OFI April-September 2019 Feedstocks Online Edition by Quartz Business Media

OILS & FATS INTERNATIONAL ONLINE EDITION ▪ APRIL 2019 WWW.OFIMAGAZINE.COM

LAURIC OILS

India’s coconut potential

SUNFLOWER

Drivers for high oleics

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CONTENTS

FEEDSTOCKS ONLINE EDITION – APRIL 2019 OILS & FATS INTERNATIONAL

FEATURES

EDITORIAL:

Olive oil

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

Palm oil

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

Snapshot of Turkey As the world’s second largest producer of olive oil, Turkey has made impressive advances in cultivation and production

PRODUCTION: Production Editor: Carol Baird carolbaird@quartzltd.com

Canola

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

Update on Malaysia Malaysian palm oil production for 2018 was forecast to reach 19.9M tonnes, with weaker vegetable oil prices supporting exports

Lauric oils

16 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

@oilsandfatsint

Castor oil

India’s coconut potential India is the world’s largest coconut producer but must address several pressing issues to meet growing global demand

Sunﬂower oil

Printed by Pensord Press, Gwent, Wales

Oils & Fats International

Canada ﬁghting clubroot The clubroot diesease has spread throughout Canada and is the bane of canola and rapeseed producers all over the world

Drivers for high oleics High oleic oils – including sunﬂower – oﬀer nutritional and application advantages but factors such as segregation costs and volatile premiums limit their production

The story of the underdog China’s castor seed production has been on a downward trend but the country now plans to reverse the situation

DIARY & EVENTS Diary of Events

International events listing

Statistics

Statistical data from Mintec

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PALM OIL

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

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 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 u

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FEATURE PALM OIL 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

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) CPO production Palm oil exports Palm oil closing stocks

2H18

2H17

11.0

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 palm oil exports. It was followed by the

EU with 1.04M tonnes (12.6%), China with 0.87M tonnes (10.5%), Pakistan with 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.

OFI – MONTH 2018

Malaysia.indd 2

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

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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

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 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

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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 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.

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.

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

LAURIC OILS

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

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 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 milk powder see the highest demand in the Middle East and North America.

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 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 climbed 77.58% to Rs223/ kg (US$3.18/kg). Statista data confirms 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 u

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LAURIC OILS 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. 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

‘The Indian coconut industry has been unable to significantly increase its production’ 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 facing. The first one is surging demand

Table 2: Price trend in coconut oil

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

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SUNFLOWER OIL

Drivers for high oleics High oleic oils offer nutritional and application advantages including less saturated fatty acids, more monounsaturated acids, and a good shelf life. Yet factors such as segregation costs and volatile premiums for farmers limit their production Serena Lim

igh oleic oils are high in oleic (monounsaturated) acid, with consumer demand for better quality and healthier oils driving the market, along with regulations limiting trans fatty acids and saturated fat intake. HO oils have improved oxidative stability and also offer traceability – as the crop and oil must be segregated during harvest, storage, transport and crushing – as well as a non-GM alternative in the case of HO sunflower oil. Typically, high oleic (HO) oils have a fatty acid profile of more than 80% oleic acid in HO sunflower oil, more than 75% oleic acid in HO rapeseed/canola oil, around 70-75% oleic acid in HO soyabean oil and more than 55% oleic acid in HO palm oil, and (see Figure 3, opposite page). HO oils have been on the market for more than 10 years, responding to a growing demand from industry, according to Lionel Lordez of Monsanto, who was speaking at the April Trade Essentials Oils & Fats conference in the UK. “At the beginning, it was to replace hydrogenated oil, then came issues of health, sustainability, functionality and traceability.” Today, it is the search for technical and nutritional advantages, for a specific fatty acid profile, for locally-sourced oil, and cost and supply management factors

High oleic oils offer benefits such as a better nutritional profile and shelf life

which are driving the market, he says. Food accounts for more than 80% of global HO oil usage and Lordez believes the market will see organic growth of 1.2M tonnes by 2025, doubling the HO market in the EU from the 700,000 tonnes produced in 2015. Globally, production of HO oils stands at some 2M tonnes, with HO sunflower accounting for around two-thirds of the market, canola 30%, rapeseed 3%, soyabean 3% and safflower 1%, according to Lordez. Production of HO sunflower oil worldwide has ranged from 1.207M tonnes in 2011/12, to a high of 1.560M tonnes in 2015/16 to 1.183M tonnes in 2017/18 (see Figure 1, opposite page), Jose Angel Olivero, sales director of Spanish edible and speciality oil refiner Lipidos Santiaga, told the conference. Europe, Argentina and the Ukraine are the main producers of HO sunflower. Ukraine, for example, produced 232,000 tonnes and exported 224,000 tonnes of HO sunflower oil in 2016/17, according to APK Inform. However, for 2017/18, exports are forecast to fall to 180,000 tonnes, due to a fall in planted area. HO rapeseed/canola is grown in the EU, Canada and Australia, Olivero said. Canada was the leading producer, with a HO canola output of 1.89M tonnes in 2018. World production of HO canola ranged from 847,000 tonnes in 2014, to a high of 1.075M tonnes in 2016 to 869,000 tonnes last year (see Figure 2, opposite page). World HO soyabean area is around 250,000ha, yielding some 150,000 tonnes

Photo: United Soybean Board

of oil, all from GM seeds, said Olivero. “There is a big question mark over HO soya oil with production perhaps only in USA because of the GM issue.” According to the United Soybean Board, HO soyabeans are currently grown in 12 US states throughout the soyabean belt and Dr Stéphanie Marty-Terrade, senior lipid scientist at Nestlé Product Technology Centre, told the Gatwick conference that HO oils accounted for less than 1% of all US soyabean oil production. Production of HO palm oil, which has a fatty acid profile of 55% oleic acid, 30% palmitic acid and 33% saturated fats, totals around 150,000 tonnes/ year but is growing at an annual rate of 15-20%, Olivero said. HO palm oil is produced in Colombia and Ecuador and often has a lower free fatty acid (FFA) content than conventional palm oil, which can help reduce the formation of 3-monochloropropane-diol (3-MCPD) esters and glycidyl esters (GE) during oil processing, he added.

Limiting factors

Despite the benefits, production of HO oil has stagnated due to several factors. Olivero said conventional oilseed and oil had more buyers than the HO alternative and there was a yield loss when switching from the conventional to the HO variety. “Segregation also has a cost, which is not understood by buyers.” Farmers would like a premium for planting HO seeds but the high volatility in premiums was discouraging.

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HIGH OLEIC SUNFLOWER OIL. WORLD PRODUCTION

SUNFLOWER OIL

High Oleic Sunflower Oil

Benefits and applications

ERS FOR

OP L

less

summer

U palm

Speaking at the conference, Dr MartyTerrade of Nestlé said there was now a broad range of commercially available HO MAIN FOR oils. While most HO oilsDRIVERS targeted industrial frying, they had wider applications. “HO oils have clear technological SUNFLOWER advantages over their commodity counterparts and bring a unique combination of technological advantages.” They had a favourable nutritional profile with a lower level of saturated fatty acids, a higher level of monounsaturated acids, THE CROP and the presence of oil-soluble vitamins AND OIL E and K. IMAGE They were valuable oils to reduce SFAs and replace partially hydrogented oils (PHOs), the primary dietary source of artificial trans fat in processed foods. “They have good shelf life and are liquid and therefore easier to handle and transport. They also work as a heat • Healthy oil : less transfer medium.” Dr Marty-Terrade said key parameters saturated acid guiding food development included sensory factors,• shelf processing Nicelife, field in summer and technical constraints related to • Answer toregulatory EU palm the product, nutritional and requirements andoil a company’s bashing internal quality policies. “The consumer is in the middle of this as the product needs to taste good.”10 Nestlé operated to both internal and external time lines. For example, the US Food and Drug Administration’s final determination that PHOs are not Generally Recognized as Safe (GRAS) came into force on June 2018. Parallel to this, Nestlé’s policy was to completely

1.475

1.500 1.400

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1.332

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1.207

1.183

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11/12 12/13 13/14 14/15 15/16 HIGH OLEIC CANOLA. WORLD PRODUCTION

16/17

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Figure 1: World production of high oleic sunflower oil

18/19

Source: Lipidos Santiaga

1.100

PRESENTACIÓN LÍPIDOS SANTIGA. VERSIÓN 05/2017

High oleic canola

1.200

1.075 1.000

847

869

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800

822

600

400 200 SUNFLOWER

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Figure 2: World production of high oleic canola

Figure 3: Fatty acid profiles of high oleic and conventional vegetable oils

eliminate PHO from all its foods and beverages by the end of 2016. The company’s policy on saturated fat was to further reduce saturated fat by 10% in produts that did not meet the criteria set for different food items in Nestlé’s nutritional profiling system. “This policy is ongoing and highly challenging.”

2018

Source: Lipidos Santiaga

Board

1.560

1.600

Source: Cedric Delavent, Euralis

Cold winters in Russia and Ukraine meant crushing could not take place in winter as oil was frozen in tanks, giving producers less selling options as they could not export between December and March/April. Access to HO seeds could also be an issue as breeders disliked holding a surplus of seeds, he added. According to a market report by France’s FAT & Associés, large fluctuations in commodity prices and the fact that HO varieities are almost exclusively grown on contract also mean that supply of HO oils is unpredictable and supply/demand is frequently unbalanced. “This poses critical dilemnas for countries which consume much more than they produce. For example, Europe and North America are top consumers and also the main HO oil producers but domestic production cannot meet local demand and some imports are still needed to plug the gap,” the report said.

PRESENTACIÓN LÍPIDOS SANTIGA. VERSIÓN 05/2017

Nestlé had used HO soyabean oil to reformulate its liquid coffee creamers and, by the end of 2015, it had achieved a 45% reduction in the product’s SFA content and replaced PHO, leading to the removal of trans fatty acids, without compromising the taste. Dr Marty-Terrade said Nestlé had also used HO sunflower oil to reformulate its instant soup recipe. “HO sunflower oil is often used in nutritional applications because its fatty acid profile is neutral. There is a minor impact on linoleic content and no impact on alpha-linolenic acid content. “It does not compromise the oxidative stability of products and it maintains the non-GMO status of products.” In the case of instant soup, Dr MartyTerrade said the company had reduced the SFA content from 1.7g/250ml to 0.8g/250ml. The goal was to maintain oxidative stability in the fat phase, provide creaminess and maintain compatibility with current manufacturing processes. The solution was a HO sunflower oil encapsulated into a carbyohydrate/milk protein matrix. ●

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01/04/2019 09:25:36

OLIVE OIL

Snapshot of Turkey As the world’s second largest producer of olive oil, Turkey has made impressive advances in cultivation and production, according to the International Olive Council

he olive has been a symbol of Mediterranean civilisation throughout history and has long been established in Turkey. Southeast Anatolia is thought to be the cradle and gene centre of the olive, a claim corroborated by sub-species of olive, found in a line stretching from Hatay to Kahramanmaraş and Mardin. From southeast Anatolia, the olive tree spread to west Anatolia, subsequently fanning out to Greece, Italy, and Spain via the Aegean Islands. Anatolia has been home to the olive tree for 6,000 years. Archaeological remains discovered at Urla, the site of the ancient city of Klazomenai in the Aegean region, testify to olive oil extraction as far back as the 6th century BC and recent discoveries have provided more evidence of early olive trading and exports in the city. Further proof of the olive’s long history in Turkey is the 1,300-year-old tree growing in Mut or the olive oil stores found in Izmir. Year

Globally, olive cultivation can be found primarily in the countries bordering the shores of the Mediterranean. Turkey is among these countries and is ranked as the world’s second largest producer, after the EU. Olives and olive oil are very important agricultural products for Turkey’s economy, with a high export potential. Every year, Turkey exports around 60,000 tonnes of olive oil and 70,000 tonnes of table olives. The export volume varies, depending on the olive harvest and the level of production in other producer countries. Olives are grown in five regions in Turkey – the Aegean, Marmara, Mediterranean, southeastern Anatolia and the Black Sea, each with its own distinctive characteristics. In the Aegean region, 80% of the olives produced are processed into olive oil and 20% are reserved for table olive production. In the Marmara region, wedged in between the Mediterranean and the Black

Production

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2015/16 final balance

150,000

116,000

15,000

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155,000

45,000

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170,000

90,000

Figure 1: Turkey: Olive oil balances, 1 October-30 September (tonnes) International Olive Council

Sea, the shares are the other way around: 90% of production goes into table olives and 10% into oil. Olive cultivation in the Mediterranean region is located between the coast and the Taurus Mountains up to an altitude of 850m. Some 68% of the olives grown in this region are channelled into oil extraction and 32% into table olive processing. Hatay (Antakya), İçel, Adana and Antalya are the top producing areas in this region. Orchards planted with the Ayvalık variety (a cold-resistant cultivar with high chilling requirements) are spreading to villages at higher altitudes as an attractive source of extra income. In southeastern Anatolia, where 86% of olive production goes into oil and 14% into table olives, olive growing is concentrated in Gaziantep, Kilis, Şanlıurfa, Kahramanmaraş and Mardin where the climate is Mediterranean. Recent improvement measures include the distribution to growers of Ayvalık and Gemlik varieties from regional nurseries. Lastly, in the Black Sea region, table olives are usually grown for selfconsumption along a small coastal strip and in secluded river valleys (Artvin) where there is a Mediterranean microclimate and the areas are protected from the northerly winds. All in all, 84 olive varieties are produced in Turkey. Generally speaking, Edremit

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OLIVE OIL (Ayvalık) is the predominant variety in the north of Turkey’s olive growing area and Memecik in the south. The Ayvalik cultivar is hardy and adapted to relatively arid areas. The second most important variety in Turkey, it is found along the entire Aegean coast where it accounts for about 25% of olive acreage. Its productivity is high and the fruit has a high oil content (24%). Owing to the quality of the oil, which is aromatic and has distinctive chemical characteristics, it is considered to be the most promising of Turkey’s oil cultivars. Its erect growth habit makes it particularly suited for mechanical harvesting. It is also used for producing split green olives and black olives. It has a flesh to stone ratio of 5.6 and is tolerant of olive fly. The Gemlik variety is largely produced and consumed as black table olives. Other Turkish varieties include Büyük Topak, Ulak, Çakır, Çekişte, Çelebi, Çilli, Domat, Edincik Su, Eğriburun, Erkence, Halhalı, İzmir Sofralık, Kalembezi, Kan Çelebi, Karamürsel Su, Kilis Yağlık, Kiraz, Manzanilla, Memeli, Nizip Yağlık, Samanlı, Sarı Haşebi, Sarı Ulak, Saurani, Taşan Yüreği, Uslu and Yağ Celebi.

Growing and harvesting

There are some 180M olive trees in Turkey, found on 700,000ha of olive orchards. The olive is a long-lived evergreen tree that is densely branched and has a broad canopy that can grow up to 10m high. With age, its smooth grey trunk gradually starts to crack and become gnarled, and the canopy increases in width as the tree increases in height. It is a perennial tree and can live for approximately 2,000 years. The canopy is open and symmetrical when grown on fertile land, but denser and rounded when cultivated on infertile land. Its shoots are grey and almost triangular in shape. The olive tree blossoms in the spring. Stone hardening and fruit ripening begin in the summer months. The fruits start to change colour in November, first turning from green to violet and then to black as they ripen. This stage is known as véraison. The ripe olives are harvested from November to March. Olive harvesting methods have barely changed for thousands of years and hand picking or beating with poles continue to be used. Another method is to collect the olive fruits that drop from the trees onto the ground. The quality of the olive oil produced is heavily dependent on how the olives are picked. The best olive oil is obtained when

Turkey: Facts & figures 180M olive trees 700,000ha olive orchards 500,000 tonnes table olives/year 300,000 tonnes olive oil/year 500,000 households employed in olive and olive oil production ▪ > 500 continuous-process olive oil mills ▪ 70,000 tonnes table olives exports/year ▪ 60,000 tonnes olive oil exports/ year ▪ ▪ ▪ ▪ ▪

the olives are picked from the branches one by one. Other methods are to leave the olives to drop to the ground and then pick them there or to use suction machines. Olives should be processed as soon as possible after harvesting as quality deteriorates if the fruit is left to lie. If they are for olive oil extraction, any leaves are first removed and the fruit is washed in automated machines. The olives are then crushed in presses to extract the oil from the plant tissues. It takes approximately 10kg of olives to extract 1kg of earlyharvest olive oil. With other methods, between 3-8 kg of olives are sufficient to extract 1kg of oil. Unlike other fruits, olives cannot be eaten straight from the tree. Various processes have evolved over time to remove their sharp bitter taste. At first, the olives were placed in water. Later, they were sweetened by dipping them in ash, vinegar or limewater. To preserve them, they were pickled in brine flavoured with lemon, fennel, mastic, thyme, peppermint and other herbs to make them taste more pleasant. Alternatives to brining were storing the olives in wine or even honeyed water.

Extraction method

There are estimated to be between 1,000 and 1,100 processing facilities in rural areas in Turkey, where some one million tonnes of olives are processed every season. The oil extraction method is another tradition that has not changed in millennia. The original method was to crush the olives underfoot and then extract the oil from the mash with hot water. Nowadays, olives are crushed into a mash to which pressure is applied to extract the oil without any chemical processes.

The oil is then separated from the fruit vegetable water. Technological developments in the early 19th century saw the advent of hydraulic presses, which are used nowadays alongside centrifugal systems, the most widespread of which is known as the continuous system. In the continuous or fully automated system, the olives are first sorted by variety, stripped of any leaves and crushed in a machine that finely grinds the olive stones at 3000 rpm. Water is added to the crushed olive pulp and the resultant mash is beaten. Next, the olive pomace is separated from the oily juice. The olive oil is then separated from the vegetable water and transferred to a filter tank. These kinds of olive oils are virgin or extra virgin grade, depending on their acidity, and can be consumed straight away as if they were a fruit juice. The last sediment is removed and the olive oil is left in the settling tank. Virgin and extra virgin olive oil is then packed in drums, cans or bottles. The olive pomace left over from the extraction process is recrushed and used to make soap, while the spent pomace is used to make fuel pellets.

An international player

Over the past 10 years, Turkey has made major progress in olive cultivation. It has established processing plants with the technology and capacity to produce large volumes of top quality table olives for the world market. It has also made impressive advances in olive oil production. A number of firms active in the extraction, refining and packaging of olive oil to world standards have taken up their rightful place in the industry and continue to pursue success. In the years ahead, Turkey intends to push forward with development and increase its share of global trade. Turkey’s Ministry of Food, Agriculture and Livestock has fixed a target of 450,000 tonnes for olive oil production. The increase in olive planting and the growing interest in olive cultivation, coupled with investment in modern orchard, production and storage facilities, all show that the sector believes this target can be achieved. If it does so in the short term, olive oil will gain in prominence at the domestic level and Turkey will consolidate its position as an international player in the olive world. l This feature is based on the article, ‘A snapshot of the Turkish olive oil sector’, in Issue 123 of Olivae, the official journal of the International Olive Council

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01/04/2019 09:26:11

CANOLA The clubroot disease was found in Canadian canola crops only 15 years ago but since then, it has spread throughout the country and left farmers scrambling for a cure. They are not alone, however, as clubroot is the bane of canola and rapeseed producers all over the world Ile Kauppila

anada’s US$21bn canola industry awoke to an unpleasant reality in 2003. Clubroot, a problematic plant disease that can threaten entire canola crops, was discovered in the province of Alberta’s farming regions. Until then, clubroot had been a serious problem in European rapeseed fields, but had also been found all over the world, from Australia to China and the USA. Canadian farmers had been able to take it easy when it came to this particular disease. The Canola Council of Canada (CCC) tells Oils and Fats International that they, in fact, had no reason to believe clubroot was even present in the country or would ever affect their crops. After 2003, this was no longer the situation. Now, 15 years later, thousands of fields have been infected and clubroot has spread from Alberta to Atlantic Canada and virtually every province in between. Farmers and seed producers are fighting against the scourge, but it seems that no matter what they do, clubroot is constantly one step ahead.

What is clubroot?

Clubroot is a virulent soil-borne disease that affects plants in the Cruciferae – or cabbage – family. In addition to rapeseed and canola, this diverse plant group also includes common vegetables and weeds like cabbage, broccoli, Brussels sprouts, cauliflower, turnip, stinkweed and wild mustard. All of them are related and, as such, vulnerable to clubroot. The disease is caused by a pathogen in soil called Plasmodiophora brassicae. This pathogen is classified as a protist – a kind of microscopic organism that is not an animal, plant or fungus but exhibits characteristics of all of them. As an ‘obligate parasite’, P. brassicae cannot grow or multiply without a living

Canada fighting cl host, says the Canola Council of Canada (CCC). The parasite spends the winter buried in the soil as incredibly hardy resting spores that can remain viable for up to 20 years. In spring, secretions from various plant roots cause germination in the spores, which transform into short-lived zoospores that begin to swim around in water or water-film in the soil, looking for root hairs to infect. This mobility allows the zoospores to actively search for host plants. Once it finds and infects a suitable host, the zoospore transforms into an amoeba-like cell that multiplies and joins up with other cells formed by its zoospore brethren, ultimately forming what is called a plasmodium. The plasmodium then releases secondary zoospores that reinfect other roots of the same plant. The second generation infection is able to invade the interior – or the cortex – of the canola root. Once they reach the cortex, the amoeba cells form second generation plasmodia, which begin to alter plant hormones. The hormonal imbalance causes the infected

interior root cells to swell up. Clusters of these enlarged cells ultimately result in the signature club-like root galls, which give the clubroot disease its name. Come autumn, as these galls decay, they release millions upon millions of resting spores back into the ground, ready to start the infection cycle again the following spring.

Symptoms and identification

In rapeseed and canola, the most distinctive symptom of clubroot is the formation of the galls or swellings in the roots of the plant. According to the CCC, the root galls not only tie up nutrients that the crop could have used, they also hinder the transport of adequate water and nutrients up to the aboveground plant tissues. While the root galls are a telltale sign of the disease, without specific inspection they will be hidden underground. The visible symptoms of the disease could mislead farmers and cause them to misdiagnose their ailing crops. Depending on local conditions and

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01/04/2019 09:28:04

CANOLA

Photo: The Canadian Canola Council

A telltale sign of clubroot infection in canola are root galls that hinder the plant’s nutrient and water intake

g clubroot the life phase when the canola becomes infected, the aboveground symptoms could be confused with a number of other diseases – such as sclerotinia, blackleg or fusarium wilt – or with simple water or nutrient stress, notes the CCC. If canola becomes infected at the seedling stage, clubroot infection can result in wilting, stunted growth of yellowing symptoms in the rosette or early podding states, says Alberta provincial government’s “Alberta Clubroot Management Plan”. In later life stages, canola that was infected early can experience premature ripening or even total plant death. Canola infected in later growth stages may not display wilting, stunting or yellowing, but can still ripen prematurely and reduce yield by 50% or more due to shrivelled seeds with low oil content. “Since aboveground symptoms of clubroot may be incorrectly attributed to moisture stress or diseases, proper diagnosis of clubroot should always include digging up plants to check for gall formation on roots,” the CCC instructs in

its clubroot identification guide. The galls can get surprisingly large before aboveground symptoms become noticeable, so in clubroot hotspots – such as field entrances – it is a good idea to check the roots occasionally even before any problems are detected. However, even this may not be a foolproof method. Canola roots can exhibit swellings of unknown origin called hybridisation nodules, which can be mistaken for young clubroot galls. A touch test, however, often reveals that the hybridisation nodules are firmer and more spherical than clubroot galls. Additionally, the nodules do not decay in the same way as clubroot galls, which turn both themselves and the root into a brown, peaty mass as they mature. Some phenoxy herbicides could also result in swelling on lower stems and roots in canola, but these growths are generally much smaller and do not have the lobed appearance of clubroot galls, says the Alberta government. However, the differences between the various possible root growths can be negligible even to a trained eye, so the CCC recommends sending any noduleridden roots for testing. Apart from uprooting, another identification option is to identify patches of concern during swathing and collect samples afterwards, notes the CCC. “Since the entire field is traversed during swathing, this will give the most detailed indication of the incidence in the field. If suspicious plants are not sampled until several weeks after swathing, the root galls may have decayed already and typical whitish galls will no longer be present,” the organisation says.

Spread and prevention

The introduction of P. brassicae resting spores to a field is nearly uniformly the cause behind a clubroot infection. The most common method of spread

is the introduction of soil infested with resting spores into a field, having been carried over from an area where an infection has already taken place. The soil is usually carried from field to field by farm machinery or tools such as spades and shovels. However, wind and water erosion can also move infested soil around. Another way for the infection to spread is for the resting spores to attach to seeds and tubers or crops such as hay and straw, through dust or earth tag. The Alberta government suspects that this is how the disease originally arrived in Canada, and it is not unlikely that this method has also spread clubroot around the world, having travelled on infected vegetables. Due to the extreme hardiness of the resting spores, the CCC lists practising good sanitation as the most important tool in clubroot prevention. All farm equipment – including vehicles, tools and clothing – should be thoroughly cleaned to restrict the movement of possibly contaminated materials. The cleaning procedure should be proportional to the perceived risk of infection. Equipment moving from infested to non-infested fields should undergo the most rigorous sanitisation. It may also be necessary to restrict access to infested fields. The CCC also recommends avoiding common untreated seeds and tubers as earth tag from infested fields could result in a clubroot infestation. Similarly, farmers should avoid straw bales or manure from infested or suspicious areas, as the resting spores can survive the digestive tract of livestock. Direct seeding and other soil conservation methods can reduce erosion, which will result in less soil movement and lower the risk of possibly infested soil ending up in canola fields. Crop rotation, while unable to prevent u

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01/04/2019 09:28:06

CANOLA u clubroot introduction or its spread

Photo: The Canadian Canola Council

between fields, can be a good tool for preventing the buildup of clubroot resting spores in the field soil, says the CCC. Farmers in clubroot infested areas should have a rotation period of at least two years between canola crops in order to prevent spore numbers from increasing in the soil. The break may also have to be longer if spore levels have become too high or if new clubroot pathotypes have showed up. Clubroot thrives in acidic soil with a pH lower than 7.0. As such, liming fields until they have a soil pH of more than 7.2 has been effective in hindering the movement and survival of clubroot zoospores. Unfortunately for canola farmers, liming is often too expensive to perform at the scale required for large-scale canola fields. Nonetheless, the CCC notes that finding clubroot early will allow growers to manage and lime smaller patches effectively.

Resistant varieties

One more weapon in the fight against clubroot is planting canola varieties that are resistant to the disease. The CCC says that using canola varieties with no history of the disease can greatly reduce the disease’s development and establishment, compared with using susceptible varieties. However, various strains of clubroot exist and genetic clubroot resistance can decrease over time. The introduction of canola varieties resistant to a certain pathotype might cause selection pressure and boost the presence of less common pathotypes when exposed to soils with high spore levels. To combat this issue, work is ongoing to discover and develop canola strains that exhibit stronger and more widely applicable clubroot resistance. Major biotech companies, including big names such as DowDuPont and Bayer/ Monsanto, are engaged in efforts to rid canola farmers of the scourge of clubroot. Through the use of traditional breeding and genetic engineering, they are working to introduce newer and better varieties to the market. DowDuPont’s subsidiary, DuPont Pioneer Canada, is launching a new clubroot-resistant canola seed in 2018, having already introduced it on a smaller scale in the previous year. Bayer/ Monsanto is also hoping to introduce a new variety in two-four years by crossbreeding canola with related plants, such as rutabaga, according to Reuters reports. But it’s not just large private

Above-ground symptoms of clubroot, such as yellowing and wilting leaves, can be mistaken for water stress

companies that are engaged in the fight against clubroot. Scientists at Canada’s Agriculture and Agri-food Ministry are using Canadian Light Source (CLS) – a large-scale synchrotron or a machine that uses a brilliant light to enable scientists to gather data about structural and chemical properties at molecular level – to examine why some canola varieties are more resistant to clubroot and how their cell walls change in response to infection. “The goal is to be able to use the resistant genes judiciously either by rotating them in a variety or by stacking or pyramiding them in the same variety to carry multi-resistant genes,” Gary Peng, a scientist at Agriculture and AgriFood Canada’s Saskatoon Research and Development Centre, tells Canadian Global News. Yet clubroot is giving both companies and governments a run for their money. Marcus Weidler, vice president of seeds operations at Bayer Crop Sciences, says that P. brassicae adapts very quickly to changes and that there are still unidentified pathotypes lurking out there. “Sooner or later, the pathogen will find a

way around [genetic resistance],” Weidler says. As an example, Monsanto’s first clubroot-resistant canola seed was introduced in 2009. But in 2011 – only three years later – clubroot infections were discovered in fields planted with the resistant variety. Agriculture and Agri-Food Canada’s Peng agrees with Weidler’s evaluation. “We need to find new resistant genes and use them efficiently. It is important to have resistance diversity in our arsenal because we know that a single gene will not be long lasting. We need to be more prepared in order to better manage the disease using the resistance strategy,” says Peng. Meanwhile, clubroot continues to be a serious headache for farmers. The best they can do at the moment is to use a multitude of different approaches and careful sanitation practices to limit the damage to their crops until science develops more long-term solutions. l Ile Kauppila is the former assistant editor of OFI

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01/04/2019 09:28:07

CASTOR OIL

The story of the underdog China’s castor seed production has been on a downward trend but the country now plans to reverse the situation Ile Kauppila

alled by some the most underappreciated member of the oilseeds and vegetable oils family, castor oil has a lot going for it. Despite the toxic dangers that lurk in castor seeds, the oil is used as a raw material for a whole slew of industrial products and in cosmetics and medicine. Perhaps one reason for the relative obscurity of castor oil is the fact that its production is extremely centralised. The global castor oil market is dominated by India, whose output is nearly unmatched. Yet, in the shadow of the giant others dwell, either producing castor oil themselves or processing it, as India exports most of its castor seed and oil. One country that does both production and processing is China, where the castor industry is showing signs of defiance to the Indian hegemony.

What is castor oil?

Castor oil is a natural plant oil, obtained from the seeds of the castor plant, known as Ricinus communis by its scientific name. The castor plant is native to the Ethiopian region near the horn of Africa but, by the 18th century, it had become naturalised in many parts of the world. Today, it is commonly found in tropical and warm temperate regions around the world, growing practically in any warm area with well-drained soil and sufficient nutrients and moisture. In southwest USA, the plant grows a bit too well and is considered an invasive weed.

The plant produces spiny green-to-red capsule-like fruits, which splits into three sections upon reaching maturity, forcibly ejecting the castor seeds from within. The seed is also called – slightly misleadingly – a castor bean, although it is not a true bean. Castor seeds are extremely toxic due to the presence of ricin, a deadly watersoluble protein. Castor is one of the most poisonous plants in the world, with 70g of ricin reportedly being enough to kill an adult weighing 80kg. This potency makes ricin 6,000 times deadlier than cyanide. The oil itself, however, is non-toxic as upon crushing, the ricin is left in the seedcake or meal. The oil is a pale yellow liquid, with a very distinct taste and odour. It is widely used in a great variety of industrial applications, ranging from the manufacture of nylon, soaps, lubricants, and hydraulic and brake fluids to paints, perfumes and pharmaceuticals.

Production picking up

China is the world’s second largest single producer of castor seed, responsible for 5% of global total production. In 2017, Oil World estimates that China’s output will equal roughly 40,000 tonnes. Although China might be the second best, the country cannot hold a candle to India, which alone produces a whopping 85% of global castor seed supply. While any castor producer has miles of catching up to do in the race for the industry throne, India’s position as the king is not unshakable in the long run. Nirmal Bang, an Indian online share trading and broking firm, says in its ‘Castor Seed Market Analysis and Outlook 2017’ that India is likely to witness a decline in its castor output. One of the reasons is farmers changing to other more lucrative crops, which saw the country’s total castor hectarage drop by 24% in 2016-17. Another reason possibly shaking India’s

position could be a rising China. Although China’s castor seed production has fallen by more than 84% from 2012 to 2016 – from 227,000 tonnes to 36,000 tonnes – the downward spiral may be reversing in the coming season (see Figure 1, p20). According to a presentation titled ‘Chinese castor industry’, presented on 18 February at the Global Castor Conference 2017 by Hengshui Jinghua Chemical Co, one of China’s largest industrial consumers of castor oil, 2017-18 production of castor seed in China could reach an estimated 100,000 tonnes, up nearly 178% from the 36,000 tonnes in 2016. Hectarage is also projected to increase to 39,000ha, which – while still significantly smaller than the 93,500ha in 2012 – is the highest since 2013. There are three primary reasons for the increased production. Hengshui says that the Chinese government has reduced financial subsidies given to food crops. The price of major food crops has also been declining globally since 2015, which caused a decrease in the crop size of several food crops, such as corn. Compared to corn’s profit yield of CNY9,900 (US$1505)/ha, castor is expected to yield CNY10,710 (US$1629)/ha, making farming the oilseed more profitable for Chinese growers, particularly in the main castor growing regions of the northeastern Xinjiag and Yunnan provinces. In addition, Hengshui states that the castor industry is receiving increased flows of capital, not only from the government, but also from large enterprises and wealthy traders. The increased amounts of capital will allow castor seed producers to develop both farming methods and seed varieties, in order to purchase more land. The third cause behind Hengshui’s projected increase in castor seed production is the mechanisation of planting and harvesting, which the company says is currently under field evaluation. u

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CASTOR OIL Crop size (KHA)

Seed produc<on (KT)

250 200 150 100 50 0

2012

2013

2014

2015

2016

2017*

Figure 1: Chinese castor seed crop size and production

Big plans for imports

Demand for castor oil in China is projected to remain high, driven mostly by industrial applications. According to Nirmal Bang, the generally growing Chinese economy will also fuel demand for castor. “Considering the fact that India’s production and export numbers remain unmatched, a stronger economy in China will bolster the demand for castor oil,” the firm says in its report, adding that fall in production in both India and Brazil have limited the availability of castor seed. Hengshui agrees with the projection, saying that the demand for castor oil in China is expected to grow 8% in 2017. To feed its ever-growing thirst for castor, China has traditionally imported most of its oil from India, which is to be expected, given that the country produces the vast majority of the global castor supply. Hengshui data shows that in 2016, China imported 41% of Indian production. In total, China imported 257,000 tonnes of castor oil in 2016, which both Hengshui and Nirmal Bang say represents a 12.9% increase from the 228,000 tonnes in 2015 (see Figure 2, p21). Hengshui attributes the increase in imports to China’s economy, which is growing at a rate of 7%/year. The economic growth translates into more industrial production and a growing demand for, and consumption of, castor oil. Additionally, the falling domestic production between 2012 and 2016 has forced the country to rely more on imports. Nirmal Bang projects that this trend will continue in 2017 and projects that Chinese castor imports from India will grow by another 8-10% during the year. Hengshui, however, sees the situation diﬀerently. While in the past years, 80% of China’s castor oil has come from India, from 2017 onwards China will be less

reliant on India, the firm argues. It projects that with the increased profit yields from castor, more and more farmers will begin to plant the oilseed, thus bringing about the forecast increase in domestic production, which translates into a diminished need for imports. China is also planning to increase its imports from other countries, particularly from Myanmar. The Southeast Asian country has a tropical monsoon climate well suited for the cultivation of castor and there is a history of castor planting in Myanmar. Hengshui, together with the Yunnan Castor Research Institute, set up a castor demonstration plantation in 2016 to “gradually recover the country’s castor industry”. Currently, the castor planted area in Myanmar is 6,670ha, according to Hengshui, which produces approximately 15,000 tonnes of seed. Production is projected to increase in the 2017 season. In addition to Myanmar, China also wants to increase castor planted area in Africa and establish the continent as one of its four main castor import regions, the other three being India, Malaysia and Myanmar. Pakistan and Cambodia are also on China’s import list and the country would like to see their production expanded as well.

Putting the oil to use

Consumption of castor oil China has been growing steadily over the past couple of years. From 2012 onwards, when annual Chinese castor oil consumption was 260,000 tonnes, use of castor oil declined somewhat, coming down to 208,000 tonnes in 2014, a 20% decline. Since 2014, however, consumption has picked up again, reaching 240,000 tonnes in 2015 and 271,000 tonnes in 2016. In 2017, Hengshui expects consumption to keep growing, reaching a high of up to 293,000 tonnes (see Figure 3. p21).

Four companies accounted for 168,500 tonnes, or 62% of total consumption, in 2016. They were Hengshui Jinghua Chemical (73,500 tonnes), Casda Biomaterials (45,000 tonnes), Tianxing Biotechnology (35,000 tonnes) and Shandong Dongying Shunli Chemical (15,000 tonnes). Among the diﬀerent applications for which castor oil is used in China, the largest is the production of sebacic acid, which consumed 55% or 150,000 tonnes of the country’s entire castor oil supply. Castor oil is the primary raw material in the production of sebacic acid, a naturally occurring dicarboxylic acid that, in its pure state, is a white flake or a powdered crystal. Approximately 40% of Chinese annual sebacic acid production goes into making polyamide resin, which is further processed into nylon, with the rest divided between the production of esters and adhesives (30%), coolants (20%) and other products (10%). China is the world’s largest sebacic acid producer. Its output covers more than 95% of the global market, according to Hengshui. The conversion ratio of castor oil into sebacic acid is approximately 2:1, with 1.9 tonnes of castor oil yielding one tonne of acid. Byproducts of sebacic oil production include sectol alcohols, fatty acid and glycerine, which are widely used in the alcohol, plasticiser, paint and other industries. In 2016, China exported 47,100 tonnes of sebacic acid, approximately on the same level as 2015 exports, says Hengshui, which is China’s larges manufacturer of the product. However, in the last quarter of 2016, environmental concerns caused the Chinese government to impose a limit on industrial production, which brought parts of the sebacic acid industry to a halt. At the end of the year, out of the 10 manufacturing enterprises in China, only six were operating. However, Hengshui believes that the producers will improve their factories and upgrade their equipment to meet the governmental requirements. “It will help the whole industry be more green and healthy,” the company says. After sebacic acid, the lithium 12-hydroxystearate – or 12-HSA – industry is the second largest consumer of castor oil in China. Production of 12-HSA uses up 12% of the total supply, equalling 32,500 tonnes. As with sebacic acid, China is one of the main producing countries of 12-HSA, with six major producers residing in the country, including Shandong Tianxing and Neimengu Tonghua. The chemical is a vital, non-

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01/04/2019 09:29:24

CASTOR OIL substitutable material in the production of lithium base grease. Approximately 85% of the 12-HSA supply is used to make curing agents and densifiers, says Hengshui, with 10% going towards producing surfactants and the remaining 5% towards other applications. Hengshui projects that economic development in China and globally will rapidly increase the consumption and production of lubricating greases, thus boosting the demand for 12-HSA. In addition to the two largest applications, China uses castor oil in the paints (8% or 22,500 tonnes), printing and dying (7% or 17,500 tonnes), adhesives (6% or 15,000 tonnes) and other industries (12% or 33,500 tonnes), says Hengshui. The latter category includes, among others, the beauty/cosmetics and medical sectors, where castor oil is popular. In medicine, castor oil is used internally as a powerful laxative and externally as a topical lotion or a pack or poultice for various skin conditions. In cosmetics, it is used as a tonic to improve hair growth and counter hair loss. Various other industrial uses include the production of motor oils, plastics, insecticides and insulation materials.

Stumbling blocks

Figure 2: Monthly castor oil imports to China (2013-2016)

350 300

260

250

245

240

271

293

200 150 100 50 0

The Chinese castor industry is, however, facing two issues that could prove a stumbling block for its recovery. The first one is the weakening yuan against the US dollar. The CNY/USD exchange rate has climbed from around 6.15 in January 2015 to a record high of 6.96 in January 2017. The rate has been coming down since and, at the time of writing, was hovering in the region of 6.5, with a slight upwards peak. Nirmal Bang notes that Chinese imports of castor oil were higher when the yuan was stronger against the US dollar. The weakening currency could be one of the drivers behind the Chinese government’s decision to funnel funds into castor cultivation and slower imports would spell good news to Chinese farmers due to an increased domestic demand. However, if the Chinese castor crop ends up being lower than expected, the weak yuan will make it expensive for castor oil refiners, such as Hengshui, to plug the hole left in the oil supply. Another problem facing the industry is China’s constant large-scale environmental woes. Problems with smog and air pollution were so bad at the end of 2016 in the north of China – where the country’s major castor oil processors are located – that the local government

308

2012

2013

2014

2015

2016

2017*

Figure 3: Annual castor oil consumption in China (KT)

adopted a series of measures to limit industrial production. The order had an impact on castor processing, says Hengshui, particularly on the sebacic acid industry, which saw its output drop by nearly 40% year-onyear. The lower production tightened the supply of the acid and drove prices higher. However, Hengshui believes that the increased investment in castor (not to mention a possible fear of being driven out of business) will motivate producers to upgrade their plants with more environmentally friendly equipment in order to meet new government guidelines.

Forecast for the future

If the trend of the past 10 years continues, China’s manufacturing industry will keep developing quickly. The rapid advancement, according to Hengshui, will cause castor oil – a speciality product – to be applied in more fields and application, thus increasing the demand for the oil. The company also projects that relevant industries in China will upscale their production and install more automation and high-tech equipment, further increasing the consumption of castor oil.

As a result of rising demand and consumption, China’s domestic castor seed and oil production are expected to get new wind under their wings. Despite the increased local production, Hengshui projects imports to rise as well from all over the world, with India maintaining its place as the number one source of castor oil in China. Nirmal Bang’s view corresponds with Hengshui’s. The trading and broking firm says large stocks of castor oil in both China and the second biggest importer the EU, backed by a rally in export prices, may result in a slowdown of Indian imports. China’s castor oil industry stands at a precipice where progression into either increased domestic production or further reliance on import seems possible. Much will depend on how the projected production increase within China in the 2017-2018 season turns out. Nonetheless, industrial development will keep demand high in either case and it seems unlikely China would not find some way to feed its castor oil processors. ● Ile Kauppila is former assistant editor at OFI

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DIARY OF EVENTS DGF events for oils and fats industry The German Society for Fat Science (DGF) is organising three symposiums focused on production, 3-MCPDs and GEs, and plant lipids. 6th Leipzig Symposium 19 March - 20 March 2019 Leipzig, Germany http://www.dgfett.de/meetings/aktuell/ leipzig2019 2nd MCPD Esters & Glycidyl Esters Symposium 2019 21 May - 22 May 2019 Seminaris Campus Hotel, Berlin, Germany http://www.dgfett.de/meetings/aktuell/ berlin2019mcpd 9th European Symposium on Plant Lipids 7 July - 10 July 2019 World Trade Centre, Marseille, France http://www.dgfett.de/meetings/aktuell/ marseille2019

The 6th Leipzig Symposium is focused on the latest trends in technology, operation and plant management. The aim of the 2nd MCPD Esters and GE Symposium is to give an update on the status and knowledge of all aspects of MCPD esters and glycidyl esters in oils and food. More than 10 years after the first findings of 3-MCPD esters in vegetable fats and oils, qualified experts will discuss relevant aspects of formation and mitigation during oil and food processing, new developments in analytics and the toxicological assessment of the esters and approaches taken for their regulation. The European Symposium on Plant Lipids will showcase the role of lipids in plant/ algal development, physiology and biotech applications. For all events, contact: DGF, Germany Telephone: +49 69 7917-529 Email: info@dgfett.de

28-30 April 2019

3-5 June 2019

12-15 June 2019

Globoil International Marquis, Dubai, UAE www.teflas.com

CESIO 11th World Surfactant Congress Munich, Germany www.cesio-congress.eu

EFPRA Congress 2019 Atlantia Congress Centre La Baule, France www.efpralabaule2019.com/ en

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

5-6 June 2019

13-15 June 2019

Oleofuels 2019 NH Laguna Palace Venice, Italy www.wplgroup.com/aci/ event/oleofuels

30th Nordic Lipidforum Symposium Horsness, Denmark https://lipidforum.info

The 9 ICIS World Surfactants Conference Jersey City, USA www.icisevents. com/ehome/index. php?eventid=200178918

10-12 June 2019

16-19 June 2019

2019 International Fuel Ethanol Workshop & Expo Indianapolis, USA www.fuelethanolworkshop. com

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

21-22 May 2019

11-12 June 2019

17-19 June 2019

MCPD Esters and Glycidyl Esters – Symposium 2019 Berlin Germany www.dgfett.de/meetings/ aktuell/berlin2019mcpd

IGC Grains Conference 2019 London, UK www.igc.int/en/conference/ registration/regform.aspx

31 May 2019

2019 Advanced Biofuels Conference Omaha, USA www.advancedbiofuels conference.com

The 9th International Conference on Algal Biomass, Biofuels and Bioproducts Embassy Suites, Boulder Colorado, USA www.elsevier.com/events/ conferences/internationalconference-on-algal-biomassbiofuels-and-bioproducts

Odessa Shipping Dinner Odessa, Ukraine http://grainandmaritime.com/ about-osd.html

11-13 June 2019

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

8-13 September 2019 FOSFA Basic Introductory Course Egham, Surrey, UK www.fosfa.org 25-27 September 2019 Globoil India Mumbai, India www.teflas.com 5-11 October 2019 18th AOCS Latin American Congress and Exhibition on Fats, Oils and Lipids Foz do Iguacu, Brazil www.meetings@aocs.org 20-23 October 2019 17th Euro Fed Lipid Congress Seville, Spain www.eurofedlipid.org/pages/ sevilla.html 29-30 October 2019 Organic & Non-GMO Forum Minneapolis, Minnesota, USA www.ongforum.com 28 October-1 November 2019 86th NRA Annual Convention Carlsbad, California, USA www.nationalrenderers.org/ events/convention/ 9-10 November 2019 2nd AOCS China Section Guangzhou, China www.aocs.org/networkand-connect/membership/ sections#china-section 19-21 November 2019 International Palm Oil Congress & Exhibition 2019 Kuala Lumpur, Malaysia http://pipoc.mpob.gov.my 22-23 Novemeber 2019 PORAM Annual Events 2019 (Forum, Golf & Dinner) Malaysia http://poram.org.my/p/

23-28 June 2019

10-12 February 2020

FOSFA Advanced Course Egham, Surrey, UK www.fosfa.org

WCOF Sydney 2020 Sydney, Australia www.wcofsydney2020.com

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28/03/2019 14:28:40

STATISTICS STATISTICAL NEWS FROM MINTEC Olive oil

Global olive oil production for the 2018/19 season is expected to fall, down 6% y-o-y. Consumption is also forecast to fall 2% y-o-y, to 2.9M tonnes, 6% below production. The EU remains the largest producer, with production forecast to rise 2% y-o-y in 2018/19, with production in Spain up 27%. However, other parts of Europe continue to struggle with disease, and countries such as Italy (down 38%) and Greece (down 35%) are suﬀering large losses. Prices for Italian virgin olive oil are up 40% y-o-y overall. Ideal growing conditions for Spanish olives have led to a boost in production, causing Spanish extra virgin olive oil prices to fall, down 23% y-o-y. Despite the high demand, prices are down 9% since the start of the year.

Extra virgin olive oil prices (€/kg)

Sunﬂower oil

Sunﬂower oil has remained relatively stable since the start of 2019. Global production remains up 7% y-o-y, with high production seen in Russia and Ukraine, up 15% and 6% respectively. Output in Argentina is also up y-o-y by 8%. Global exports are also seeing an increase, however only slightly at 2%.

Soyabean and soyabean oil

Soyabean CBOT prices are down 4% from the start of the year. However, prices for soyabean oil are 3% up. Global soyabean production is up 6% y-o-y. Brazil’s production fell, down 3% y-o-y, following severe droughts seeing the harvest being brought forward with a lower yield. However, Argentina has seen ideal conditions, boosting its harvest, which is now forecast 46% up y-o-y for 2018/19 after a particularly low 2017/18 season. Global production for soyabean oil is projected up 3% y-o-y and ending stocks are also expected to increase 5% in 2018/19. The US-China trade war continues to weigh heavily on the soyabean market, with China shifting demand to alternative vegetable oils.

Soyabean oil prices (US$/tonne) Sunﬂower oil fob NW Eur (L)(DH-3)

Sunﬂower oil prices (US$/tonne)

Prices of selected oils (US$/tonne) 2017

Nov 18

Dec 18

Jan 19

Feb 19

Mar 19

Soyabean

829.0

722.1

707.7

718.8

736.8

734.7

Crude palm

690.0

522.8

526.5

585.5

588.4

556.9

Palm olein Coconut Rapeseed Sunﬂower

661.0

555.5

533.5

576.4

581.5

563.1

1,537.0

780.6

824.0

814.5

747.8

766.3

855.0

830.3

810.8

826.7

810.5

793.4

800.0

670.8

679.5

694.2

707.5

704.4

1,250.0

718.2

752.9

799.6

740.8

715.0

Average

946.0

686.0

691.0

717.0

702.0

691.0

Index

224.0

162.0

164.0

170.0

166.0

164.0

Palm kernel

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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01/04/2019 09:25:08

Every bean is precious. Treat it that way. Bühler’s process technology and associated equipment for soybean dehulling is setting highest efficiency standards. At every stage – cleaning, heating, popping, cracking, hull separation and subsequent flaking – the machinery works seamlessly together to minimize total cost of ownership and to achieve highest yields from both, freshly harvested and highmoisture soybeans. Find out more: www.buhlergroup.com/oilseeds media@buhlergroup.com

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