5 litre packages across the Gulf Cooperation Council (GCC) region.

“I am thrilled that we are the preferred partner in edible oils for Patanjali in GCC,” said Advoc owner Dr B R Shetty. “This is an exciting start in the journey of providing benefits to consumers

looking at quality edible oils under the reputable brand of Patanjali.”

Yoga guru and co-founder of Patanjali, Baba Ramdev, added: “Patanjali exists to offer quality products and services to its customers who are considered an extended family. Through the collaboration with Dr B R Shetty’s Advoc, we will constantly strive to improve our offerings for the benefit of all.”

Advoc was acquired by Dr B R Shetty in late 2016. It is a leading provider of edible oils in the Middle East region with flagship brands including Coroli, LiteLife, Sarola, Rooly and Amir and also operates an edible oil refinery in Abu Dhabi, UAE.

New US-Mexico-Canada trade pact welcomed

The new US Mexico Canada Agreement (USMCA) will bring advancements in managing the trade of grains, oilseeds and their derived products in the North American marketplace, says the US National Grain and Feed Association (NGFA).

On 30 Novemeber, leaders of the three countries signed the new trade deal to replace the 1994 North American Free Trade Agreement (NAFTA).

NGFA president and CEO Randy Gordon said during a public hearing on

15 November that the USMCA "maintains and expands current agricultural market access and preserves the dispute-settlement process for anti-dumping and countervailing duty cases".

He noted improvements in the USMCA that would reduce non-tariff trade barriers, including a policy whereby a party that restricts the import of an agricultural product will have to notify and explain their reasoning in five calendar days.

The pact still needs to be ratified by all three countries before it can take effect.

US farmers had quadrupled exports to Canada and Mexico under NAFTA, according to World Grain. www.ofimagazine.com

12/12/2018 10:01:34

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BIOFUEL NEWS

USA to review tariffs on Argentine biodiesel A US decision to review tariffs imposed on Argentine biodiesel could mean a revival for the country’s exporters, the biodiesel chamber of Argentina says.

The US Department of Commerce (USDC) announced on 7 November that there was a “just cause” to review the taxes it applied in February 2018, when it deemed that biodiesel imports from Argentina were sold in the country below fair value, Reuters said.

At the time, the USA was Argentina’s main market for biodiesel.

IN BRIEF NORWAY: Norway will become the first country to stop its biofuel industry buying palm oil, the Independent newspaper reported. A parliamentary decision made on 3 December and set to come into effect in 2020 called for the government “to formulate a comprehensive proposal for policies and taxes in the biofuels policy in order to exclude biofuels with high deforestation risk”.

FRANCE: Oilseed processor Avril launched France’s first biodiesel-only fuel on 8 November made entirely from rapeseed, Reuters said.

Avril planned to produce several hundred thousend tonnes/year of Oleo 100.

Victor Castro, executive director of the Argentine Chamber of Biofuels (CARBIO) said: “We are convinced that tariffs are a totally unfair measure and it is very important to be able to export to that [US] market,” He added that due to low international trade, the production level in Argentine biodiesel plants had been low.

Argentina is a top producer of biodiesel, exporting 1.65M tonnes of the fuel worth US$1.224bn in 2017, according to state statistics agency INDEC. Between January and August 2018,

European Parliament approves REDII

On 13 November, the European Parliament (EP) approved new targets for renewables, energy efficiency and second-generation biofuels when it voted to confirm a provisional agreement on the revised Renewable Energy

EPA finalises volumes for 2019 The US Environmental Protection Agency (EPA) has increased blending volumes for total renewable fuel and cellulosic and advanced biofuels under its finalised 2019 renewable volume requirements (RVOs) released on 30 November, Ethanol Producer magazine reported.

The 2019 RVO will be 418M gallons (1,582M litres) for cellulosic biofuel; 4.92bn gallons (18.6bn litres) for advanced biofuel; and 19.92bn gallons (75.4bn litres) for total renewable fuel. Compared to the 2018 RVOs, the 2019 require10 OFI – JANUARY 2019

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Argentina exported almost 1.1M tonnes of biodiesel, 85% of which went to the EU. However, no biodiesel was exported in September and October, pending an EU decision on whether the country’s biodiesel is subsidised.

The EU cut import duties on Argentine biodiesel at the end of September 2017 after the World Trade Organization ruled in favour of Argentina. The European Biodiesel Board then asked the EU for an investigation, with a final decision due in February.

ment for cellulosic biofuels was nearly 130M gallons (492M litres) higher, with the RVO for advanced biofuel up 630M gallons, (2,385M litres), Ethanol Producer said.

Conventional biofuel volumes, mostly corn ethanol, were maintained at the implied 15bn gallons (57bn litres) statutory target for 2019.

The 2019 RVOs would require total renewable fuel to comprise 10.97% of US transportation, including 2.71% advanced biofuel, 1.73% biomass-based diesel and 0.23% cellulosic biofuel.

Directive (REDII).

Members of the parliament voted in favour of the EU targeting renewables to account for 32% of its energy usage by 2030 and voted to approve a 32.5% increase in energy efficiency by 2030.

Each member state will also be required to present a 10-year national energy and climate plan with targets, policies and measures by the end of 2019 and every 10 years after.

The EP said these targets would be reviewed in 2023 but can only be raised, not lowered.

Second-generation biofuels must provide at least 14% of transportation fuel by 2030. From 2019 until 2030,

first-generation biofuels will be steadily phased out because they are considered to have a high risk for indirect land use change.

The new rules were due to be published in the Official Journal of the EU and will be enforced 20 days after publication to be directly applied to all member states.

The European renewable ethanol association, ePURE, said the EP’s adoption of REDII provided a more effective approach to decarbonising transport but warned that it would be up to member states to put in efforts to make it a reality. ePURE said REDII confirmed both the imoprtance of first and second-generation ethanol.

Total delays biofuel refinery start-up French oil and gas giant Total SA has delayed the start-up of its 500,000 tonnes/year biofuel refinery in La Mede to the first quarter of 2019, Reuters reports.

Total chief financial officer Patrick de la Chevardiere made the announcement on 26 October but did not give a reason for the delay. Total was granted a license on 16 May to use palm oil at La Mede provided that at least 25% of its feedstock would be recycled oils.

This project has been seen as controversial by French farmers, who are concerned that cheap palm oil feedstock will lead to unfair competition. Farmers blockaded Total’s oil depots and facilities last June.

Total has pledged to buy 50,000 tonnes/year of French rapeseed oil for the refinery, Reuters wrote.

It said the facility’s feedstock would comprise 60-70% vegetable oils, with a limit of 300,000 tonnes/year of crude palm oil. The remaining 30-40% share would come from recycled animal fat, cooking oil and industrial oil. www.ofimagazine.com

12/12/2018 10:50:14

BIOTECH NEWS IN BRIEF USA: Pivot Bio and Monsanto announced a research collaboration on 8 November to develop Bradyrhizobium strains with enhanced nitrogen production to support better yields in soya production. The strains are to be field tested in 2021.

SOUTH AMERICA: Bayer announced on 15 November that a five-year peer review study showed that its Intacta RR2 PRO soyabeans had led to a 30.6% reduction in environmental impact due to a 10.4M kg reduction in insecticide and herbicide usage.

Since 2013, farmers had planted 73.6M ha of Intacta RR2 PRO soyabeans across Argentina, Brazil, Paraguay and Uruguay, Bayer said.

Groundskeeper accepts reduced cancer damages in Bayer case A groundskeeper has accepted reduced punitive damages on 31 October after suing Bayer AG’s Monsanto unit for using glyphosate-based weed-killer that allegedly gave him cancer of the lymph system, reports Reuters.

Dewayne Johnson was awarded damages of US$289M on 10 August but Judge Suzanne Bolanos of San Francisco’s Superior Court of California ordered the amount to be slashed to US$78M on 22 October to correspond with California and federal law.

In a statement, Johnson’s law firm said that he accepted the reduction “to achieve a final resolution within his lifetime”.

The verdict against Monsanto had slashed its value by 10%, The company now faces over 9,300 US lawsuits over glyphosate but claim years of studies have shown that it is safe for human use provided it is used correctly.

Dewayne Johnson sued Monsanto in 2016, claiming that its weed-killers, Ranger Pro and RoundUp, had been the cause of his cancer.

The US Environmental Protection Agency has found that glyphosate is not a carcinogen and is an approved chemical. However, in 2015, the cancer unit of the World Health Organization found that glyphosate is “probably carcinogenic to humans”.

In its 10 August verdict, the jury found that Ranger Pro and RoundUp were responsible for Johnson’s cancer and Bayer had failed to warn consumers of the risks.

German chemicals and pharmeceuticals Bayer - which bought Monsanto for US$63bn in June – has denied that glyphosate can cause cancer and will be appealing the verdict, saying there was no supporting evidence presented at the trial.

Johnson could either accept the reduced award or face a new trial over punitive damages.

His lawyers have said that they will challenge the amount of damages during Bayer’s appeal.

Johnson’s trial was fast-tracked because of the severity of his cancer, Reuters wrote.

USA approves new GM cottonseed US regulators have approved the cultivation of a new GM cotton plant, which act as a protein-packed food source in countries suffering from malnutrition, Reuters reports.

The plant was developed by a team at Texas A&M University, led by biotechnologist Keerti Rathore. The cottonseed has had the toxic chemical, gossypol, removed using a process called RNA interference, leaving only natural levels of gossypol to protect the plant against insects and disease.

Rathore said that after cottonseed oil had been extracted from the plant, the remaining high-protein meal could find many uses.

The US Department of Agriculture

Animal and Plant Health Inspection Service lifted the regulatory prohibition on cultivation on 16 October. However, the new GM cottonseed cannot be used for human or animal consumption yet because it has not gained approval from the US Food and Drug Administration.

Cotton is grown around the world in about 80 countries to make textiles.

Rathore said the cottonseed from the new cotton plant could be used to make flour for breads or in protein bars, while whole cottonseed could be consumed as a snack or made into a peanut butter-type paste.

He added that if all current cottonseed could be used for human consumption, it could meet the protein requirements of 575M people.

For this new cotton plant to be produced, every country would have to give regulatory approval, Reuters said.

EPA introduces new restrictions on Bayer’s dicamba herbicide The US Environmental Protection Agency (EPA) announced on 31 October that it would allow the use of Bayer AG’s controverstial dicamba weed killer for another two years but would apply restricitons, Reuters reports.

“By extending the registration for another two years with important new label 12 OFI – JANUARY 2019

Biotech news 2.indd 2

updates that place additional restrictions on the product, we are providing certainty to all stakeholders for the upcoming growing season,” said EPA acting administrator Andrew Wheeler.

Farmers had complained for several years that dicamba drifted away from where it was sprayed on soya and cotton

crops, to neighbouring plants – such as fruit trees and flowers – that were not engineered to resist it.

The EPA will prohibit the use of the dicamba on soyabeans 45 days after planting, and 60 days on cotton, and has limited the times it can be used.

Farmers have been awaiting the EPA’s new restrictions to

determine if they will order dicamba-resistant seeds to plant in 2019, wrote Reuters.

Bayer announced on 29 November that it would cut 12,000 jobs in a major restructuring with the crop science division set to be hit the hardest with 4,100 posts being cut.

Bayer said it expected to finish cutting posts by 2021.

www.ofimagazine.com

12/12/2018 10:16:19

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OFI – JANUARY 2019

13

TRANSPORT NEWS IN BRIEF WORLD: The ‘ABCD’ group of global agribusinesses have announced plans to work together to digitise global agricultural shipping transactions.

“Initially, Archer Daniels Midland (ADM), Bunge Ltd, Cargill Incorporated and Louis Dreyfus Company are focused on technologies to automate grain and oilseed post-trade execution processes, as they represent a highly manual and costly part of the supply chain,” ADM said on 25 October.

Companies wanted to replacing manual, paper-based processes with a more digitally-based approach to streamline data transfer to customers, leading to lower shipping costs, storage and wait times.

CANADA: Ceres Global Ag Corp announced on 14 November that it had signed a long-term agreement with London Agricutlural Communities (LAC) to provide storage and handling services from its Port Colborne, Ontario, export grain elevator, effective on 1 July 2019. Ceres will continue to operate the elevator, with the majority of its storage to be used for LAC’s products, such as soyabeans, wheat and corn. Ceres will also provide recieving, drying and loading services.

CANADA: Grain company Parrish & Heimbecker (P&H) plans to build and operate a new grain terminal in Surrey, British Columbia, reports World Grain.

P&H said the Fraser Grain Terminal would provide 4M tonnes/year of handling capacity for canola meal, distillers dried grains, malt, soyabeans, grains and oilseeds. It would have three shiploaders and an enclosed above ground conveying system. Construction was due to start in late 2018 and be completed in two years.

14 OFI – JANUARY 2019

Transport news jan 2019.indd 2

Low Rhine water level hits prices and shipping of rapeseed, biodiesel Record low water levels since summer along the Rhine river, the main European shipping artery, have jeopardised shipments of commodities, including rapeseed and rapeseed biodiesel, as well as chemicals and coal.

On 22 October, the water level at Kaub – the key choke point for inland shipping on the Rhine – dropped to 25cm, the lowest level since records began in 1880, Montel reported. Full barge loading requires 1.50m.

The low levels had prevented rapeseed from being shipped to crushing plants and finished biodiesel rapeseed methyl ester (RME) from being moved, as well as filling up storage space and pushing up freight rates, according to S&P Global Platts.

There had been an ongoing struggle to move inland rapeseed to ARA (Antwerp, Rotterdam, Amsterdam) for crushing and biodiesel produc-

tion, with some producers sourcing rapeseed from the Black Sea to alleviate pressure. The difficulties in moving biodiesel, coupled with winter demand for RME’s superior cold properties, had pushed up prices, one source told Platts.

RME prices rose to an all-time high on 9 November to US$1,422/tonne FOB ARA. “With the water levels hindering many commodities, alternative methods of moving product such as rail and truck are fully booked and did not appear to be able to offer much help to the situation,” Platts said.

Robin Girmes, a meteorologist at Energy Weather, told Montel that with the start of the cold – and dry – winter season, the outlook for rain in relevant areas had declined, making recovery relatively unlikely for December.

He added that it would take five days of rain to make the Rhine fully shippable.

USA on brink of a storage crisis for soyabeans

Storage costs for US soyabeans are expected to be at a premium this season as it will need to fight for space along with corn and wheat crops, World Grain says.

Soya production is forecast by the US Department of Agriculture (USDA) to hit 4.69bn bushels this year, 6% more than in 2017, according to its 11 October crop report.

With China spurning US soyabeans in its trade war, the USA faces a glut of beans as supplies carry over from the 2018/19 marketing year.

“It’s going to put a lot of pressure on the grain storage system in those states where you have the most grain.” said Stephen Nicholson, vice-president of Rabobank AgriFinance.

The Dakotas and other Northern states would suffer most from storage limitations after the decimation of the Chinese export programme which used to transport soyabeans from the Pacific Northwest. Growers would now have to use river and routes to the Gulf of Mexico.

Producers in those states may be driven to use temporary storage options, such as silos and harvest bags.

“We’ve got some business, we just need to redirect a lot of it,” an industry source said.

Pakistan to build new grain terminal in Karachi State-run Pakistan National Shipping Corporation (PNSC) is planning to build a new terminal in Karachi to ease pressure on the country’s only dedicated grain and oilseed facility at Port Qasim.

“This terminal, once established, will divide the shipping traffic load at Port Qasim,” said PNSC executive director Rashid Siddiqi.

Port Qasim had been struggling to meet the needs of oilseed, cereal and fertiliser

shipments, with some ships having to wait three weeks to discharge cargo, a Bloomberg report said on 22 October.

The new terminal, which is expected to have cargo handling capacity of 1,600 tonnes/hour, will cost about US$200M and investors include the PNSC, Karachi Port Trust and a private company.

Siddiqi said there were also plans to build oil storage facilities at local ports and the new grain terminal project

had been presented to port and federal government ministries for approval and was expected to be completed in a year.

The terminal would help boost profit and sales for PNSC, which had been in decline for six years, said Bloomberg. PNSC had been affected by a slow international liquid cargo market due to a government ban on furnace oil imports which was only lifted this year. www.ofimagazine.com

12/12/2018 10:25:34

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RENEWABLE NEWS Neste to develop sustainable materials with Clariant Finnish renewable diesel producer, Neste, has signed an agreement with Swiss speciality chemicals company Clariant to produce new sustainable materials to benefit future generations.

The companies will start replacing fossil-based ethylene and propylene used in Clariant’s hot-melt adhesives with monomers derived from Neste’s renewable hydrocarbons, produced from renewable raw materials, such as waste and residue fats and oils as well as vegatable oils.

In a later phase, renewable additives would be developed for plastics and coat-

ing applications.

“This will enable us to help various sustainability-focused brand owners to increase their bio-based offering,” Neste said in a press release on 6 November.

“Collaboration with Clariant marks an essential step forward in Neste’s quest to become a preferred partner as a provider of sustainable chemicals solutions for forerunner brands,” said Peter Vanacker, president and CEO of Neste.

Clariant vice president Gloria Gang said: “For society, our environment and future generations, it is our responsibility to

improve sustainability performance and reduce our carbon footprint and dependency on crude oil.

As a result of Clariant’s partnership with Neste, we can progress our goal to become a true sustainable solution provider in the additive market.”

Neste is the world’s largest producer of renewable diesel refined from waste and residues.

Clariant is a leading producer of speciality chemicals with a focus on care chemicals, catalysis, natural resources and plastics and coatings.

IN BRIEF

Coconut oil could replace DEET in insect repellent

USA: A start-up company from the University of Delaware, has combined 50% plant waste and 50% vegetable oils to make a bio-based oil.

RiKarbon founder Basudeb Saha said he was working with several companies to test the product in skin care and lubricant applications.

727M litres/year of petroleum-based industrial lubricants are released due to leakage or disposal from marine vessels and hydropower production turbines into the ocean.

Some skin lotions also had harmful ingredients which were not water soluble.

The adverse effects on the ocean’s ecosystem had prompted the search for safer alternatives.

A US Department of Agriculture (USDA) study has revealed that compounds from coconut oil are better at repelling biting insects than diethyltoluamide (DEET), the most common ingredient in most insect repellents.

The USDA said on 31 October that growing health concerns and regulations on synthetic repellents had prompted the development of plant-based alternatives.

USDA Agricultural Research Service (ARS) scientists had identified specific coconut oil fatty acids with strong repellency and long-lasting effectiveness.

A team of scientists led by Junwei Zhu, with the ARS Agroecosystem Management Research Unit, found that coconut oil compounds were effective for two weeks against biting insects and had

RUSSIA: Italian bioplastics firm Bio-on SpA has signed a US$20M licensing and production deal with Russian industrial investment firm TAIF JSC, which includes plans for a PHA bioplastic plant to be built in Tatarsan. TAIF was expected to invest US$102.7M in the plant, which would have a production capacity of nearly 10,000 tonnes/year and was set to be operational by 2020, Bio-on said on 24 October.

16 OFI – JANUARY 2019

Renewables jan 2019.indd 1

a lasting repelling effect on ticks for one week.

Coconut oil is not a repellent, stressed Zhu. However, the oil-derived free fatty acid mixture consisting of lauric, capric and caprylic acids – with their corresponding methyl esters – acted as a strong repellent. This was achieved by encapsulating coconut fatty acids into a starch-based formula, which protected cattle from stable flies for four days. While

DEET was only 50% effective against the stable flies, the coconut oil was 95% effective, the USDA said.

Against bed bugs, the coconut oil compound lasted two weeks whereas DEET lost its effectiveness after three days. The coconut oil fatty acids were more than 90% effective against mosquitoes.

The USDA said ARS had filed a patent application for the repellent.

Waste cooking oil recycled as controlled-release feritliser Waste cooking oil has been used to make a controlled-release fertiliser which results in less wasted nutrients and better plant health, reports The Lead South Australia.

The fertiliser uses waste canola oil and sulphur to form a degradable polymer coating to encase each fertiliser pellet.

Dr Justin Chalker and his team at Flinders University of South Australia developed the fertiliser at the Institute for NanoScale Science and Technology.

“You can use it [canola oil] for frying food and then you can use it again for something that’s used to grow more food,” said Dr Chalker.

“What’s unique about our material compared to other slow release fertilisers is the material that holds in the nutrients is made entirely from waste and can degrade.”

Testing was carried out on tomato plants and showed the nutrients were released in a controlled fashion, resulting in less wasted fertiliser and better health for growing plants.

An estimated 50% of fertilisers currently applied to crops were not used by the intended plants because of runoff and leaching, the report said.

Dr Chalker said larger scale trials would now go ahead. www.ofimagazine.com

10/12/2018 13:19

DIARY OF EVENTS i21-22 January 2019 Fuels of the Future 2019 Berlin, Germany www.fuels-of-the-future.com

Bursa Malaysia to host POC2019 Walk-in rate: RM3,800 / US$950

5-6 February 2019 Globoil India 2019 Leela Ambience Gurugram Hotel & Residences Gurugram, India www.teflas.com 11-13 February 2019 Renewable Fuels Association National Ethanol Conference Orlando, Florida, USA. www. nationalethanolconference. com 12-14 February 2019 International Rendering Symposium at the International Production & Processing Expo (IPPE) Georgia World Congress Center, Atlanta, USA www.ippexpo.org

Mark your calendar from the 4-6 March 2019.

The 30th Annual Palm and Lauric Oils Conference & Exhibition: Price Outlook 2019/2020 (POC2019) will be held at the Shangri-La Hotel, Kuala Lumpur, Malaysia.

Conference rates for POC2019 are: Early bird offer: RM2,600 / US$650 – Bursa member rate RM2,800 / US$700 – Non-member rate

Join the global congregation of the palm and edible oils industry professionals at the 30th Annual Palm & Lauric Oils Conference & Exhibition: Price Outlook 2019/2020 (POC2019).

This event will be held from 4-6 March 2019 in Kuala Lumpur.

This event has upheld its core intention of providing valuable interaction opportunities for delegates to discuss trade possibilities, market trends and keep abreast of the latest price forecasts that will impact their respective businesses. Thought-provoking inputs from speakers and their comments will be key takeaways as discussion and analysis among delegates continue even after the event is over.

Becoming a sponsor will maximise this platform and further elevate corporate visibility, while allowing the promotion of products and services to the delegates at POC2019.

For sponsorship enquiries and other information, please contact: POC2019 Secretariat Email: poc@bursamalaysia.com Website: www.pocmalaysia.com

Normal rate: RM3,000 / US$750 – Bursa member rate RM3,200 / US$800 – Non-member rate

20-22 February 2019 Fats & Oils International Conference - Exhibition Lalit Hotel, Mumbai, India. www.otaiwz-foic2019.org/ index 4-6 March 2019 Palm & Lauric Oils Conference & Exhibition (POC) 2019 Kuala Lumpur, Malaysia www.pocmalaysia.com 1-3 April 2019 World Bio Markets 2019 Passenger Terminal Amsterdam, the Netherlands www.biobasedworldnews. com/events/ world-bio-markets 4-5 April 2019 3rd Sustainable Oils & Fats International Congress The National Horticulture Society of France, Paris, France www.fat-associes.com/en/ home/

10-11 April 2019

3-5 June 2019

25-27 September 2019

Black Sea Grain 2019 Intercontinental Hotel Kyiv, Ukraine www.ukragroconsult.com/ bsg/2019/en/conference

CESIO 11 World Surfactant Congress Infinity Hotel & Conference Resort Munich, Germany www.cesio-congress.eu

Globoil India Renaissance Mumbai Convention Center Hotel Mumbai, India www.teflas.com/

28-30 April 2019 Globoil International JW Marriott Marquis Dubai, UAE www.teflas.com 5-8 May 2019 110th AOCS Annual Meeting & Expo America’s Center Convention Complex, St Louis, USA www.annualmeeting.aocs.org 14-17 May 2019 The 9th ICIS World Surfactants Conference Jersey City, USA www.icisevents.com ehome/ index.php?eventid=200178918

For a full events list, visit: www.ofimagazine.com www.ofimagazine.com

Diary jan19.indd 1

th

10-12 June 2019 2019 International Fuel Ethanol Workshop & Expo Indianapolis, USA www.fuelethanolworkshop. com/ema/DisplayPage. aspx?pageId=Home

20-23 October 2019 17th Euro Fed Lipid Congress Seville, Spain https://veranstaltungen.gdch. de/tms/frontend/index. cfm?l=8455&sp_id=2 19-21 November 2019

EFPRA Congress 2019 La Baule, France www.efpra.eu/ efpra-congress-2019-france/

International Palm Oil Congress & Exhibition (PIPOC) 2019 Kuala Lumpur Convention Centre, Malaysia http://pipoc.mpob.gov.my

16-19 June 2019

20-23 September 2020

12-15 June 2019

15th GCIRC International Rapeseed Congress Berlin Congress Center Germany www.irc2019-berlin.com

18th Euro Fed Lipid Congress and Expo Leipzig, Germany www.eurofedlipid.org/ meetings/leipzig2020/index.php OFI – JANUARY 2019

17

12/12/2018 10:40:06

INTERNATIONAL MARKET REVIEW

Sowing the seeds of change CRUDE VEGETABLE OIL PRICES monthly averages (except palm, rbd)

2,500

2,000

18 OFI – JANUARY 2019

John Buckley.indd 2

Rape

Source: John Buckley

Sun

1,000

Palm

500

0

CBOT soybeans

Table 1: Crude vegetable oil prices, monthly averages (US$/tonne) less weak then expected?

I

1800 1600 1400 1200 1000 800 600

Source: John Buckley

cents/bushel

t is likely that 2018 will go down as one of the pivotal points in oils and fats market history – having possibly sown the seeds of change for years to come.

For soyabeans especially, it has been a year of immense market shocks. In the USA, record planted area paved the way for a big 2018 crop but no one in the early summer foresaw a yield bonus delivering anything like the 125.2M tonnes recently forecast by the US Department of Agriculture (USDA).

The jump in US sowings was a predictable answer to a failed Argentine crop earlier in the year. But who would have thought the USA would also throw away its top overseas outlet, starting a trade war with China that lumbered its exporters with a 25% trade tariff?

Cue Brazil’s inevitable response – taking maximum advantage of China’s search for alternative suppliers and aiming for another giant crop. Argentina seems to be formulating similar, possibly even more ambitious, plans to exploit the USA’s selfinflicted handicap and embed a broader, long-term presence in the Chinese market.

That’s if China actually does need its soya supplies to grow at anything like the rate of past years. Its government suggests otherwise, that it may reduce dependence on imports by cutting down drastically on soya meal consumption and using more alternative proteins instead.

But will that actually happen if soya supplies remain large enough to keep them reasonably priced? Or if the trade war with the USA is resolved (as now seems possible), renewing access to cheaper soya? At this stage, it’s anybody’s guess. However, given China’s growing population and economy, it may be unwise to assume a switch in feed sources will automatically go as its government plans.

Whether or not US trade does continue to pick up, the bottom line for the soya

Soya

1,500 $/tonne

2018 has been a year of major market shocks, particularly with soyabeans, which has seen a major supply surplus, and a trade war which has hit US soya exports to China with a prohibitive 25% trade tariff.

John Buckley

400 200 0

Table 2: CBOT soyabean prices (US cents/bushel)

market is surplus – and yet more surplus.

Even after the last Argentine crop shortfall, world carryover stocks remained at the abnormally high level of almost 100M tonnes (up more than 2M tonnes from 2016/17) against the previous five-years’ average of 66M tonnes. If Latin American crops come through as expected this season, stocks will jump again to a new peak of 112M tonnes.

US soyabean export sales so far this season have risen significantly to Mexico, Europe and, surprisingly, Iran. Noteworthy too has been former rival exporter Argentina importing a hefty 1.4M tonnes of US beans to keep crush capacity filled and defend its share of product export markets. Yet these gains have gone only partway to replace lost Chinese business, with total US exports still running almost one-third behind the previous year’s.

No wonder the USDA and other analysts see producers slashing planted area in spring – forecasts ranging from 2-4M lost hectares. Taking the recently popular 33.5M ha area figure and multiplying it by the past two years’ yields gives a possible 2019 US crop of 112-117M tonnes. Add to that the 26M

tonnes of beans expected to be carried in from the 2018 season and the USA still ends up with a huge supply.

Against that backdrop, the CBOT (nearby) soya futures might be thought to have done well to have hung around US$9/bushel rather than 2018’s lows of US$8/bushel (see Table 2, above).

But can that semblance of stability last into 2019, if large Latin American crops come through as planned? Brazil has planted more rapidly this year, will probably expand hectarage and was enjoying good moisture to get crops up and running as we went to press. Local analysts’ early forecasts are ranging from 123-130M tonnes against last year’s 120M tonnes.

Argentina has had some early dryness issues but nothing like 2017’s drought. At this stage, the USDA forecast of 55.5M tonnes for its 2019 crop seems the least it will achieve. The top numbers would add 32M tonnes to next year’s main South American crops.

For the longer term, the USDA sees no rapid recovery in US soyabean hectares but, at best, a slow, steady rise back to 34.6M ha over the next decade. www.ofimagazine.com

17/12/2018 10:03

INTERNATIONAL MARKET REVIEW

Can palm recover trade growth?

In the past year, palm oil’s market focus has shifted from recovering supply to lack of demand.

A two-year rebound from 2015/16’s El Niño year of unusual falling output had added over 10M tonnes to supply and another 3M tonnes could be coming in the recently started 2018/19 season. The big challenge is to find homes for all the extra production.

Palm oil demand has been struggling on several fronts. The weak currency of top importer/consumer, India, has reduced its spending power. Higher import duties have also been imposed to bolster the country’s own stagnating oilseed production.

China continues to concentrate its demand growth on soyabean oil in its search for alternatives to palm.

The negative environmental/dietary image of palm oil in Europe has also resulted in threats to cut its use in biodiesel and food, although some of Europe’s harshest proposals seem to have been postponed for now.

Currently, the USDA still expects India to take about 1.2M tonnes more palm oil for 2017/18 but European demand continues to erode (the bloc’s food sector www.ofimagazine.com

John Buckley.indd 3

World soybean surplus

Rapeseed supply tightens

120 100

60 40 20 0

Table 3: World soyabean surplus (million tonnes)

Source: John Buckley

mn tonnes

80

World sunoil production 20 18 16 14 12 10 8 6 4 2 0

Table 3: World sunflower oil production (million tonnes)

Source: John Buckley

mn tonnes

Will a US cutback mean a steadying in prices? Much depends on whether China is exposed again to dependence on US beans and how successfully Latin American producers consolidate their growing shares in this market – not to mention smaller soya producers like Russia and Canada, keen on feeding Chinese deficits as well. Only time will tell. In the meantime, other possible longer term ramifications include a stimulus to Canadian and other countries’ rapeseed, corn and wheat sowing plans with possible consequences for crop values on those markets.

US soya suppliers may at least console themselves that their domestic crush is outperforming earlier forecasts, partly meeting expanded meal export demand, partly responding to good crush margins from cheaper beans. The October 2018 crush by National Oilseed Processors Association members rose to a new record high for any month of 4.69M tonnes from September’s 4.38M tonnes while seasonal crush is expected to reach about 56.6M tonnes compared with the previous threeyear average of 51M tonnes.

US soya meal consumption is growing by about 1M tonnes/year and US biodiesel use of soya oil by almost 300,000 tonnes this season, accumulating a two-year increase of 726,000 tonnes.

alone is expected to take about 600,000 tonnes less than five years ago).

Therefore, despite expansions in some smaller markets, palm oil trade has been stubbornly disappointing, leaving the recently finished 2017/18 season with no growth at all. That compares with an average gain of over 2M tonnes/year in the last decade, peaking at 5M tonnes in 2016/17.

Origin stocks have predictably risen to new record levels (forecast at more than 10M tonnes for the end of 2018/19).

The prospect of further stock increases and a still uncertain demand outlook has recently pushed prices down to US$460s/ tonne – the lowest level for three year.

One bright sector has been origin use for biofuel, consuming an extra 3M tonnes in the past three years and expected to add another 1M tonnes in 2018/19, making it easily the fastest growing outlet.

Both Malaysia and Indonesia are raising palm biodiesel blends.

In food outlets, Pakistan, other Asian and some Middle Eastern countries lead a host of medium/smaller importers continuing to respond to ever-cheaper palm prices. However, their imports would be higher if weak currencies were not denying many of them the full benefit in terms of landed costs.

Crop setbacks have tightened the supply outlook for rapeseed but record sunflower oil output is growing market share in key food oil outlets, especially in the EU. A notable exception for rapeseed was Canada’s canola crop, similar to 2017’s and supplemented by larger than expected carryover stocks (up about 1M tonnes on the year). That has enabled crushers to maintain oil production while expanding canola exports, much of the latter meeting China’s growing demand.

Another plus point has been a record large Ukrainian crop – 2.7M tonnes versus 2017’s 2.2M tonnes and 2016’s 1.25M tonnes, enabling more exports to markets, led by Europe However, the EU crop was a big disappointment as summer droughts, heat waves and other weather issues cut initially promising production by some 2.5M tonnes, reducing crush and raising import needs. Australia’s crop also fell to just 2.2M tonnes from 2017s 3.7M tonnes – a setback that will limit this key exporter’s role in world trade in 2019.

Against that, demand for rapeseed oil has softened, especially in the European industrial sector, where it has lost an estimated 400,000 tonnes. Along with downward pressure from large alternative oil supplies, this has helped rein in rapeseed oil’s firmer tendency, if allowing it to command larger price premiums against other soft oils and palm.

The current supply outlook shows little sign of improvement. Dry conditions and relatively firmer wheat prices have resulted in key EU member states cutting sowings sharply, although Ukraine has exceeded its planting plan. Russia has also been expanding planting and may do so again in 2019.

Sunflower crops turned out much better than expected in 2019 with moisture at the right time boosting yields in Russia and Ukraine. Russian farmers also raised their sown area. The USDA has the former Soviet region producing 27.5M tonnes in total, against 2017’s 25M tonnes.

The new season to date has seen strong Russian and Ukrainian crush and record exports of sunflower oil. Key Russian markets include China, Egypt, Iran and Turkey while China and India have been key buyers from Ukraine.

However, the unexpected supply bonus, export competition between Russia and Ukraine, and downward price pressures exerted by the oil complex in general have reduced sunflower values, possibly questioning whether these countries will grow as much in 2019.

● John Buckley is OFI’s market correspodent OFI – JANUARY 2019

19

17/12/2018 10:03

LAURIC OILS

India’s coconut potential India is the world’s largest coconut producer by output, but to fully answer the ever growing global demand, the country’s coconut industry must solve several pressing issues.

Ile Kauppila

I

n India, the coconut is sometimes called Kalpavriksha or ‘the tree of abundance’.

The name is well earned. Coconut can be used to produce a great variety of products and ingredients, among them coconut oil and water, charcoal, activated carbon and coconut fibre. It is no surprise then that coconut is a significant crop in global trade, with world production of roughly around 59M tonnes and a total value of around US$71.2bn, based on 2016 statistics.

The coconut is also important for India, which is one of the world’s leading coconut producers. According to B N S Murthy, chair of the Indian Ministry of Agriculture and Farmers’ Welfare’s Coconut Development Board (CDB), coconut palm provides food security and livelihood opportunities for more than 12M people in the country who look after 5M coconut holdings. It also contributes roughly Rs250bn (US$3.78bn) to the Indian GDP and brings in export revenues of around Rs43.6bn (US$661M)/year.

With a growing global demand for coconut products, such as activated carbon and coconut water, and a current health boom centred on coconut, it seems there is a good opportunity for India to increase the significance of coconut to its economy. However, there are significant hurdles the country must first overcome if it wants to turn this potential into reality.

Industry in numbers

The coconut in India is predominantly a smallholder farmed crop, with approximately 98% of holdings owned by 20 OFI – JANUARY 2019

India coconut NEW.indd 2

small and marginal farmers, says Murthy.

In the 2016/17 season, the estimated coconut planted area was roughly 2.1M ha, which produced around 22.2bn coconuts. Both area and production increased from the previous year by roughly 0.38% and 0.32%, respectively.

Overall, Murthy says that coconut production in India has decreased by around 1.95% between 2012 and 2017 due to unfavourable conditions.

Nonetheless, when measured based on production numbers, India is the world’s leading coconut producer.

Coconut production in India is concentrated in four southern Indian states – Kerala, Tamil Nadu, Karnataka and Andhra Pradesh. Together, these states account for 88.87% of planted area and 90.81% of coconut production in India.

Kerala is the leader among the four, being alone responsible for 36.86% of planted area and 33.57% of production.

Among the major coconut-based products, coconut oil is one of the most significant. CDB director Jnanadevan

R says that in 2016/17, coconut oil production in India was estimated at roughly 600,000 tonnes, representing 13% of global production. Coconut oil production was up 9.8% from 546,000 tonnes in 2015, although still below the 608,000 tonnes reached in 2012.

This output places India as the third largest coconut oil producer behind the Philippines and Indonesia, which respectively contribute 45% and 29% of global production. Together, the three countries account for around 88% of global production. Within India, coconut oil is the fifth largest edible oil product behind rapeseed, cotton, soyabean and castor, responsible for 10.94% of total Indian edible oil production.

Coconut oil is produced mostly through one of two processing routes. One of them is the drying process, which uses copra – dried coconut kernel – as a feedstock. Copra has one of the highest oil content among all oil crops, around 6568%. The second route is wet processing route, which uses coconut milk, producing www.ofimagazine.com

17/12/2018 10:10

LAURIC OILS

Growing exports

Coconut products, on average, generate roughly Rs43.6bn (US$661M) annually in export revenues for India. In 2016/17, total Indian coconut product exports (excluding coconut fibre or coir) were valued at Rs20bn (US$314M), says Murthy. This represented a huge 43.26% increase from the Rs14.5bn (US$220M) registered in the previous financial year. Up to January 2018, the 2017/18 marketing year had seen exports valued at Rs14.7bn (US$229M), already surpassing the 2015/16 total.

The single largest item exported on the list of coconut products in 2016/17, in terms of both quantity and value, was activated carbon, which accounted for 39% of all coconut product exports.

A significant export increase was also registered for desiccated coconut, coconut oil and copra, Murthy says.

With coconut oil specifically, exports jumped from 8,550 tonnes in 2015/16 to 33,540 tonnes in 2017/18, or from 1.57% of total production to 5.59%. Jnanadevan attributes the growth – in addition to the general growing demand for coconut oil – to the Indian government in June 2013 eliminating the export restriction that only allowed coconut oil to be exported in consumer packages of 5kg or less.

India exports only 5.6% of its total coconut oil production, with the rest going into domestic use. Jnanadevan says that, in the last two decades, coconut oil has suffered from a bad reputation in India due to reports of it adverse health effects.

CBD-sponsored research has, however, fought against this and domestic coconut oil demand in India has improved.

VCO has also experienced significant demand growth from outside India, mostly from the nutrition and health markets where it is marketed as a “wonder oil”, according to Jnanadevan. Estimated VCO production in 2016/17 was 18,000 tonnes, of which 500 tonnes was exported. While still small-scale, the VCO industry could see significant growth.

The major export destinations for www.ofimagazine.com

India coconut NEW.indd 3

CNO exports (‘000 tonnes)

Total CNO production % of total (‘000 tonnes) production exported

2011/12

6.52

588

1.11

2012/13

6.83

608

1.12

2013/14

7.07

563

1.26

2014/15

6.94

523

1.33

2015/16

8.55

546

1.57

2016/17

33.54

600

5.59

Source: Coconut Development Board

a final product that is known as virgin coconut oil (VCO).

Of these two routes, the copra route is more common and roughly 39% of India’s total coconut production is used to make copra. In 2016/17, Indian copra production was estimated at 1.246M tonnes, of which 973,000 tonnes was milling copra for oil production. The situation with copra mirrors that of general coconut production, with the Philippines (36%), Indonesia (28%) and India (22%) leading global production.

Table 1: Coconut oil (CNO) export and production trends in India

fresh Indian coconuts, says Murthy, include China, Iran, Oman, Saudi Arabia and the United Arab Emirates (UAE), while copra has attracted interest from Bangladesh, Hong Kong, Iran, Nepal and Vietnam. Activated carbon – the major export product – is in high demand in the Netherlands, Russia, South Korea, the UK and the USA. Coconut oil from India finds its way to countries and regions such as Australia, France, the Middle East, Japan, Russia and the USA. VCO – a non-traditional coconut product – is also seeing good demand from the same markets, along with Brazil and Mexico. Coconut water and coconut MINCLEAR milk powder see the highest demand in the Middle East and North America.

to competition from other oils. Coconut oil prices are usually at their highest around November, when production is slowest, while the lowest prices generally occur around April and May during the peak production period. According to Jnanadevan, the seasonal variation is more due supply factors than demand, which stays steadier throughout the year.

However, since early 2017, unusually high coconut oil prices have been a thorn in the side of the Indian coconut sector.

Jnanadevan says that at the start of 2017, the coconut oil price was Rs124/kg (US$1.77/kg). Within the next 10 months, the price had to Rs223/ u 87X128-OK.pdf 1 climbed 1/6/17 77.58% 9:25

www.tolsa.com

High prices

The price of all coconut products, including raw coconuts, is linked to the prevailing supply and demand of coconut oil and its derivatives, says Jnanadevan.

While this link causes massive fluctuations in the prices of coconut products in India, it is not a condition unique to the country but is experienced in all coconut-growing countries around the world. Jnanadevan says the coconut oil economy dominates the coconut market in each country.

The fluctuations are for the most part due to annually changing market conditions caused by seasonal variation in production, in addition C

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21

17/12/2018 10:10

LAURIC OILS a significant price increase between 2015 and 2017, with the average worldwide coconut oil price climbing from US$1,100/tonne in 2014 to US$1,603/ tonne in 2017, an increase of 44.41%.

An all-time price high was reached in India in January 2018. However, by May, the price had decreased by nearly 25%, according to Oil World figures.

Stumbling blocks

Nonetheless, high prices highlight two major issues the Indian coconut sector is facing. The first one is surging demand within India and globally. Coconut’s improved health image around the world is driving demand for products such as coconut oil, VCO and coconut water.

Out of the Indian total annual coconut crop, 45% is used as mature nuts, 39% is used for copra and 16% is consumed for drinking purposes. Out of the mature nuts, 90% is used for domestic purposes and only 10% is converted into valueadded products such as desiccated coconut, coconut milk and other products.

Jnanadevan says such a market structure makes the Indian coconut sector commercially inflexible and underlines the urgent need to restructure existing consumption patterns by increasing the emphasis on value added-products to answer growing demand.

This, however, brings the issue around to the second major problem Indian coconut producers are struggling with.

Namely, the industry has been unable to significantly increase its production. The supply deficiency is also exacerbated by several different factors including farmers swapping to more lucrative crops, low ROI on coconut and the prevalence of pests and disease. In addition, land in the major Indian coconut state, Kerala, has been redistributed to other, more profitable purposes such as real estate and commercial building, due to the rapid rate of urbanisation.

Jnanadevan says Kerala’s share of total copra production, for example, has declined from 90% 15 years ago to 46% now and the coconut cultivated area has been continuously shrinking since 2000.

Of the many pests and diseases affecting coconuts, some reduce production while others are downright lethal to the palms. The most prevalent is the root wilt disease, which has impacted coconut production in Kerala and has also spread to neighbouring states including Tamil Nadu and Karnataka. Additionally, the bud rot disease, eriophyid mites, red palm weevils, rhinoceros beetles and white flies are impacting production.

22 OFI – JANUARY 2019

India coconut NEW.indd 4

Month

Coconut oil % change price to previous (Rs/quintal) month

Jan 17

12,440

–

Feb 17

13,892

+11.67

Mar 17

13,415

-3.43

Apr 17

14,326

+6.79

May 17

14,312

-0.10

Jun 17

14,444

+0.92

Jul 17

14,881

+3.03

Aug 17

16,258

+9.25

Sep 17

18,091

+11.27

Oct 17

18,544

+2.50

Nov 17

20,179

+8.82

Dec 17

21,710

+7.59

Jan 18

22,092

+1.76

Source: Coconut Development Board

u kg (US$3.18/kg). Statista data confirms

Table 2: Price trend in coconut oil

What makes controlling these pests difficult is the smallholder-dominated profile of the industry. Small and marginal farms lack the resources to replant their trees. Old palms are more susceptible to disease and Murthy estimates that roughly 20% of India’s palm population is senile and unproductive. Conversely, 10% of trees are estimated to be in the juvenile phase, not having reached full production.

Smallholder farms are also often fragmented, which makes it difficult to implement modern farming technologies and mechanisation. India suffers from a lack of skilled labour for farm operations and mechanisation at farms could help with the issue. In addition to modernising farming, the small farms cannot afford high-quality planting materials – if they are available in the first place.

Finally, changes in climate patterns are having a negative effect on coconut production. Extreme weather events – such as droughts resulting from monsoons that never arrive and cyclones battering coastal areas – are becoming more common, says Jnanadevan.

Development programmes

The CDB is the government agency tasked with tackling these issues. It is tasked with are producing and distributing planting materials, expanding planted area, developing pest management and farming practices and replanting and rejuvenation.

The CDB also supports the formation of farmers’ collectives to encourage better processing and plant protection measures, and production of value-added products.

Murthy says the CDB has established a number of programmes to improve

coconut production in the country.

The first and the primary programme is the Replanting and Rejuvenation (R&R) scheme. It was introduced in Kerala in 2009 with the main goals of enhancing productivity by removing diseases and replacing aged and poorly producing palm with high-quality seedlings. The programme was extended to other states in 2016/17. So far, 3.5M palm trees have been removed and 350,000ha of farmland have been rejuvenated.

The CDB has also begun to establish Demonstration/Seed Production (DSP) farms to improve the production of planting materials and seedlings. To date, 10 SDP farms have been established and 720,000 seedlings produced.

The Technology Mission looks to develop better technologies to manage pests and diseases affecting coconut palms and improve product diversification.

It has so far established 479 coconut processing units with a processing capacity of 2.785bn coconuts/year.

The Coconut Palm Insurance Scheme was set up to provide coconut farmers with insurance coverage for their trees.

The Farmer Producer Organisation scheme encourages farmers to organise themselves into three tiers to improve production of value-added products. So far 9,582 coconut producers societies; 735 coconut producer federations (CPF) and 67 coconut producers companies (CPC) have been established.

Measures needed

All in all, the future holds large potential for the Indian coconut industry, with high demand providing opportunities for diversification into value-added products, such as VCO, in the Indian coconut sector.

Jnanadevan says that due to increasing VCO demand in both domestic and international markets, more emphasis should be given to increasing coconut oil production. Murthy agrees but says that unless the challenges facing the sector – such as the lack of quality planting materials and the large number of aged or diseased trees – are solved, India will be unable to meet the global demand.

Currently, the country has an annual requirement of 10M new seedlings, but only 3.5M are produced each year. As such, Murthy urges the industry to focus on hybrid and dwarf varieties of the coconut palm, to diversify production and to expand into both traditional and nontraditional coconut farming areas.

In a nutshell, India’s coconut sector has a potentially bright future but plenty of hard work will be needed to get there. ● Ile Kauppila is the former OFI assistant editor www.ofimagazine.com

17/12/2018 10:10

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OFI – JANUARY 2019

23

26/09/2018 12:19

ASIA

Update on Malaysia

Malaysian palm oil production for 2018 has been forecast to reach 19.9M tonnes, a slight 0.1% decline against the previous year, with weaker vegetable oil prices supporting exports

T

he Malaysian oil palm industry showed sterling performance in 2017. Crude palm oil (CPO) production and fresh fruit bunch (FFB) yield witnessed significant increases following recovery from the impact of the El Niño phenomenon a year earlier.

According to the Department of Statistics Malaysia, higher palm oil prices and improved export demand helped push export earnings to RM77.85bn (US$18.76bn), up from RM67.92bn (US$16.37bn) in 2016.

The first half of 2018, however, showed mixed performance. CPO production and export demand increased while imports were low compared to the corresponding period in 2017. High carry-over stocks, coupled with high production, also pushed palm oil stocks to above 2M tonnes in the first half of 2018.

Weaker vegetable oils prices took a toll on CPO prices, affecting export revenue.

CPO production

CPO production for the first half of 2018 amounted to 8.92M tonnes, up 2.3% or 0.2M tonnes against 8.72M tonnes in the same period in 2017. The increased production was mainly due to higher FFB processing rates from higher FFB yield.

CPO production in Peninsular Malaysia and Sabah recorded an increase of 4% and 24 OFI – JANUARY 2019

Malaysia NEW.indd 1

2.3% to 4.69M tonnes and 2.43M tonnes respectively. However, Sarawak recorded a decline of 1.6% to 1.8M tonnes.

Malaysia’s FFB yield performance in the first half of 2018 was 7.93 tonnes/ha, 1% higher compared with 7.85 tonnes/ha in the same period in 2017. The increase in FFB yield was partly attributed to improved weather conditions.

Peninsular Malaysia and Sabah recorded an increase of 4.1% and 2.1% in FFB yield to 8.15 tonnes/ha and 8.66 tonnes/ha, respectively.

Meanwhile, Sarawak registered a decline of 3.7% to 6.94 tonnes/ha. This could be associated with the increase in new matured area coming into production.

The average national oil extraction rate (OER) for the first half of 2018 was recorded at 19.85%, marginally higher than the 19.69% recorded in the corresponding period in 2017. This was mainly due to the higher quality of FFB processed by mills. On a regional basis, OER in Peninsular Malaysia and Sabah increased by 1.7% and 1.1% to 19.54% and 20.54%, respectively.

Sarawak, however, recorded a marginal decline in OER performance to register at 19.78%, down 1.7%.

Exports and imports

Total exports of oil palm products for the

first half of 2018 amounted to 12.27M tonnes, marking an 9.1% increase against 11.24M tonnes year-on-year (see Table 1, above). However, due to the lower export prices of oil palm products in the world market, the total export value declined by 9.4% to RM33.53bn (US$8.08bn), against RM37.00 billion (US$8.9bn) during the first half of 2017.

Meanwhile, exports of palm oil increased by 5.1% from 7.83M tonnes to 8.23M tonnes due to higher demand from major importing countries, such as China, the EU, India and Pakistan. The palm oil export value declined by 13.9% to RM21.49bn (US$5.17bn) in the first half of 2018 from RM24.95bn (US$6bn) in the same period in 2017.

The decline in export revenue was due to all oil palm products trading at lower prices compared with the same period of 2017. CPO traded 17.8% lower at RM2,420.5/tonne (US$583/ tonne) compared with RM2,944.50/tonne (US$709/tonne) in 2017.

The lower price for palm oil was partly due to increased Indian palm oil import duties and the weaker soyabean oil price on the world market. In addition, the stronger ringgit against the US dollar made palm oil comparatively more expensive.

For the first half of 2018, India maintained its position as the largest Malaysian palm oil export market with an intake of 1.39M tonnes or 16.9% of total palm oil exports. It was followed by the EU with 1.04M tonnes (12.6%), China with 0.87M tonnes (10.5%), Pakistan with u www.ofimagazine.com

19/12/2018 09:16:48

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OFI – JANUARY 2019

25

ASIA Volume (tonnes) Jan-Jun 18 CPO

Jan-Jun 17

1,930,243

Value (million ringgits) Diff. (%)

Jan-Jun 18

Jan-Jun 17

Diff. (%)

1,285,310

50.2

4.72

3.86

22.4

PPO

6,301,405

6,546,192

–3.7

16.76

21.09

–20.5

Palm oil

8,231,647

7,831,503

5.1

21.49

24.95

–13.9

Other oil palm products*

4,033,550

3,407,646

18.4

12.04

12.04

0.0

Total oil palm products

12,265,196

11,239,148

9.1

33.53

37.0

–9.4

Source: MPOB

Product

Indicator (M tonnes)

2H18

CPO production

11.0

Palm oil exports Palm oil closing stocks

2H17 11.2

Diff. (%)

2018

2017

–1.8

19.9

19.92

Diff. (%) –0.1

9.2

8.73

5.4

17.4

16.56

5.1

1.99

2.73

–27.1

1.99

2.73

–27.1

Source: MPOB

Table 1: Malaysian exports of palm oil and oil palm products, January-June 2017-2018 *PKO, PKC, oleochemicals, biodiesel, finished products and others

Table 2: Production, export and stock forecasts for second half of 2018 u 0.63M tonnes (7.6%), Turkey with 0.35M

tonnes (4.3%), the Philippines with 0.31M tonnes (3.8%) and the USA with 0.27M tonnes (3.3%).

These seven markets accounted for 4.85M tonnes or 58.9% of total Malaysian palm oil exports.

With respect to market destinations, palm oil export to India increased by 24.3% tonnes during the first half of 2018, partly due to the implementation of Malaysia’s CPO export duty suspension between 8 January and 30 April and India’s lower intake of soyabean oil from Argentina.

Exports to the EU increased by 11.7% due to the bloc’s lower intake of sunflower oil. Exports to China also witnessed a significant increase of 24.9% due to lower imports of soyabean from Argentina and Brazil. Exports to Pakistan rose by 43.3% as a result of lower imports of palm oil from Indonesia and a low intake of soyabean from Brazil for crushing. Palm oil intake by Turkey increased by 29.2%,

attributed to lower imports of sunflower oil in January-April, especially from Russia.

Imports

Imports of palm oil during the first half of 2018 stood at 0.3M tonnes, a decline of 18.3% from 0.36M tonnes year-onyear. This was mostly due to ample local supply of palm oil to cater to the lower demand from the local processing sector – particularly refineries – arising from lower export demand for processed palm oil.

The low export demand was partly attributable to the implementation of Malaysia’s CPO export duty suspension.

Indonesia remained the major source of palm oil imports, accounting for 94.9% or 0.28M tonnes.

Imports of palm kernel oil declined by 27.4% to 77,645 tonnes during the first half of 2018 due to lower demand from the local oleochemical sector.

This stemmed from low export demand for oleochemicals which was down by 0.8%. Imports of palm kernel, however,

improved 2.5-fold to 33,312 tonnes, attributable to higher demand from the palm kernel crushing industry arising from a 24.9% increase in export demand for palm kernel cake.

Palm oil stocks at the end of June 2018 increased by 43.4% to 2.19M tonnes, mainly due to opening stocks that were up by 63.9% or 1.07M tonnes, and higher production in Janauary-June 2018.

Outlook for second half of 2018

The upwards CPO production trend was expected to continue into the second half of 2018 due to forecast good weather.

CPO production in 2018 was expected to follow its normal upward trend from March, with peak production expected in September.

CPO production was anticipated to start to decline from October onwards until December, following the normal downward production trend. In the second half of 2018, CPO production was projected at 11M tonnes, a decline of 1.8% compared with the corresponding period in 2017 (see Table 2, above).

The lower production forecast was due to the expected lower FFB yield brought about by expected lack of rain.

Consequently, for the whole year of 2018, CPO production was forecast to reach 19.9M tonnes, a decline of 0.1%.

Palm oil export performance during the second half of 2018 was expected to show better growth than in the first, with total palm oil exports expected to increase by 5.1% to 17.4M tonnes.

The low palm oil prices were expected to continue to be a major factor in supporting the increase in PO exports in the second half of 2018. ● This article is based on the presentation, ‘Malaysia’s Palm Oil Supply and Demand Updates for 2018’ by A Kushairi and N Balu from the Malaysian Palm Oil Board, originally presented at the 2nd POINTERS Palm Oil Internet Seminar on 6-12 August 2018

www.sepiolsa.com Ph: +34 949 010 000 bleachingearth@sepiolsa.com

page horiz.indd 26 sepiolsa_quarter OFI – JANUARY 2019

Malaysia NEW.indd 3

1

10/12/2018 11:18 www.ofimagazine.com

19/12/2018 09:16:49

PALM OIL

High oleic palm oil has a lower saturate value than conventional palm oil

The high oleic option H

igh oleic palm oil (HOPO) is a non GMO hybrid, known as Oleifera X Guineensis (OXG). It was developed and introduced in Colombia, Ecuador and other countries in the 1990s as a result of a cross between the male Elaeis guineensis, (the conventional palm tree from the Gulf of Guinea in Africa) and the female Elaeis oleifera, originally from tropical South America, including the Amazon Basin of Brazil, Colombia and other countries in the region.

As the South American palm tree yields fruits with significantly higher oleic content and far higher levels of tocopherols, tocotrienols and beta carotene, this hybrid has a different fatty acid profile to the Elaeis guineensis fruit oil.

The Elaeis oleifera oil, also known as “Nolí” in Colombia and “Caiaué” in Brazil, contains around 65% oleic acid, 20% saturated fatty acids (SAFA) and only 15% polyunsaturated fatty acids (PUFA). As a result of hybridisation, the oil resulting www.ofimagazine.com

OFI Jan19 p27,28,29 NEW.indd 2

from the OXG hybrid contains more than 50% oleic acid, 33% SAFA and 12% PUFA, a very balanced fatty acid profile.

HOPO is chiefly grown in Colombia and Ecuador, where the planted area is projected to nearly triple from 55,033ha in 2013 to 153,400ha in 2020 (see Table 1, following page).

Production of the oil will grow even more, from 84,278 tonnes in 2013 to a forecast 428,501 tonnes in 2020.

HOPO has a higher production cost, due to the need for assisted pollination, but research is currently underway to address this. It also has a lower amount of kernel and therefore less palm kernel oil. But in areas where bud rot is endemic, growing HOPO is an alternative as it is tolerant to the disease.

Physically, HOPO is more liquid at room temperature than conventional palm oil as it has a different solid fat content u (SFC) curve derived from its different

Source: Lipidos Santiga

A hybrid form of palm oil grown in Colombia and Ecuador has a higher oleic content than conventional palm oil, offering applications in frying, baking and chocolate spreads Jose Angel Olivero

Figure 1: Fatty acid comparison of palm oil and fractions vs high oleic palm oil (%) OFI – JANUARY 2019

27

17/12/2018 11:50:37

PALM OIL Colombia & Ecuador

2013

2015

2020 (projected)*

Planted area (hectares)

55,033

76,700

153,400

Production of oil (metric tonnes)

84,278

177,219

428,501

Table 1: High oleic palm oil in Colombia and Ecuador Palm oil

Monofraction palm olein IV56

Source: Lipidos Santiga Double fraction palm olein IV56

High oleic palm oil (HOPO)

Saturated fatty acids (%)

46-55

42-48

37-42

27-37

Monounsaturated fatty acids (%)

36-44

41-45

43-50

49-57

9-13

10-14

10-17

9-14

Polyunsaturated fatty acids (%)

Table 2: Comparison of fatty acid profile

Melthing point (0C)

19

Source: Lipidos Santiga

Conventional palm oil

HOPO vs Olein 56 conventional palm oil

37

24

6

30.0

2.5

% SFC 100C

HOPO vs olein 56

Olein 56

% SFC 200C

3.5

24.2

8.0

0

% SFC 250C

2.0

15.0

3.5

0

% SFC 300C

0.5

9.5

1.0

% SFC 350C

5.5

% SFC 400C

2.5

Lauric (C12:0)

0.3

0.3

0.3

0.2

Myristic (C14:0)

0.5

0.9

0.9

0.9

Palmitic (C16:0)

29.0

43.0

39.5

34.0

Estearic (C18:0)

3.0

4.5

4.5

4.0

53.0

39.0

42.5

45.5

Linoleic (C18:2)

0.5

0.2

11.0

13.0

Linolenic (C18:3)

0.5

0.2

0.2

0.3

Oleic (C18:1)

% SAFA

33.0

49.0 Decrease of 32%

45.5 Decrease of 27%

39.5

% MUFA

53.0

39.5

42.5

46.0

% PUFA

12.5

10.5

Increase of 36% MUFA and 31% PUFA

Table 3: High oleic (HOPO) vs. conventional palm oil u triglyceride composition.

Figure 1 (previous page), compares the oleic and palmitic content of palm oil and its olein fractions to HOPO. The graph shows that HOPO has more than 50% 28 OFI – JANUARY 2019

OFI Jan19 p27,28,29 NEW.indd 3

12.0

Increase of 24% MUFA and 20% PUFA

14.0

Source: Lipidos Santiga

oleic acid and less than 30% palmitic acid (a third of total saturated fatty acids).

These properties give HOPO a place among oils rather than fats, but with the advantage of a dropping melting point of

22-26°C. A comparison of the fatty acid profiles between Elaeis guineensis (conventional palm oil), HOPO and the mono-fractionated palm olein IV56 and the double-fractionated palm olein IV shows that HOPO has less SAFAs, more MUFAs and a similar level of PUFAs than conventional palm oil (see Table 2, left).

Usage and applications

HOPO can be used in a variety of applications, replacing conventional Elais Guineensis palm oil, palm olein IV56 or double fractionated palm olein IV64, depending on the application desired. It is also the cheapest high oleic oil option on the market. If a high oleic acid profile is required, HOPO has an ideal balanced composition. When it is used to replace conventional palm oil or palm olein, the SAFA content is reduced and MUFA is increased, making it a good option for food manufacturers and consumers.

A common practice to improve the nutritional values in products such as biscuits or baked goods is to replace part of the solid fat with oils such as high oleic sunflower oil, conventional sunflower oil or rapeseed oils, in order to reduce the content of saturated fats.

This can also be achieved with blends of palm or coconut oil with seed oils and then carrying out an interesterification process (either chemical or enzymatic), to improve plasticity. However, this sometimes has a negative effect on the texture of the finished product.

Moreover, the interesterification process is expensive, capacity is limited and the enzymatic process requires large production batches.

In such cases, the use of HOPO is a good alternative. The product’s nutritional value can be improved without compromising on the texture. In addition, due to HOPO’s higher melting point than oils such as sunflower, soyabean or rapeseed, a larger amount of the solid fat can be replaced with HOPO in some applications without significantly lowering the melting point of the total fat used.

Just like palm oil, HOPO has good stability. With an iodine value of (Wijs) 65-69g I₂/100g fat – higher than double fractionated palm olein – it is a good choice for frying applications.

The usage of HOPO ensures more than 11 hours Rancimat at 120°C. Due to its www.ofimagazine.com

17/12/2018 11:50:37

PALM OIL high tocotrienol content, the stability is typically higher than that of conventional palm oil. The low solid fat content (SFC) of HOPO compared to conventional palm oil is another reason to use it in applications where a low solid content at lower temperatures is required.

For applications like chocolate cream, chocolate filling and ice-cream, it could be interesting to replace part of the fat with HOPO in order to increase the monounsaturated fatty acid content in the product, while maintaining the texture and consistency.

than other vegetable oils and conventional palm oil. The typical provitamin A and vitamin E content in HOPO is: Provitamin A (betacarotenes), 1100- 1600 ppm • a-carotene, 430-500 ppm • b-carotene, 780-900 ppm

Olein iodine value (IV) 71-75 • Cloud point, 1.0ºC-2.5ºC • Melting point (SMP), 6.0ºC-8.5ºC

Vitamin E (tocotrienols & tocopherols), 1250-1400 ppm • d-tocotrienol, 105-110 ppm • b & y-tocotrienol, 930-940 ppm • a-tocotrienol, 165-170 ppm • a-tocopherol, 50-70 ppm

Spanish oils and fats refiner Lipidos Santiga (LIPSA) has been processing HOPO since 2013 and is the only company to do so in Europe at its 600,000 tonnes/year refinery in Barcelona and 250,000 tonnes/year plant in Huelva.

Main markets

Processing

Advantages of HOPO

The main applications for HOPO are as a multi-purpose oil in hotels and restaurants, and in the snack industry and fast food chains for deep frying. Crude ‘virgin’ HOPO could sell in the nutritional/ health/ethical niche markets. In addition, the oil can be used in baking and pastries, to make biscuits and chocolate fillings and in vitamin A & E production.

Vitamin content

The vitamin content of HOPO is higher

The processing of HOPO is very similar to that of conventional palm oil, although it has advantages over conventional oil. The generation of the process contaminants, 3-monochloropropanediol (3-MCPD) and glycidol ester (GE), is much lower, due to the fact that the free fatty acids (FFA) of the crude oil is typically much lower.

HOPO can also be fractionated, resulting in an olein yield of more than 85% in the first fractionation. A typical outcome of the fractionation process is:

First fractionation stearin (IV) 54-57 • Melting point (SMP), 37ºC-40 ºC • Title, 43ºC

HOPO offers several advantages over conventional palm oil including a lower palmitic acid content and saturates, a high IV olein value, a higher oleic content, a healthier profile richer in provitamin A & E, lower 3-MCPD and GE content, no trans-fatty acids and no GMOs. It has high stability in all applications, as well as being higher yielding than conventional palm oil. ● Jose Angel Olivero is the sales director of Lipidos Santiga, Spain

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29

17/12/2018 11:50:38

PLANT & TECHNOLOGY

Plant and equipment round-up Researchers turn fatbergs into biogas

Photo: Arne Hendriks, Flickr

Oils & Fats International reports on some of the latest projects, technology and process news and developments around the world IN BRIEF INDIA: German engineering firm GEA has sold its first type BUE butter-making machine to Indian dairy producer Creamy Foods Ltd, making it the owner of the largest such machine in India.

The GEA BUE 6000 machine, with a production capacity of up to six tonnes/ hour, would be brought into operation in February 2019, GEA said. It allows for continuous production of butter from sweet or sour cream through the Fritz process.

With the new equipment, Creamy Foods – the largest global producer of ghee, India’s primary cooking fat – could process up to 190 tonnes/day of cream, turning it into 76 tonnes of ghee, GEA said.

A Canadian team of researchers from the University of British Columbia (UBC) has devised a new method that can turn the fatbergs plaguing the sewers of many major cities into renewable biogas fuel.

Fatbergs – such as the famous one extracted from London’s Whitechapel district in 2017 – are congealed masses of fats, oils and grease (FOG) flushed into sewers which harden over time into massive blobs of grease and solid waste which can clog sewer pipes and cause overflows, wrote the Smithsonian magazine on 20 August.

But the UBC had now developed a technique that, according to the research team, could turn fatbergs into biofuel more efficiently than current methods and work inside sewers, eliminating the laborious task of clearing them out of the pipes.

“This method would help to recover and reuse

waste cooking oil as a source of energy,” said Asha Srinivasan, an engineering researcher at the UBC who worked on the study.

In the new method, the FOG is heated to 90110°C, after which hydrogen peroxide is added to break down organic matter and release fatty acids, which are finally broken down into methane gas using bacteria.

“Finding the right combination of microwave temperature and hydrogen peroxide dosage is the key to the success of the process. Our process helps break down FOG, making it easy for the bacteria to digest and produce more methane,” explained Srinivasan.

The method could be used by municipal water treatment programmes to destroy fatbergs, but could also be of use to farmers who treated farm waste in biogas digester, turning manure and other biological waste into biomethane.

The UBC method would allow farmers to increase the current ratio of 30% FOG to 70% manure and other waste to include up to 70% FOG, meaning they could recycle more oil waste and produce more methane.

However, Chad Jafvert, a professor of civil engineering at Purdue University, said that although the technology was a “clever idea”, its cost could be a hindrance for wider use as heating the FOG required a source of energy.

The UBC team was now running pilot tests at municipal sewage treatment plants and dairy farms to identify the optimum ratio of FOG to sludge of farm manure.

The researchers expected to have a full-scale system in place within the next two years, after which the technology could be adopted by other sewage treatment systems, said Smithsonian.

New magnetic filter to separate ferrous contaminants from oils and fats

30 OFI – JANUARY 2019

PE Roundup.indd 2

The filter’s magnet could be operated magnetically without the need to open the filter housing for cleaning, making it suitable for clean-in-place (CIP) systems, according to Goudsmit.

When production came to a stop, the magnet could be blown out of the product flow so the flushing cycle could carry away the captured ferritic particles without the risk of them entering the product stream elsewhere in the process.

The hygienic magnet filter was available in five standard dimensions between 50mm and 125mm, had a standard pipe connection and was also available as a manually cleaned version, although this product was not EHEDG certified.

Photo: Goudsmit Mgnetics

Dutch engineering firm Goudsmit Magnetics has released a new magnetic filter (pictured) for cleaning sticky food products, such as oils and fats, from ferrous contaminants.

The new filter, manufactured from grade 316 stainless steel, was certified by the European Hygienic Engineering & Design Group (EHEDG), said Goudsmit in an August 2018 press release.

Constructed of neodymium magnets, the filter was designed for the food industry and could provide effective separation of very small ferrous particles down to 15μm in size, weakly magnetic particles and iron dust from oils and fats, coffee, cocoa, chocolate, pastes, powders and fruit juices.

www.ofimagazine.com

10/12/2018 13:01

u

PLANT & TECHNOLOGY

www.dsengineers.com

Crown breaks ground at new global headquarters

US oilseed processing equipment supplier Crown officially broke ground at its new US$12M global headquarters and innovation centre in Blaine, Minnesota on 31 October.

The 140-year-old company’s new 68,000 ft2 facility will accommodate a 37% increase in global headquarters staff and fuel technological advancements, as well as a 15,000ft2 pilot plant, triple the size of its current pilot plant.

“Our customers are world leaders in the oilseed processing industry and they are demanding innovative approaches to lower ownership and operational costs, while also improving efficiency,” said Crown general manager Bill Antilla.

“Our goal is to be the ‘first-call’ for customers looking for a technology partner to transform their manufacturing capabilities by reducing energy and water usage, improving yields and reducing capital and operating costs,” said Crown vice president of global engineering Mike Hoerle.

The innovation centre will include a pilot plant with preparation, extraction, protein concentrate and refining equipment connected to a control system, allowing customers to simulate plant-processing operations.

Crown is a division of CPM Holdings with additional offices in Argentina, Brazil, China, Germany, Honduras, Mexico, Russia, Ukraine and the UK.

Serving the Vegetable Oil Industry From Basic Engineering to Full Turnkey Project Single Point Responsibility through EPC or EPCM+® with guaranteed: ✔ Process Performances

Clariant starts building sunliquid cellulosic ethanol plant in Podari Swiss speciality chemicals firm Clariant has begun the construction of the first large-scale cellulosic ethanol plant using its sunliquid technology, which converts agricultural residues such as corn stover and wheat straw into renewable fuels.

Located in Podari, southwestern Romania, the plant would – upon completion – mark the first time Clariant’s sunliquid process was used on an industrial scale, the firm said in a 12 September statement.

“After more than a decade of research and development, Clariant is investing more than €100M (US$116.5M) in its first sunliquid plant. This technology is pioneering not only in Europe but globally,” said Clariant executive committee member Christian Kohlpaintner.

At full capacity, the plant would process roughly 250,000 tonnes/year of wheat and other cereal straw sourced from local farmers into 50,000 tonnes of cellulosic ethanol.

By-products from the process would be used for generating renewable energy with the aim of making the plant fossil fuel-free and thus qualifying the produced fuel as an advanced biofuel. www.ofimagazine.com

u PE Roundup.indd

3

OFI – JANUARY 2019 31

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RENDERING

The rendering process applies heat, extracts moisture and separates fat to turn the by-products of the meat industry into useful ingredients

Essential recycling The rendering industry performs an essential recycling service by taking animal by-products and turning them into ingredients for feed and other applications. OFI explains what is involved in the modern rendering process.

Serena Lim

A

round a third to half of each animal produced for meat, milk, eggs and fibre is not consumed by humans.

These raw materials are subjected to rendering processes resulting in many useful products.

Meat and bone meal, meat meal, poultry meal, hydrolysed feather meal, blood meal, fish meal and animal fats are the primary products resulting from the rendering process. The most important and valuable use for these animal by-products is as feed ingredients for livestock, poultry, aquaculture and companion animals.

Without the continuing efforts of the rendering industry, the accumulation of unprocessed animal by-products would impede the meat industries and pose a serious potential hazard to animal and human health.

The rendering process

Rendering is a process of both physical 32 OFI – JANUARY 2019

Rendering process.indd 2

and chemical transformation using a variety of equipment and processes. All of the rendering processes involve the application of heat, the extraction of moisture, and the separation of fat (see Figure 1, following page).

The temperature and length of the cooking process are critical and are the primary determinant of the quality of the finished product. The processes vary according to the raw material composition.

All rendering system technologies include the collection and sanitary transport of raw material to a facility where it is ground into a consistent particle size and conveyed to a cooking vessel, either continuous flow or batch configuration.

Cooking is generally accomplished with steam at temperatures of approximately 115ºC-145ºC for 40-90 minutes, depending on the type of system and materials.

Regardless of the type of cooking, the melted fat is separated from the protein and bone solids and a large portion of the moisture is removed. Most importantly, cooking inactivates bacteria, viruses, protozoa, and parasites. Alternative methods of raw material disposal such as burial, composting or landfill applications do not routinely inactivate microorganisms.

Fat is separated from the cooked material via a screw press within a closed vessel. Following the cooking and fat separation, the “cracklings” or “crax” – which includes protein, minerals and some residual fat – are further processed by additional moisture removal and grinding, then transferred for storage or shipment.

The protein is stored either in feed bin structures or enclosed buildings. The fat is stored and transported in tanks.

Production and technology

Rendering processes and technology have changed over the years and continue to improve. Modern rendering facilities are constructed to separate raw material handling from the processing and storage areas. Process control is performed and monitored via computer technology so that time/temperature u www.ofimagazine.com

12/12/2018 10:47:22

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Complete systems integration Every type of major rendering equipment, including new Dupps-Gratt decanters and centrifuges. © 2017 The Dupps Company

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OFI – JANUARY 2019 33

Raw materials u

Sizing

u

Heat processing (time x temperature) u

Press

u

Protein Grinding

u

u

Storage/Load out

Fat clean-up

Figure 1: Basic production process of rendering

Source: Meeker & Hamilton

u

u

RENDERING

u recordings for appropriate thermal kill values for specific micro-organisms are achieved. Temperatures far in excess of those needed to break cell walls and remove fat are avoided because they can lower nutritional values and digestibility.

The cooking times and temperatures in rendering are far above the thermal kill times required for food safety.

Wet rendering is a system that leaves a high amount of moisture in the product until, or if, it is dried. It is most commonly applied today in the rendering of edible fats and oils and in the production of items such as partially defatted chopped beef or condensed beef. The earliest wet rendering system was an open kettle fired with wood or coal. Fat rising to the top was skimmed off for use.

Dry rendering

Dry rendering is done with or without an initial pressurisation stage (sterilisation) and it is the most common system used today. In the mid-1900s, the dry rendering batch cooker came to near universal use.

Before adequate pre-breaking or precrushing came into use, large pieces of animals or offal could be pressurised in a batch cooker prior to drying. This had the same effect as a home pressure cooker and would cause the bones to become more brittle, softer and easier to handle.

Particle size reduction technology eliminated the need for the pressure step for size reduction. However, this step was re-deployed in Europe as an extra reduction factor in bovine spongiform encephalopathy (BSE) control programmes.

Pressure is regularly used for hair and 34 OFI – JANUARY 2019

Rendering process.indd 3

Source: Douglas Anderson

Wet rendering

Hammer mills are used to process raw material into a uniform size

feathers to achieve protein digestibility and can be in a batch or continuous process.

Edible rendering

Edible fats and oils are designated as high temperature or low temperature, as is the resulting tissue. Tissue with enough meat processed at low temperature is beef or pork with meat-like definitions. A high temperature product that is not to be designated as “cooked” or “ready to eat” will generally wind up as meat and bone meal through another rendering system, or possibly go to pet food.

Condensed beef is a newer term, and has certain production characteristics that are specialised.

Batch rendering

When a system is operating in a batch manner, it becomes a batch system.

Even a continuous cooker can be operated in a batch mode. A batch cooker is designed to be loaded, operated to the designated time and temperature under pressure, and then discharged for fat separation. It can function as a cooker, dryer, hydrolyser or processor, yet it is still the same piece of equipment.

With minor modifications, and with or without internal pressurisation, a batch cooker can be used for each purpose.

It can have a heated shaft as well as a shell, increasing the heating surface and efficiency of heat transfer. When used as a sterilisation step, the heated shaft can minimise the time required to attain temperature and pressure parameters.

Continuous rendering

Generally defined as continuous in-feed and continuous out-feed, there have been a number of continuous systems employed in the past. One of the first was the Anco Strata-Flow system. By connecting a series of modified batch cookers in a unique fashion, this became the first real continuous system.

Carver-Greenfield systems came on the scene at about the same time that Dupps, along with Keith Engineering, created the DUKE system. Today known as Equacookers, they are the most commonly employed units in North America. The ease of operation before sophisticated computer controls was a major factor in their success.

Companies such as Atlas and StordBartz brought their fish meal know-how to North America in the late 1970s, and became well-known in the 1980s. By using their unique disc dryer/cookers, waste heat evaporators, mechanical vapour recompression, and improving on the original Carver-Greenfield design, they developed a large market share in the poultry and red meat industries.

Consolidation has occurred in equipment supply as with the rendering industry as a whole. Dupps, and now Haarslev (consolidating Haarslev, Svaertek, Stord Bartz and Atlas-Stord), along with Anco-Eaglin (the modern ANCO), are the major providers of equipment to the North American market. Several other companies provide specialised equipment, rebuilding and repair services, centrifuges, and other options for the industry. With nearly round-the-clock operations, it is essential to have a plant and system that remains in an operating condition, with low downtime and energy efficiency.

Material to be rendered is received for temporary storage in raw material bins.

Raw material is conveyed from the bins by a raw material conveyor and discharged www.ofimagazine.com

12/12/2018 10:47:22

RENDERING RAW MATERIAL BINS

TO ODOR CONTROL SYSTEM

NON-CONDENSABLE FAN

3

1 RAW MATERIAL GRINDER

RAW MATERIAL CONVEYOR

4

2 AIR COOLED CONDENSER

5

13

METERING BIN

CONDENSATE TO WATER TREATMENT

CONTINUOUS COOKER

6

BOILER STEAM

275oF DISCHARGE CONVEYOR

8 DRAINER CONVEYOR SETTLING TANK

7

10 CENTRIFUGE

9

PRESS #1

RAW MATERIAL

11

CENTRIFUGE FEED PUMP

PRESS #2

FINISHED FAT TO STORAGE

PRESS FAT CONVEYOR

12 PRESS FAT PUMP

VAPOR or STEAM SOLIDS

PRESSED CAKE TO MEAL PROCESSING

PRESS CAKE CONVEYOR

LIQUID FAT

Figure 2: Continuous dry rendering process

CONTINUOUS SYSTEM

an odour control system for neutralisation of odorous components.

Waste heat evaporation

Employing an evaporator with a continuous cooker offers energy savings that will continue to be very important as the global energy balance continues to shift. Some waste heat systems installed in the early 1980s are still operating efficiently. Waste heat is very important for the meat processing industry to generate hot water – plants that do not employ waste heat to generate their hot water face rising energy costs.

Low temperature separation, originally used in fish meal production, allowed many of these waste heat systems to achieve very low energy consumption numbers, especially with materials with high water content. Finished product fat quality is also enhanced in any low temperature system. However, care must be taken to prevent rancidity in this fat.

Generally, heating the dry fat past 121ºC, once, will accomplish this. It also serves to dry the fat to a lower moisture level.

Waste heat recovery evaporators can be falling film, rising film, or forced flash designs. All have advantages and disadvantages, and selection for the characteristics of the liquid is critical.

Pre-heating the feed liquid may be required for coagulation of the soluble protein generated in the preheating process, and a glue breaking step may have to be added to allow the easy use of the concentrate in a dryer or cooker. Fish and porcine materials typically have more

www.ofimagazine.com

Rendering process.indd 4

MAGNET

Source: Dupps Company

across a magnet to remove ferrous metal contaminants. A raw material grinder then reduces the raw material to a uniform particle size for material handling and improved heat transfer in the cooking step. The ground raw material is fed at a controlled rate from a metering bin into a continuous cooker.

The continuous cooker is an agitated vessel generally heated by boiler steam. It brings the raw material to a temperature between approximately 115ºC-145ºC, evaporating moisture and freeing fat from protein and bone. A dehydrated slurry of fat and solids is discharged from the continuous cooker at a controlled rate.

The discharged slurry is transported to a drainer conveyor. The drainer conveyor separates liquid fat from the solids, which are then conveyed from the drainer conveyor by a discharge conveyor. In the discharge conveyor, solids from the drainer conveyor are combined with the solids discharge from the settling tank and from the decanter-type centrifuge. The solids from the discharge conveyor go to screw presses, which reduce the solids’ fat content to about 10-12%. Solids that bypass the screw presses are recycled back to the cooker. Solids discharged from the screw presses in the form of pressed cake go to the pressed cake conveyor for further processing into meal.

The fat removed in the screw presses goes to the press fat conveyor, which separates large particles from the liquid fat and returns them to the discharge conveyor. The fat from the press fat conveyor is pumped to the settling tank.

Fat discharged from the drainer conveyor goes into the settling tank.

In the settling tank, the heavier bone and protein particles settle to the bottom, where they are discharged by a screw conveyor into the discharge conveyor.

Liquid fat from the settling tank is pumped to the centrifuge, which removes residual solid impurities from the fat. The solids from the centrifuge go to the discharge conveyor. The clarified fat is transported for further processing or to storage as finished fat.

Water vapour exits the continuous cooker through a vapour duct system that generally includes an entrainment trap to separate and return entrained particles to the continuous cooker. The vapour duct system transports the vapour stream to a vapour condenser. Non-condensable gases are removed from the condenser by a non-condensable fan. Odorous gases generated at various points in the process are collected by a ductwork system and are transported along with the noncondensable gases from the condenser to

issues with glue due to the temperatures at which they are released from the material.

Continuous slurry systems

There have been various continuous slurry systems, such as Carver-Greenfield, with changes and improvements introduced by a number of manufacturers.

Designs by Dupps, Atlas-Stord and other firms created slurry evaporators that have been supplied successfully. These high capacity systems produce a meal with very good digestibility, as well as good fat quality. They are highly energy efficient.

Fish meal systems

Although not employed in a large number of plants, the predominantly mechanical fish meal system is extremely energy efficient and, without doubt, produces the highest quality fats and oils from any raw material that is possible to obtain.

Capable of large capacity throughput and energy efficiency, their use may increase in the North American market in the future.

Low temperature separation is utilised for high product quality in finished meals and fat. The meals are still subjected to a long drying process, but the low temperature enhances the quality of fats due to a lower thermal stress. ● This article is based on the papers, ‘Rendering Operations’, by Douglas Anderson of Smithfield Foods; and ‘An Overview of the Rendering Industry’, by David Meeker of the National Renderers Association, and C R Hamilton of Darling International OFI – JANUARY 2019

35

12/12/2018 10:47:23

STATISTICS STATISTICAL NEWS FROM MINTEC Palm oil Palm oil prices have risen in recent weeks, up 4%, however they remain down by 25% since the start of 2018. The end of November saw the lowest price in three years. Major producers and exporters – Indonesia and Malaysia – have seen a large increase in output following an expansion in their production area, which is forecast to increase again for 2018/19, up 3% y-o-y and 2% y-o-y respectively. This is 12% and 10% up on their five-year averages.

Consequently, this has led to a global supply surplus, seeing production up 4% y-o-y in 2018/19 and ending stocks continuing to rise, a 13% increase on the fiveyear average. As a result, the Indonesian government has removed levies on exports to make its crude palm oil more competitive in export markets. This tariff removal is temporary until palm recovers to a price level of US$500/tonne.

Crude palm oil prices, cif Rotterdam (US$/tonne)

Palm kernel oil Despite a slight recovery in recent weeks, palm kernel oil (PKO) prices have seen a significant price fall since the start of 2018, down 41%. PKO production is on the increase, rising in Indonesia (up 4% y-o-y), and Malaysia (up 2% y-o-y). Indonesia is looking at a 17% increase in its output compared to the five-year average. In contrast, demand has slowed, causing a build-up in stocks which are forecast to increase 3% y-o-y towards the end of 2018/19.

World palm oil, palm kernel oil, coconut oil production (tonne)

Coconut oil Coconut oil prices have also followed a downward trend in 2018, down 42% since the beginning of the year. For the Philippines, the largest global producer, the output for 2018/19 has been forecast up 4% y-o-y. In addition, global ending stocks are projected up 22% in 2018/19, further weighing down on prices.

Coconut oil vs palm kernel oil prices, cif Rotterdam (US$/tonne) Prices of selected oils (US$/tonne) 2017

July 18

Aug 18

Sept 18

Oct 18

Nov 18

Soyabean

829.0

771.9

755.4

744.4

746.7

722.1

Crude palm

690.0

604.2

586.7

570.3

582.2

522.8

Palm olein Coconut Rapeseed Sunflower

661.0

583.3

580.1

569.0

578.0

555.5

1,537.0

916.4

931.9

915.4

856.5

780.6

855.0

833.1

849.6

841.7

869.6

830.3

800.0

758.2

731.8

712.1

703.7

670.8

1,250.0

871.1

905.4

874.5

805.7

718.2

Average

946.0

763.0

763.0

747.0

735.0

686.0

Index

224.0

181.0

181.0

177.0

174.0

162.0

Palm kernel

36 OFI – JANUARY 2019

Stats.indd 1

Mintec works in partnership with sales, purchasing and supply chain professionals to deliver valuable insight into worldwide commodity and raw materials markets using innovative technology and a knowledgeable team of specialists. We provide independent insight and trusted data to help the world's most prestigious brands to make informed commercial decisions.

Tel: +44 (0)1628 851313 Email: sales@mintecglobal.com Web: www.mintecglobal.com

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12/12/2018 11:42

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