Palm Oil Internet Seminar

Section 2: Global Palm Oil Market Opportunities:
Prospects for Malaysian Palm Oil - Saudi Arabia
By: Mr. Pradeep Reddy

Pradeep has two decades of experience in bulk commodity procurement and commodity trading. He has been working in edible oils supply chain role in companies located around Middle East, South East Asia & India.

Pradeep is Post Graduate in Business Management with expertise in Price Risk management of commodity trading. Specialize in price risk management function of large commodity producers and consumers. Currently, Pradeep is working with Savola Foods Company based out of Jeddah, heading commodity research and Price Risk Management function.

Research paper presented with focus on Saudi Arabian Palm Oil market in specific and edible oil industry in general. This paper objective is to present industry segments where palm oil is key raw material or ingredient, key current and future trends that might shape the demand and palm oil trade.

Veg Oils are one of the major raw material in the direct food consumer demand and Industrial Food applications. Palm oil has 65% market share in the Saudi Arabia veg oil industry. Being volume leader in veg oil complex, any changes in the food and consumer use trends will impact the trade. Research paper try to discuss the facts and figures of those major trends.

Palm Oil being versatile application range, bulk volume availability and relatively cost competitive resulted in wide adoption by food industry applications. This paper objective is present key industry trends and future prospects of palm oil in consumer and food industry in macroeconomic, consumer market perspective.

Following are key points covered in this research paper:

 Edible oil market over view – Saudi Arabia perspective
 Oil types, annual volumes, market share, growth rate –CAGR
 Palm oil volume growth in Saudi Arabia food industry – Historical perspective and key drivers
 Population growth rate Vs Consumption growth rate
 Future Projections on food Industry demand

 Edible oil industry drivers
 Macro: Economic -GDP growth, Population Growth, Income Growth
• Oils & Fats per capita consumption trends, underlying drivers in regional markets
•18 KG per Capita (Developing world) | 24 KG per Capita (Developed) | 27 KG per Capita (Urban centric markets)

 Micro Economic
• Changes in Food consumption trends: Health, Convenience, Packaged, labeling
• Changes in Food service industry: Bakery | Confectionary| Fast Foods-Frying| Restaurant small scale | Catering –Large scale
• Changes in Consumer taste profile: Dairy fats vs Palm Oil fats

 Palm Oil Imports to Saudi Arabia | Trade Matrix with Importing countries and trade partners

 Future potential for Edible oils industry and Food Industry perspective
 Industry segments: Oils and Fats as Raw material and Ingredient
 Trends and changes future: Consumer segments

 Potential Opportunities for Palm Oil
• Value addition
• Ingredient replacement
• Cost advantages and product innovation
• Health labeling requirements: Trans-fat free foods
• Saturated fats replacement with PUFA/MUFA based fats in food ingredients

 Projected Palm Oil Volumes and Export opportunities – Long term

 Consumer segment
• Retail trends

 Industrial demand
• Catering – Small and medium scale
• Food industry – Bulk frying
• Ingredients- Specialty & custom products

Summary of Presentation:

Consumer demand expected to change per capita veg oil consumption from current 22kg/annum (Base 2019) to 26kg/annum (projection: 2029), the increase in demand will be captured by palm oil due to its production volumes, proximity to palm oil producing region and versatile application range from consumer to industrial uses. Population growth and consumer trends will evolve from fragmented user market to urban centric industrial scale food choices, that will result into increased use of palm oil volume, which is expected to outpace the trend line population based consumption growth.

Over all palm oil demand expected to grow 2.5% in volume CAGR in long term which is higher than population growth rate 1.8% mainly due to industrial scale food application demand. Palm Oil expected to retain market share of 60-65% in veg oil complex while total oils basket volume expected to grow. Industrial demand, Value added consumer products are the potential market segments to focus in long term for palm oil industry players in the regions as next wave of demand growth expected to come from those segments.

The full report will only be available from Feb 24, 2020 onwards.
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