Turkey Growing Market for Vegoils & Fats Ge… · • Ukraine exports c.350,000 tons of sunseeds,...

Turkey... Growing Market

for Vegoils & Fats

Faik Genç

AgriPro Limited

Black Sea Grain, Kiev

13-14 April 2011

1. World Oils/Oilseeds & Sun Complex

2. Turkey

3. Turkish Oils & Oilseeds Balances

4. Sun Complex

5. Sun Complex & Price Outlook

6. Conclusions

Main Topics

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)


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


Turkey

• Population : 78.7 million

• Population Growth : 1.235%

• GDP : US$ 729.1 billion

• GDP per capita : US$ 12,300

• GDP Growth 2010 : 7.3% (-4.7% in 2009)

• Exchange rate : US$ 1 = 1.53 Turkish Lira

Turkey Fact File

SOURCE : CIA WorldFactbook March, 2011

• 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

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

Turkey Fact File


Turkey Major Crops

• Wheat : c. 20 million tonnes

• Sugar beat : c. 16 million tonnes

• Corn : c. 4 million tonnes

• Barley : c. 7.5 million tonnes

• Oilseeds : c. 1.85 million tonnes

SOURCE : AgriPro, Dec. 2010

Turkey Oilseeds

SOURCE : AgriPro , Dec. 2010

• Sunflowerseeds : 900,000 tonnes

• Cottonseeds : 850,000 tonnes

• Rapeseeds : 50,000 tonnes

• Soybeans : 50,000 tonnes

TOTAL : 1,850,000 tonnes

Turkish Oils & Oilseeds Balances

Turkish Vegoil Market Sizeper capita consumption: 20.89 kg/year

Liquid oils : 12.57 kg per capita - 930,000 tons/year

Margarine : 7.14 kg per capita - 528,000 tons/year

Exports (Liquid/Margarine) Domestic LiquidDomestic Margarine Industrial (feed, paint etc.)

Liquid Oils Consumption(thousand tonnes)

691

734

707717

677

735 738

850 850

958

992

883

930

600

650

700

750

800

850

900

950

1000

1050

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)

404

368

420399 393

419437 450

488 500

562 550528

0

100

200

300

400

500

600

1997 1998 1999 2000 2001 2002-

2003

2003-

2004

2004-

2005

2005-

2006

2006-

2007

2007-

2008

2008-

2009

2009-

2010


Total Vegoil Oil Consumption(thousand tonnes)

1095 11021127 1116

1070

12091253

1397

1796

1637

1548

1377

1766

1000

1100

1200

1300

1400

1500

1600

1700

1800

1900

1997 1998 1999 2000 2001 2002-

2003

2003-

2004

2004-

2005

2005-

2006

2006-

2007

2007-

2008

2008-

2009

2009-

2010


Oilseeds Production(thousand tonnes)


Sunseeds Production(thousand tonnes)

560

595

500520

820

600

650

850

950

700

900

800

900

400

500

600

700

800

900

1000

1998 1999 2000 2001-

2002

2002-

2003

2003-

2004

2004-

2005

2005-

2006

2006-

2007

2007-

2008

2008-

2009

2009-

2010

2010-

2011

Sunseeds

Custom Duties change


Total Oilseeds Production(thousand tonnes)

19071941

1774 1760

2285

1895

1975

2145

2355

1995

2280

2095

1850

1.500

1.600

1.700

1.800

1.900

2.000

2.100

2.200

2.300

2.400

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


Turkish Oilseeds Production(without cottonseeds, 000 tonnes)

620

661

544560

915

645675

895

1005

745

980

895

1000

500

600

700

800

900

1.000

1.100

1.200

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



Sunseeds & Sunoil Imports(thousand tonnes)

6695

356

640

459

629

445

523

183129

228

581

520

407

490532

850

755

154

288 305

192228

157132

98133

91 67 82

149

431

123

337

432

184

0

100

200

300

400

500

600

700

800

900

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

2005-

2006

2006-

2007

2007-

2008

2008-

2009

2009-

2010

Sunseeds Crude Sunoil

Source: DTM/Undersecretariat of Foreign Trade

Soybeans & Soy Oil Imports(thousand tonnes)

30 58

169 149242

285353 387

321

612

760

621

1102

889

1216

1340

1076

1646

224133 140

100164 153 166 158 154 174

13376

123190

141

30 39 90

200

400

600

800

1,000

1,200

1,400

1,600

1,800

1,99

4

1,99

5

1,99

6

1,99

7

1,99

8

1,99

9

2,00

0

2,00

1

2,00

2

2,00

320

03-200

420

04-200

520

05-200

620

06-200

720

07-200

820

08-200

920

09-201

0

Soybeans Soy Oil


Corn Oil Imports(thousand tonnes)

43

68

82 84

63

77

9791

117

109

81

112117

110104

65

52

0

20

40

60

80

100

120

140

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2003

-200

420

04-2

005

2005

-200

620

06-2

007

2007

-200

820

08-2

009

2009

-201

0


Rapeseeds & Rape Oil Imports(thousand tonnes)

3 014 12

213

2234

12 12 8 29 10 5

20 152

10

105

190

220

113

262

0

50

100

150

200

250

300

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2003

-200

420

04-2

005

2005

-200

620

06-2

007

2007

-200

820

08-2

009

2009

-201

0

Rape/Canola Oil Rape/Canola seeds

Ukraine rapeseeds

arrive in the scene


Palm Oil Imports(thousand tonnes)

244226 237

210

257

194 194

317

366399 386

450 440

588

435

523

420

510

0

100

200

300

400

500

600

700

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2003

-200

420

04-200

520

05-200

620

06-200

720

07-200

820

08-200

920

09-201

0


Total Oils & Oilseeds Imports(thousand tonnes)

744 689 763595

734579 590

704 757 794699 691

833

1341

8111015 1028

758572

222 237

579

797 770

1.028850

1.089

536

796996

1.265

16911510

19982092

1747

2610

3200

0

500

1.000

1.500

2.000

2.500

3.000

3.500

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



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%

Major Import Duties

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 : 930,000 tons

Margarine : 528,000 tons

Exports : 220,000 tons

Industrial : 88,000 tons

TOTAL : 1,766,000 tons

* Olive Oil excluded

Vegoils Suppy & Demand

383 407494 421 378

523429 438 516

582465

347446

1,0991,0981,1301,1311,0911,1541,253

1397

179616371660

1461

1766

0200400600800100012001400160018002000

1997

1998

1999

2000

2001

2002

-200

320

03-200

420

04-200

520

05-200

620

06-200

720

07-200

820

08-200

920

09-201

0

Total Supply Total Demand

� Crushing capacity: 5.0 mn tons

Utilisation : c. 75%

� Liquid Refining capacity: 2.0 mn tons


� Margarine capacity: 0.85 mn tons


Turkish Vegoil Production Capacity

Turkey Oilseeds Crush(thousand tonnes)

2343

2532 2593

2366

1948

2881 2815 28703040

3573

3262

2672

3253

0

500

1000

1500

2000

2500

3000

3500

4000

1997 1998 1999 2000 2001 2002-

2003

2003-

2004

2004-

2005

2005-

2006

2006-

2007

2007-

2008

2008-

2009

2009-

2010


GMO issue

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


$600

$700

$800

$900

$1,000

$1,100

$1,200

$1,300

$1,400

$1,500

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


Sun-Soyoil Price Delta 2009-11

Sunoil Price v Delta 2009-11

World Sunoil Imports

World Sunoil Usage

Sun Complex & Price Outlook

• 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 sole dedicated sunoil importers/users

in the world. However, Egypt opts for 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.

Facts

• Japanese earthquake/tsunami disaster is largely priced and there

will not be a fresh financial 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 no major weather problems with 2011 US soy or

corn crops.

• US/South American biodiesel mandates remain in force.

Assumptions

• There will be severe price volatility throughout 2011 with hedge-

fund activity and political unrest mainly in the Middle East &

North Africa.

• I predict, world grains & oilseeds prices to be firm for the rest of

the season, mainly due to lower corn ending stocks in the US.

• 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

the sunoil premium over soyoil , continue to be very low.

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.

Price Outlook

• 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

can see a price spike in August 2011.

• 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.

Conclusions

Turkey... Growing Market

for Vegoils & Fats

Faik Genç, AgriPro Limited

Black Sea Grain, Kiev, 13-14 April 2011

Thank you!

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