Global Supply, Demand and Prices of Edible Oils ...

[Pages:18]Thomas Mielke, for more info

POC Conference - - 24 March 2021

Global Supply, Demand and Prices of Edible Oils - - Outlook 2021

Presentation at the POC Event on March 24, 2021

Thomas Mielke, ISTA Mielke GmbH, Oil World, Global Market Research on Oilseeds, Oils and Meals

24 Mar 2021

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Company Profil and Services

? ISTA Mielke GmbH ? publisher of OIL WORLD - was founded in 1958 ? ISTA = International STatistical Agricultural Information ? Leading private authority for global research and market analyses for oilseeds, oils & meals ? Independent, not involved in trading, unbiased information

? We provide a variety of reports - - the daily FLASH, the Weekly and updates from our huge statistical data base (monthly, quarterly and annual data) as well as the Oil World Annual (a 730-page compendium of world statistics), as described on

? A Chinese report in Mandarin on oilseeds & products two times a week

? Individual customer support with conference call and extracts from our detailed data bank

? Take a free 3-week trial and contact info@

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POC Conference - - 24 March 2021

Weekly Edible Oil Price Index

the five-year average 2015-2019 = 100 170 160 150 140 130 120 110 100

90 80 70

Jan19 Apr19 Jly19 Oct19 Jan20 Apr20 Jly20 Oct20 Jan21

January 2019 until 18 March 2021

Weekly Oilmeal Price Index

the five-year average 2015-2019 = 100 170 160 150 140 130 120 110 100 90 80 70

Jan19 Apr19 Jly19 Oct19 Jan20 Apr20 Jly20 Oct20 Jan21

January 2019 until 18 March 2021

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1600 1400 1200 1000

800 600 400 200

0

PRICES : Steep Increases in 7 Months

from early Aug until March 2021

US-$ / T

+51%

+24%

+60%

+93%

+61%

+103%

Soybeans Soyameal Soya oil Sun oil Palm oil Palmkernoil

3 Aug 2020

22 March 2021

Prices on 22 March 2021 versus 3 Aug 2020 in US-$ per T :

- Arg soya oil, fob $ 1253 (vs. 782) - Black Sea sun oil $1575 (vs. 815)

- Indo. crude palmoil $ 1100 (vs. 685) - Palmkern oil, cif Rott $ 1480 (vs. 730)

- Soybeans, cif Rott. $ 582 (vs. 385) - Arg soya meal, fob $ 420 (vs. 338)

Where are we going from here? Bullish factors are to a large extent already discounted.

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Monthly Prices of Palm Oil & Crude Mineral Oil (US-$/T)

1400 1300 1200

1100 1000

900 800

700 600 500 400

300

200

Crude mineral oil

100

0

Palm oil, crude

Ja03Ja04Ja05Ja06Ja07Ja08Ja09Ja10Ja11Ja12Ja13Ja14Ja15Ja16Ja17Ja18Ja19Ja20Ja21

Monthly prices from Jan 2003 until 11 March 2021

Palm oil prices rallied to a 9-year high

Record price spread to fossil fuels

Discretionary palm oil demand for energy almost zero

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1300 1200 1100

Daily Prices of 2 Oils (US-$/T)

Soya oil, fob, Argentina Palm oil, crude, fob Indonesia

1000

900

800

700

600

500

Jly

Aug Sep Oct Nov Dec Ja21 Feb Mar Daily prices from 1 July 2020 until 22 March 2021

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Indonesian crude palm oil more than doubled from US $ 500 in May 2020 to US $ 1130 on 23 March 2021, a 9-year high

Palm oil use in biodiesel & HVO still high at 17.3 Mn T in 2020 (23% of total use)

In the 2020/21 season there is, for the first time, a simultaneous tightness of all the 6 major veg oils worldwide

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Quarterly World Palm Oil Output (Mn T)

Year-On-Year Changes

3

2,5

2 1,5

2019

1

0,5 0

2016

-0,5

2017 2018

2020 2021

-1

-1,5

-2

-2,5

-3

A/J O/D J/M17 J/S

A/J O/D J/M19 J/S

A/J O/D J/M21 J/S

J/M16 J/S

A/J O/DJ/M18 J/S

A/J O/D J/M20 J/S

A/J O/D

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1st bullish surprise: Lower than expected palm oil production in Jan/Sept 2020 and again in Oct/Dec 2020 and in early 2021. Falling stocks (despite corona-related consumption losses).

World palm oil stocks are currently at a multi-year low and represent only 15.6% of annual usage.

More info is available on

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17 OILS & FATS : World Production (Mn T)

80

70

Palm oil

60

50

Soya oil

40

30

4 Animal Fats

9 Other oils

20

Rape oil

Sun oil

10

0 99/00 02/03 05/06 08/09 11/12 14/15 17/18 20/21F

In 2020 palm oil accounted for 32% and soya oil for 25% of world production

Palm oil production has lost its growth momentum. Next 5-10 years: palm oil growth to slow by 20-25%

Supply & demand changes of palm & soya oils are key price-determining factors for edible veg oil complex

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10 9 8 7 6 5 4 3 2 1 0 -1 -2 -3 -4 -5

06/07

PALM OIL : World Production

Annual Change (Mn T)

08/09 10/11 12/13 14/15 16/17 18/19 20/21F October / September

World production of palm oil likely to rebound by 3.2 Mn T in Oct/Sept 2020/21 (but not by as much as four years ago) with Indonesia +3.3 Mn, but Malaysia down 0.5 Mn T

Low opening stocks (-2.5 Mn T) will limit the supply growth to 0.7 Mn T

Only moderate price setback 2021.

Labour shortage (production losses) a major constraint. Rising investments in mechanisation likely in 2021 and 2022

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PALM OIL: Year-on-Year Change in World Consumption 9 8 Mn T 7 6 5 4 3 2 1 0 -1 -2 -3

08/09 10/11 12/13 14/15 16/17 18/19 20/21F

Oct ober/ Sept ember

Prospects of only a moderate recovery in world palm oil supplies and consumption will limit the price decline for the remainder of 2021

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POC Conference - - 24 March 2021

Big Production Losses in Sunflower Complex

2nd bullish blow:

Drought in July/Sept 2020 severely damaged sunflowerseed crops in the Black Sea region World sunseed output down 5.5 Mn T in 20/21

in Russia down 2.1 Mn in Ukraine down 2.4 Mn Lower oil content World production of sun oil down even 3.0 Mn T in Oct/Sept 2020/21. Sun oil exports down 2.9 Mn T.

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Big Production Losses in Sunflower Complex

Weekly Prices of Sun Oil & Soya Oil (US-$/T)

2000 1800

For nearest forward shipment

Sun oil, fob Black Sea (Y1) Prem. /discounts (Y2)

900 800

1600

Soya oil, Arg., fob (Y1)

700

1400

600

1200

500

1000

400

Skyrocketing sun oil prices trigger rationing of consumption

Demand shifts have been price-supportive for soya and palm oils

800

300

600

200

400

100

200

0

0

-100

Oct19 Ja20

Apr

Jly

Oct Ja21 Mar

Weekly prices from Oct 2019 until 19 March 2021

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RAPESEED & CANOLA

World Production (Mn T) and Area (Mn ha)

70 65

Production

60 55 50 45

40 35

30

Harvested Area

25

20

15

01/02 03/04 05/06 07/08 09/10 11/12 13/14 15/16 17/18 19/20 00/01 02/03 04/05 06/07 08/09 10/11 12/13 14/15 16/17 18/19 20/21F

3rd Blow: Tightness in rape oil.

A declining trend in world production since the 2013/14 season

Rapeseed cultivation has lost attractiveness in the European Union and China

High import demand

But prospects point to a price-driven recovery in the years ahead

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W orld Output & Consum ption of 10 O ilseeds, M n T

6 00

5 50

D isa ppe aranc e

Pr odu ctio n

5 00

4 50

4 00

3 50

3 00

2 50

2 00

0 6/07 0 8/09 1 0/11 12/13 14/15 16/17 18/19 2 0/21

4th blow in soybeans & oil

Within 5 months the global soybean balance turned from surplus to tightness.

Downward revisions of US, Indian, Argentine and Brazilian crops

Huge Chinese demand

Global production deficits - of 15 Mn T in 2019/20 - of 12 Mn T in 2020/21

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POC Conference - - 24 March 2021

Soybean Crop Trend Since 74/75 (Mn T)

200

180

160

Argentina, Brazil & Paraguay

140

120

100

80

60

U.S.A.

40

20

0 75/76 80/81 85/86 90/91 95/96 00/01 05/06 10/11 15/16 20/21

Detrimental weather, partly unusual dryness and partly excessive moisture have sharply reduced soybean crops in S.America

My S. Amer. crop estimates are 15 Mn T below potential with this year`s area

My latest estimates in Mn T for early 2021: Brazil 131 (still too high?) Argentina 44 (too high?) Paraguay 9

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CBOT : Daily Soybean Futures (c/bu)

1500 1400 1300

May and November 2021 positions

May 2021 Nov 2021

1200

1100

1000

900

800

Sep Oct Nov Dec Ja21 Feb Mar Daily futures from 1 Sep 2020 until 22 March 2021

U.S.A. : Monthly Exports of Soybeans (M n T) 12

20/21

10

estim ated exports

19/20 8

6

4

2

0 Sept Oct Nov Dec Jan Feb M ar Apr M ay Jun July Aug

Huge disposals in USA. Exports in Sep/Feb 54.5 Mn T or 87% of total (vs. 30.4 Mn)

In Sept 2021 stocks at 7-year low in the US and at 5-year low worldwide.

Word demand shift to S.America from March. What will China do?

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