Turkey... Growing Market for Vegoils & Fats Faik Genç AgriPro Limited Black Sea Grain, Kiev 13-14 April 2011
Main Topics 1. World Oils/Oilseeds& Sun Complex 2. Turkey 3. Turkish Oils & Oilseeds Balances 4. Sun Complex 5. Sun Complex & Price Outlook 6. Conclusions
World Oils/Oilseeds& Sun Complex
World Oilseed Production (2010/11) million tonnes/year Soybeans 258.52 Rape/canola seeds 58.78 Sunflowerseeds 32.74 Cottonseeds 43.81 Groundnuts 23.78 Others 24.88 TOTAL 442.51 SOURCE: OIL WORLD/AgriPro 2011
World Vegoil Production (2010/11) million tonnes/year Palm Oils 47.53 Soya Oil 42.03 Rape/Canola Oil 23.23 Sunflower Oil 12.11 Cottonseed Oil 4.84 Groundnut Oil 4.15 Corn Oil 2.40 Others 2.45 TOTAL 146.30 (excl. olive oil) SOURCE: OIL WORLD/AgriPro 2011
World Sunseeds Production (2010/11) million tonnes/year Ukraine 7.70 Russia 5.60 EU-27 7.03 Argentina 3.20 China 1.68 USA 1.32 India 1.00 TURKEY 0.90 Others 2.45 TOTAL 32.64 SOURCE: OIL WORLD/AgriPro 2011
Turkey
Turkey Fact File Population : 78.7 million Population Growth : 1.235% GDP : US$ 729.1billion GDP per capita : US$ 12,300 GDP Growth 2010 : 7.3%(-4.7% in 2009) Exchange rate : US$ 1 = 1.53Turkish Lira SOURCE : CIA WorldFactbook March, 2011
Turkey Fact File Annual inflation (consumer): 8.7% Unemployment : 14% Age Structure : 0-14... 26.6% 15-64... 67.1% 65 & over... 6.3% Meridian Age : 28.5 SOURCE : CIA WorldFactbook March, 2011
Turkey Fact File Fertility rate : 2.15/woman Urban Population: 70% Total Land : 783,563 sq km Arable Land : 29.81% Irrigated Land : 52,150 sq km SOURCE : CIA WorldFactbook March, 2011
Turkey Major Crops Wheat : c. 20 million tonnes Sugar beat Corn Barley Oilseeds : c. 16million tonnes : c. 4million tonnes : c. 7.5 million tonnes : c. 1.85 million tonnes SOURCE : AgriPro, Dec. 2010
Turkey Oilseeds Sunflowerseeds : 900,000 tonnes Cottonseeds Rapeseeds Soybeans TOTAL : 850,000 tonnes : 50,000 tonnes : 50,000 tonnes : 1,850,000 tonnes SOURCE : AgriPro, Dec. 2010
Turkish Oils & Oilseeds Balances
Turkish Vegoil Market Size per capita consumption: 20.89 kg/year Exports (Liquid/Margarine) Domestic Margarine Domestic Liquid Industrial (feed, paint etc.) Liquid oils : 12.57 kg per capita - 930,000 tons/year Margarine : 7.14 kg per capita - 528,000 tons/year
Liquid Oils Consumption (thousand tonnes) 1050 1000 992 950 958 930 900 883 850 850 850 800 750 700 650 691 734 707 717 677 735 738 600 1997 1998 1999 2000 2001 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 Source: AgriPro 2011
Margarine Consumption (thousand tonnes) 600 500 400 404 368 420 399 393 419 437 450 488 500 562 550 528 300 200 100 0 1997 1998 1999 2000 2001 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 Source: AgriPro 2011
Total Vegoil Oil Consumption (thousand tonnes) 1900 1800 1796 1766 1700 1600 1500 1637 1548 1400 1397 1377 1300 1200 1209 1253 1100 1095 1102 1127 1116 1070 1000 1997 1998 1999 2000 2001 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 Source: AgriPro 2011
Oilseeds Production (thousand tonnes) Source: AgriPro 2011
Sunseeds Production (thousand tonnes) 1000 950 900 900 900 800 820 850 800 700 700 650 600 560 595 600 500 500 520 Custom Duties change 400 1998 1999 2000 2001-2002 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011 Sunseeds Source: AgriPro 2011
Total Oilseeds Production (thousand tonnes) 2.400 2.300 2285 2355 2280 2.200 2.100 2145 2095 2.000 1.900 1.800 1907 1941 1774 1760 1895 1975 1995 1850 1.700 1.600 1.500 1998 1999 2000 2001-2002 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011 Total Oilseeds Source: AgriPro 2011
Turkish Oilseeds Production (without cottonseeds, 000 tonnes) 1.200 1.100 1.000 1005 980 1000 900 915 895 895 800 745 700 600 500 620 661 544 1998 1999 2000 2001-2002 560 2002-2003 2003-2004 645 2004-2005 675 Custom Duties change 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011 Total Oilseeds Source: AgriPro 2011
Sunseeds & Sunoil Imports (thousand tonnes) 900 800 700 600 500 400 300 200 100 0 154 66 356 288 305 95 640 192 459 228 629 157 445 132 523 98 183 133 129 91 228 581 67 82 1,993 1,994 1,995 1,996 1,997 1,998 1,999 2,000 2,001 2,002 2,003 2003-2004 2004-2005 520 149 2005-2006 431 407 2006-2007 490 123 2007-2008 532 337 2008-2009 850 432 2009-2010 755 184 Sunseeds Crude Sunoil Source: DTM/Undersecretariat of Foreign Trade
Soybeans & SoyOil Imports (thousand tonnes) 1,800 1,600 1646 1,400 1,200 1,000 800 760 1102 889 1216 1340 1076 600 612 621 400 200 0 242 285 353 387 321 224 133 140 169 149 164 153 166 158 154 174 100 133 123 190 141 30 58 76 1,994 1,995 1,996 1,997 1,998 1,999 2,000 2,001 2,002 2,003 2003-2004 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 30 39 9 2009-2010 Soybeans Soy Oil Source: DTM/Undersecretariat of Foreign Trade
140 120 100 80 60 40 20 0 43 68 Corn Oil Imports (thousand tonnes) 117 109 112 117 110 97 91 82 84 81 77 63 104 65 52 2009-2010 1997 1998 1999 2000 2001 2002 2003 2003-2004 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 Source: DTM/Undersecretariat of Foreign Trade 1996 1995 1994
Rapeseeds & Rape Oil Imports (thousand tonnes) 300 250 200 Ukraine rapeseeds arrive in the scene 190 220 262 150 100 105 113 50 0 1993 3 0 1994 1995 14 12 1996 1997 2 1998 13 1999 22 2000 34 2001 20 12 12 8 10 9 10 15 2 5 2002 2003 2003-2004 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 2 Rape/Canola Oil Rape/Canola seeds Source: DTM/Undersecretariat of Foreign Trade
700 600 500 400 300 200 100 0 244 226 237 210 Palm Oil Imports (thousand tonnes) 588 366 317 257 194 194 399 386 450 440 435 523 420 510 2008-2009 2009-2010 1998 1999 2000 2001 2002 2003 2003-2004 2004-2005 2005-2006 2006-2007 2007-2008 Source: DTM/Undersecretariat of Foreign Trade 1997 1994 1995 1996 1993
Total Oils & Oilseeds Imports (thousand tonnes) 3.500 3.000 2.500 2610 3200 2.000 1998 2092 1747 1.500 1.000 500 0 744 689 763 797 579 595 770 734 222 237 1691 1510 1.265 1341 1.028 1.089 996 850 579 590 704 757 796 794 699 691 833 811 536 Custom Duties change 1015 1028 758 572 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 Oils Oilseeds Source: DTM/Undersecretariat of Foreign Trade
Major Import Duties Sunseeds : 27%(0% with tariff quotas) ($141.75 min.) Soybeans : 8% Rapeseed : 10% (min. $52.5/mt) Crude Sunoil : 36% Refined Sunoil : 50% Other Vegoils : 31.2% Major Grains : 130% Protein Meals : 13.5%
Turkish Vegoil Exports Main Destinations : Iraq, Syria, Algeria, Iran, EU-27, UAE Sorce: DTM(Undersecretariat of Foreign Trade
Total Turkish Oil Demand (2009-2010) Liquid oils Margarine Exports Industrial TOTAL : 930,000 tons : 528,000 tons : 220,000 tons : 88,000 tons : 1,766,000 tons * Olive Oil excluded
2000 1800 1600 1400 1200 1000 800 600 400 200 0 Vegoils Suppy & Demand 1796 1766 1637 1660 1461 1,0991,0981,1301,131,09 1,1541,2531397 383 407 494 421 378 523 429 438 516 582 465 347 446 1998 1999 2000 2001 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 Total Supply Total Demand 1997
Turkish Vegoil Production Capacity Crushing capacity: Utilisation : c. 75% 5.0 mn tons Liquid Refining capacity: Utilisation : c. 70% 2.0 mn tons Margarine capacity: Utilisation : c. 70% 0.85 mn tons
Turkey Oilseeds Crush (thousand tonnes) 4000 3500 3573 3000 2500 2000 2343 2532 2593 2366 1948 2881 2815 2870 3040 3262 3253 2672 GMO issue 1500 1000 500 Custom Duties change 0 1997 1998 1999 2000 2001 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010
Sun Complex
CME Soyoil vs. Grains 2009-11
CME Soyoil vs. Wheat 2009-11 Trend line Trend line
CME Wheat 2009-11 Trend line
CME flat price increase 2009-11 Between 31.12.2008 & 08.04.2011 Wheat 77% Corn 54% Soybeans 70% Soyoil 56%
CIF TR Sunseeds v Sunoil 2007-2011
CIF TR Sunoil v Soyoil 2007-2011
$1,500 $1,400 $1,300 $1,200 $1,100 $1,000 $900 $800 $700 $600 CIF TR Sunoil v Soyoil 2009-2011 30/12/08 12/1/09 26/1/09 9/2/09 23/2/09 9/3/09 23/3/09 6/4/09 20/4/09 4/5/09 18/5/09 1/6/09 15/6/09 29/6/09 20/7/09 3/8/09 17/8/09 31/8/09 14/9/09 28/9/09 12/10/09 26/10/09 9/11/09 23/11/09 7/12/09 21/12/09 1/1/10 15/1/10 29/1/10 12/2/10 26/2/10 12/3/10 26/3/10 9/4/10 23/4/10 7/5/10 21/5/10 4/6/10 18/6/10 2/7/10 16/7/10 30/7/10 13/8/10 27/8/10 10/9/10 24/9/10 8/10/10 22/10/10 5/11/10 19/11/10 3/12/10 17/12/10 31/12/10 14/1/11 28/1/11 11/2/11 25/2/11 11/3/11 25/3/11 8/4/11 CIF TR Crude Sunoil CIF TR Crude Degummed Soyoil
CIF TR Sunoil v Soyoil 2010-11
Sun-Soyoil Price Delta 2009-11
Sunoil Price v Delta 2009-11
World Sunoil Imports
World Sunoil Usage
Sun Complex & Price Outlook
Facts World sunflowerseeds production will increase by at least 2 million tons in 2011-12 season. Increase to come from Russia, Hungary, Turkey& Argentina. The premium of sunoil over soyoil came down drastically, in the first 4 months of 2011. Currently premium is at $80/mt on origins FOB, and premium/discount of «NIL» on CIF Turkey basis. EU-27 with 1 million tons, constitutes 22.5% of all sunoil imports. But EU will buy less in 2011-12 season with better EU/Ukrainian rapeseed production. Argentina with a production of 3.5 million tons will be a player in the sunflower world trade, after several years, This will add a bearish tone to sunseed/oil prices in 2011-12.
Facts India is an extremely price sensitive market in edible oils. When sunoil spread narrows or goes negative, Indians switch to sunoil, but not fully. Turkey imports 54% of all world sunseeds imports (1.54m tons) and 4.5% of all world crude sunoil imports(4.42m tons). Ukraine exports c.350,000 tons of sunseeds, about 60-70% of which destined for Turkey. Ukraine exports around 2.6m tons of sunoil, about 10% of which destined for Turkey. Egypt and Turkey are the solededicated sunoil importers/users in the world. However, Egypt optsfor soyoil when price spread is over $120-130/mt with sunoil.
Facts Turkey is the sole «dedicated» sunseeds/sunoil importer in the world, REGARDLESS OF PRICE. Turkey each year, imports around 750,000 tons of sunflowerseeds and 250,000 tons of crude sunoil AND GROWING... Turkey imports, around 1.7 million tons of soybeans AND GROWING... During big export years to the Middle East (2008/09) Turkish crude sunoil imports can go up to 450,000 tons, some 10% of all sunoil imports. I predict 2010-11 to finish around 300,000 tons.
Assumptions Japanese earthquake/tsunami disaster is largely priced and there will not be a freshfinancial meltdown in the global markets. Global growth of world economy to keep up with the rate of 3%, minimum. There is no further problem with problematic EU economies such as Portugal, Spain, Ireland etc. Petroleum oil prices remaining above $110 a barrel. There will be nomajor weather problems with 2011 US soy or corn crops. US/South American biodiesel mandates remain in force.
Price Outlook There will be severe price volatility throughout 2011 with hedgefund activity and political unrest mainly in the Middle East & North Africa. I predict, world grains & oilseeds prices to be firm for the rest of theseason,mainly duetolowercornending stocksintheus. However I don t see edible oils maintaining current levels until August 2011. For the new crop, I am bearish for the sunseeds &sunoil. The price spread between sunoil & soyoil will be the deciding factor in the second half of 2011, for the sun complex. I predict thesunoilpremiumoversoyoil,continuetobeverylow.
Price Outlook $1,320/mt FOB Black Sea crude sunoil level is not sustainable until June-July, when Turkish demand will rise in front of Ramadan. I predict FOB Black Sea sunoil prices to go up to $1,320-1,350 level come next August, with Turkish demand, decreasing crush in the Ukraine & soyoil demand rising for biodiesel in the US. We may see crude sunoil prices as low as, $950/mt FOB Black Sea for the new crop (October-December 11). Sunflowerseeds price for October-December 2011 to be at $425- $450/mt FOB Black Sea level. Indian demand can drive sunoil prices up to $1,200/mt FOB Black Sea, in November-December 2011 period.
Conclusions Grains & Oilseeds can go further up towards the end of the season in the northern hemisphere with mineral oil prices being the key factor. Sun complex price levels are not sustainable until July and for the the new crop, with increased world sunflower production. But we canseeapricespikeinaugust2011. Indian demand in November-December 2011 will be the key factor for the sun complex. Turkey is the largest destination of sunseeds/sunoil destination in the world, regardless of price, AND GROWING.
Turkey... Growing Market for Vegoils & Fats Thank you! Faik Genç, AgriPro Limited Black Sea Grain, Kiev, 13-14 April 2011
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