MARKET DEVELOPMENT
Vegetable Oil Trade to Grow in 2015, Says Analyst
Vegetable Oil Trade to Grow in 2015, Says Analyst
20/03/2015 (IHS Maritime 360) - Seaborne trade of vegetable oils (including palm) is expected to grow in 2015 to reach 82.3 million tonnes, according to Italian shipbroker Banchero Costa.
Trade volumes are expected to grow in the next few years, fuelled by emerging economies, especially China and India. Consumption growth is expected to strengthen with population growth, higher living standards, and growing acceptance of Western dietary tastes.
Banchero Costa opined, "With a projected combined population of 2.8 billion by 2020, potential demand growth for vegetable oils is huge."
The use of vegetable oils as feedstock for biofuels is also expected to continue to grow rapidly in the coming years.
By 2020, the global market for biodiesel is expected to reach 35 million tonnes per year, stimulated by government policies.
In line with growing demand, Indonesia and Malaysia, the two biggest palm oil producers, have been ramping up production by 18% since 2010.
Indonesia and Malaysia account for 85% of global palm oil production and 90% of exports. Palm oil exports are expected to reach almost 48 million tonnes in 2018-19.
This augurs well for chemical tankers in the 10,000-29,999 dwt range while MR product tankers could be utilised for long-haul trips to Europe.
Still, Banchero Costa sounded a note of caution.
"Vegetable oil trades are historically resilient to changes in the macro-economic environment, sensitive to government fiscal policies, which continue to promote vegetable oil trade," the shipbroker said. "However, the recent slump in crude oil prices may reduce the use of vegetable oil for the production of biodiesel."
Trade volumes are expected to grow in the next few years, fuelled by emerging economies, especially China and India. Consumption growth is expected to strengthen with population growth, higher living standards, and growing acceptance of Western dietary tastes.
Banchero Costa opined, "With a projected combined population of 2.8 billion by 2020, potential demand growth for vegetable oils is huge."
The use of vegetable oils as feedstock for biofuels is also expected to continue to grow rapidly in the coming years.
By 2020, the global market for biodiesel is expected to reach 35 million tonnes per year, stimulated by government policies.
In line with growing demand, Indonesia and Malaysia, the two biggest palm oil producers, have been ramping up production by 18% since 2010.
Indonesia and Malaysia account for 85% of global palm oil production and 90% of exports. Palm oil exports are expected to reach almost 48 million tonnes in 2018-19.
This augurs well for chemical tankers in the 10,000-29,999 dwt range while MR product tankers could be utilised for long-haul trips to Europe.
Still, Banchero Costa sounded a note of caution.
"Vegetable oil trades are historically resilient to changes in the macro-economic environment, sensitive to government fiscal policies, which continue to promote vegetable oil trade," the shipbroker said. "However, the recent slump in crude oil prices may reduce the use of vegetable oil for the production of biodiesel."