POINTERS: The Global Supply, Demand and Price Outlook in the New Environment

By: Mr. Thomas Mielke

Thomas Mielke is Executive Director of ISTA Mielke GmbH in Hamburg (Germany), OIL WORLD, a leading research organization that provides global supply, demand and price analyses, statistics and forecasts for all the major oilseeds, vegetable oils & animal fats and oilmeals as well as for biodiesel and livestock products with clients in 100 countries. He is a frequent speaker at conferences and workshops all over the world. Thomas Mielke joined the OIL WORLD team in the mid-1970s, after studying economics. He is a member of the Programme Advisory Committee of the Malaysian Palm Oil Board and is giving lectures at the University of Hamburg (TUHH). In 2014 Thomas Mielke received a Lifetime Excellence Award of the Malaysian industry in recognition of his contributions and commitments. OIL WORLD was founded in 1958 and is recognized worldwide as a leading independent, authoritative and unbiased information provider. The WEEKLY and daily FLASH reports can be obtained from www.oilworld.de and also an OIL WORLD report in Mandarin is released 2 times a week.

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The covid-19 pandemic has resulted in significant changes also on the global supply and demand of oilseeds, oils and oilmeals. Thomas Mielke will highlight them and discuss impacts on the price outlook of palm and lauric oils and give reference to the just released 700-page Oil World Annual 2020 (www.oilworld.biz). The interdependence with other commodities must be acknowledged, in particular with soybeans & products, the rapeseed and sunflowerseed complexes as well as crude mineral oil.

The prospective vegetable oil demand for food will be discussed on a global scale, with particular emphasis on India and China. It will be outlined why world exports of vegetable oils will pick-up in April/June 2020 after the big year-on-year reduction in Jan/March and to what extent palm oil is likely to benefit.

Massive downward revisions have become necessary in biodiesel consumption worldwide since early 2020. Thomas Mielke will present latest Oil World forecasts on biodiesel production for Jan/Dec 2020 and analyse the major feedstocks used (palm oil, soya oil, rapeseed oil and used cooking oil). And , interestingly, he will explain why in the European Union palm oil usage for biodiesel production will not be reduced much.

Palm oil is facing many challenges also on the supply side. Yields and production have fallen short of expectations so far in 2020. The labour shortage will become more severe in Malaysia in July/Dec 2020, if the Government keeps its new, very restrictive policy on foreign labour, creating the risk of even greater production losses.

Forecasts will also be presented on the world production of palm oil, soya oil and other oils and fats, on the likely development of stocks as well as on prices.

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Questions & Answers (2) :

Masui Nobuhiko

3 years ago

Dear Mr. Thomas Mielke Thanks for your information. I was pleased to attend your presentation as we missed it at POC which was cancelled. Can I ask a few questions, 1) Why would you like to indicate fats and oil price -by palm oil with premium to gas oil in Euro ? Influenecd by Biodisel demand in Euro, even its demand will be decreased in 2020. 2) The demand for HORECA = Hotel, Restaurant and Caffe in 2020 will be less, that of for home use more, totally less, in 2021, the demand for HORECA will be recovered, the demand for home will be maintained, totally more than in 2020 ? influenced by life style change. 3) For Laurics mainly used at oleochemicals My impression considering your CIF base forecasting PKO (FOB) 2019/2020 650 - 715 2020/2021 715 - 735 us$/mt CNO(FOB) 2019/2020 740 - 840 2020/2021 820 - 920 us$/mt Coudl you advise if you have another idea, please ? Finally thanks again for your kind explanation to us, it is just at budget season, very useful to us. Best regards, Masui Nobuhiko, Kao Corporaton * I am as old as Oil World - as I was born in 1958....

Thomas Mielke:
Dear Mr Masui Nobuhiko, Many thanks for your kind words of appreciation. We are grateful for the long relationship with Kao Corporation in Japan and your loyalty as a subscriber to the Oil World Weekly and the Oil World Annual for so many years. 1) The gas oil (diesel fuel) price is a good indicator for the price competitiveness of palm oil and other oils & fats as a feedstock in the energy market. Palm prices have sharply increased above the price of gas oil since end-2019 and stayed at a very high premium also in Jan/June 2020. As a result, consumption of palm oil and other oils & fats declined in the energy sector, particularly outside the biodiesel consumption mandates. Due to the price premiums, the biodiesel mandates were partly not fulfilled in several countries. Biodiesel production fell below target, as we have pointed out in greater detail in the Oil World Weekly of June 26.. 2) HORECA demand declined sharply during lookdown, but is now recovering as restrictions are being eased or removed. 3) We expect coconut oil prices to stay high at an average US $ 960 for the average of July/Dec 2020 in Rotterdam for nearest shipment (compared with actual average price of US $ 782 in July/Dec 2019), mainly due to tight Philippine export supplies. But with Philippine production likely to rebound next year, coconut oil prices should come under pressure and our forecast for Jan/June 2021 is US $ 860. The premium vis-�-vis palmkernel oil in Rotterdam is anticipated to narrow to US $ 110 in Jan/June 2021 from an estimated US $ 190 for the average of July/Dec 2020. We will continue to monitor the supply and demand developments, adjust our forecasts and price conclusions, and keep our subscribers informed in the Weekly and Flash reports. Let me know if there are any questions to the above or any further questions to the market. It is my pleasure to be of service. Thanks and kind regards Thomas Mielke, www.oilworld.biz
3 years ago

K K Goyal

3 years ago

Very useful informations. Well explained. Thanks .