fortune by MohamedBouha

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   MALAYSIAN PALM OIL COUNCIL                                     KKDN PP 14669/05/2010 (024659)                               VOL: 2 2010

                                                                                                           MARKETING & MARKET
                                                                                                           DEVELOPMENT DIVISION
                                                population and economic growth of the
                                                                                                      DIRECTOR

    Sub-Sahara:                                 region.
                                                Malaysian palm oil exports to the region
                                                                                                       Wira Adam

                                                                                                      MANAGERS
                                                                                                                       wira@mpoc.org.my



    A Growing                                   have doubled from 517,000 MT in 2003 to
                                                1.1 million MT in 2009 and with the right
                                                                                                       Muhammad Kharibi Zainal Ariffin
                                                                                                                     kharibi@mpoc.org.my
                                                strategies and more marketing efforts, the             Kamal Wan Roz kamalwr@mpoc.org.my

      Market                                    figure is expected to rise further. Among
                                                major palm oil importers in the region are
                                                                                                      MARKET ANALYSTS
                                                                                                       Asia Pacific    Desmond Ng Kok Hooi
                                                Benin and Togo, which also serve as
    for Palm Oil                                transfer hubs to the Nigerian market.
                                                Other countries such as South Africa,
                                                                                                                       desmond@mpoc.org.my
                                                                                                                       Lim Teck Chaii
                                                                                                                       lim@mpoc.org.my
                                                                                                       South Asia      Fatimah Zaharah Md Nan
                                                Ghana,      Mauritania    and    Tanzania
                                                                                                                       fatimah@mpoc.org.my
                                                continue to be the main destinations for               Middle-East     Mohamad Suhaili Hambali
AFRICA for a long time has been
                                                MPO exports.                                                           msuhaili@mpoc.org.my
regarded by many as “a dark continent”
                                                                                                       Africa          Nor Iskahar Nordin
with very little progress and little            Malaysia can leverage on its image as a                                iskahar@mpoc.org.my
economic prospects. This perception is          reputable palm oil supplier to make                    Europe          Azriyah Azian
fast eroding, with the veil of secrecy and      further inroads in the quantity and market                             azriyah@mpoc.org.my

isolation lifted and foreign investors and      share of palm oil exports to Sub-Saharan               Americas        Ahmad Fadzli Abdul Aziz
                                                                                                                       fadzli@mpoc.org.my
traders being welcomed with open arms.          Africa.     Carrying    out     tailor-made
Sub-Sahara represents a region that             promotions in the region and providing                     For more information, please contact
                                                the right information can play a vital role           Tel : 603 - 7806 4097 Fax: 603 - 7806 2272
offers a huge land area, plenty of
resources, competitive labour manpower          in generating awareness of the
and is not burdened with protective trade       importance of palm oil to entice buying.           among the issues they cited for not doing
or restrictive environmental policies.          Others, such as technical collaboration,           business in the region were political and
                                                credit      assistance,       infrastructure       social instability, insufficient market
Sub-Saharan Africa covers 45 countries,
                                                development and quality awareness                  information and lack of infrastructure.
with a population estimated at 680 million
                                                programmes among the importers,                    However, developments in the past few
in 2009, and geographically divided into
                                                distributors and consumers could also              years have merited serious consideration
four     sub-regions:    Eastern      Africa,
                                                help to expand the palm oil market.                from Malaysian palm oil players. Companies
Southern Africa, Western Africa and
                                                Opportunity for growth                             from China, Europe, Indonesia and
Central Africa. Traditional governments of
                                                Not so long ago, Sub-Sahara did not attract        Singapore are investing          billions of
despots and military regimes dominated
the region in the past but with advancing       a lot of interest among industry players and                             Continued on page 7
communication, ease of travel and
borderless information, in addition to                                              Africa’s Oils and Fats Imports
higher expectations and demands of the
populations, new democratic governments                        4000
are emerging. A growing number of
                                                               3500
countries are now in a better economic
position for international trade and the                       3000
climate is very conducive for business.
                                                 ’000 Tonnes




                                                               2500
Oils and Fats Scenario
Over the years, Sub-Saharan oils and                           2000
fats imports have increased from 2.4
million metric tonnes in 2003 to 3.6 million                   1500
MT in 2008, with palm oil contributing to a
                                                               1000
major portion of that increase from, 1.5
million MT to 2.6 million MT during the                         500
corresponding period. In terms of
percentage, palm oil accounts for about                           0
                                                                        2003     2004       2005        2006           2007          2008
70% of the total oils and fats imported.
This phenomenal growth of palm oil can
be attributed to several factors; among
them its competitive price, increasing                                Palm Oil   Soyabean     Sunflower         Tallow & Grease       Others

                                                                                                                              MPOC FORTUNE
  MARKE T W at c h

                                             Up trend                                      shift further downwards to next support
                                                                                           level at RM2,400.
                                             resumes                                       However, the price of FCPO is being
                                             by Benny Lee                                  overbought in the short term, I expect the
                                             Chief Market Strategist                       price to pull back to the immediate
                                                                                           support level first before making its way
                                             NextView Group                                to the resistance level of RM2,800. If you
                                                                                           still remember, in December 2009, I
                                                                                           wrote about that chart pattern (triangle)
In my previous analysis and article on       However, the uptrend is supported by a
                                                                                           and in January 2010, the price was
crude palm oil price, I have mentioned       marginally lower volume. Average daily
                                                                                           forecast at RM3,100, the pattern target is
that more correction is expected and the     trading volume in January was 9,850
                                                                                           still on track, as long as it stays in the
price should only find support between       contracts while the daily average in
                                                                                           uptrend channel. Recently, the target was
RM2,350 and RM2,400 per metric tonne         February was 8,730 contracts. Open
                                                                                           strengthened      by    using    Fibonacci
if it does not break above the RM2,600       interests however have increased from a
                                                                                           expansion rules. I expect this target to be
resistance level. Price at that time of      daily average of 21,000 contracts in
                                                                                           achieved after six to nine months.
writing was RM2,520. The price went          January to 23,500 contracts in February.
above the resistance level and went up       This shows that traders are still bullishly
further to close at RM2,670 on the 5th of    holding on to their contracts.
March. I did not provide any upside                                                        Mr. Benny Lee is a private trader, trainer
                                             Momentum of price has been strongly
forecast at that time but from the uptrend                                                 and sought-after speaker in the financial
                                             bullish in the short-term. The RSI,
channel, the resistance level is RM2,800.                                                  market. He is the Chief Market Strategist
                                             Momentum and MACD indicators are
Now that the price is near the resistance                                                  for NextView Group. NextView Group is a
                                             above the middle level and are still
level of the channel, where is it heading                                                  group of companies in the Asian region
                                             increasing. There are no signs of any
next?
                                             weakness in the bullish momentum at this      that provides a leading real-time
The Palm Oil Conference (POC) is going       moment. The price volatility has declined     investment tool for both professional and
to be held in the next few days after this   marginally this month. The volatility         retail investors.
article is written, in Kuala Lumpur, and     measured by the 14-day Average true
this major event is going to set the         range indicator has fallen from RM52 to       NextView is also a leading Investor
direction for the palm oil industry. I       RM42. A smaller volatility means smaller      Education training provider. For
remembered in the forecast in New Delhi      trading range and less uncertainty.           more   information,   log   on   to
at MPOC’s POTS event in December that                                                      www.nextview.com.
                                             The price of FCPO is currently near the
prices are expected to increase, with
                                             resistance level of an immediate uptrend      The above analysis and commentary is
forecasts ranging from RM2,800 to
                                             channel with a support level at RM2,350       based on the writer’s personal opinion
RM3,200 because of the El-Nino dry
                                             and resistance at RM2,580. With this          towards the price of crude palm oil using
weather and replantating exercise. The
                                             strong short term momentum, there is a        technical analysis and should not be
price at that time was around RM2,500. I
                                             high chance of the price moving higher        construed as any form of investment
believe the forecast for POC this year
                                             near this resistance level of RM2,800 if      advice. The writer will not be responsible
would be about the same.
                                             the price does not fall below the             for any decision made from using the
Let’s take a look at some recent             immediate support level at RM2,550. If it     above article.
developments in the palm oil economy in      falls below RM2,550, then expect if to
Malaysia. Buying from large importing
countries like China, India and the
European Union slowed down in
February after large shipments in
January. According to cargo surveyor
SGS (Malaysia) Bhd, Malaysia's palm oil
exports in February fell 16% over
January’s export to 1.25 million tonnes.
Another surveyor, Intertek Agri Services,
put February’s export figure as 1.21
million tonnes, down 19% from January.
Increasing prices of other commodities
boosted market sentiment amid global
economic recovery. Crude oil price has
gone above US$80 a barrel and prices of
metals have increased sharply as well
recently.
The price of FCPO has risen 5.9% since
last month and based on the moving
averages, the correction is over and the
price is in an uptrend again. The shorter
term 30-day moving average, which has
been declining since mid-January, has
started to increase in mid-February. The
mid- and long-term 60- and 90-day
moving averages have been bullish since
                                                                   FCPO daily chart as at 5 March 2010.
September last year.
                                                         Charted by Benny Lee using NextView Advisor Professional

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          Ins g
M A RKE T In s igh t s
                                                            Table 1: Morocco Consumption of Oils and Fats (‘000 MT)
                                                                         2005         2006           2007          2008          2009
MOROCCO:                                       Soybean oil                445         431.2          451.6          418          409

A Huge Market                                  Sunflower oil
                                               Rapeseed oil
                                                                         48.5
                                                                          4.4
                                                                                       39.6
                                                                                       13.5
                                                                                                      48.6
                                                                                                      1.5
                                                                                                                     48
                                                                                                                      4
                                                                                                                                  59
                                                                                                                                   1

Waiting to be                                  Corn oil
                                               Olive oil
                                                                           0
                                                                         59.9
                                                                                        1.5
                                                                                        66
                                                                                                       1.5
                                                                                                      61.9
                                                                                                                      1
                                                                                                                     79
                                                                                                                                   1
                                                                                                                                  92

Tapped
                                               Palm oil                   7.5           14            16.6            7            7
                                               Palm kernel oil            5.6           4.3             2             4            6
                                               Butter, as fat             30.4         30.3           19.6           29            24
OILS and fats consumption in Morocco           Fish oil                  11.1           8.7            8.1            4            4
reached some 613,000 metric tonnes in          Tallow &Grease             0.1          11.1           18.9           10           10
2009. Consumption has remained quite           TOTAL                     612.5        620.2          630.3         604.0          613
stable for the last five years, at around
612,000 to 630,000 MT a year, except for                    Table 2: Production of Oils and Fats in Morocco (‘000 MT)
2008 when it dropped to 604,000 MT.                                      2005         2006           2007          2008          2009
This was when most countries around the        Soybean oil               79.9          76            72.6           56            54
globe faced the economic downturn and          Sunflower oil              26          22.4           16.7           21            29
financial crisis. Morocco’s per capita         Rapeseed oil               4.3         14.3            0.6            5             0
consumption of oils and fats is fairly high
                                               Olive oil                 62.9          81            84.5           90            95
at 19.2kg per annum, which is close to
                                               Fish oil                  35.2         30.8           33.9           29             30
the world average of 23kg/person/year.
                                               TOTAL                     208.3        224.5          208.3          201           209
The market dominated by soybean oil
                                                               Table 3: Import of Oils and Fats by Morocco (‘000 MT)
makes up 409,000 MT or 67% of the total
oils and fats consumed in the country.                                   2005         2006           2007          2008         2009
Other oils and fats consumed in Morocco        Soybean oil               336.2        394.5          394.6         325.0        321.0
are olive oil at 92,000 MT (15%),              Sunflower oil              19.9         24.5           38.3          31.0         33.0
sunflower oil at 59,000 MT (10%) and           Rapeseed oil                 0          0.1              0             0            0
palm oil at 7,000 MT (1%), making              Corn oil                     0           1.5            1.5           1.0          1.0
Morocco a predominantly liquid oil
                                               Olive oil                   1.6          1.7            1.4           4.0          6.0
market. The country’s self-sufficiency in
                                               Palm oil                   11.7         16.1           18.5           8.0         14.0
edible oils and fats is only 34%; more
than 400,000 MT of oils and fats are           Palm kernel oil             5.6          4.3            2.0           4.0          6.0
imported annually, with soybean oil being      Butter, as fat             30.4         30.3           19.6          29.0         24.0
the major import. The country produces         Fish oil                     0            0              0             0            0
more than 200,000 MT of oils and fats          Tallow &Grease              0.1         11.1           18.9          10.0         10.0
annually; with olive oil production at         TOTAL                     405.5        484.1          494.8         412.0        415.0
95,000 tonnes (45%), followed by                                                 Source: Oil World
soybean oil at 54,000 MT (27%), fish oil
at 30,000 MT (14%) and sunflower oil at
                                                                                              5 Years Average imports of Palm oil
29,000 MT (14%).                              consumed by the Moroccans. The palm
                                                                                                (2004-08) - Tonnes, Percentage
                                              oil market in Morocco is currently
Soybean oil is the major oil imported, at     dominated by Indonesian palm oil at
321,000 MT or 77% of the total oils and       72%, sourced from a company that has
fats imported in 2009. Compared with the      logistic advantages and facilities in
other major oils imported by Morocco,         Indonesia.
palm oil is relatively small, at less than
14,000 MT or about 3.4% of the total          According to the statistics released by
market share.                                 MPOB, Malaysian palm oil exports to
                                              Morocco in 2009 were valued at RM6.2
Palm Oil Situation
                                              million, with 1,928 MT shipped to the
Most of the palm oil imported by Morocco
                                              country. Besides palm oil, other palm
is in hydrogenated form and it goes into
                                              products that have gained some access
the manufacturing of solid fats, largely
                                              into Morocco are palm kernel oil at 1,490                 Indonesia 10,880 - 72%
margarine and shortening, while palm
                                              MT (valued at RM5.1 million), 674 MT of
stearin    mainly     goes   into   soap                                                                Malaysia 3,800 - 25%
                                              oleochemical products valued at RM2
manufacturing. No palm oil or palm olein                                                                Others      420     - 3%
                                              million and finished products such as
is imported for the frying or cooking
                                              shortening, vegetable fats and coating
market since the liquid oil market is                                                                   Source: Oil World
                                              fats at 1,330 MT.
dominated by the soft oils traditionally
                                                                                                                 Continued on page 9

                                                                                                             MPOC FORTUNE •  5
          Ins g
M A RKE T In s igh t s


Japan’s Personal Care Products:
Oleochemical Usage Growing
JAPAN’s personal care products market           alkylethersulphate     is   preferred   by
has the potential for high sales growth, as     Japanese producers who consider it to be            Surfactants commonly used
its annual per head expense is 50 euros         milder to the hair and skin. In the United            in the shampoo markets
(RM226.70), much higher than in Europe,         States, manufacturers use aklysulfate as                  of Japan and USA
where it averages 15 euros. High                the raw material as it produces more foam.      Japan
expenditure is very much linked to
                                                The main distribution channels for sham-
widespread belief that it is cheaper to
                                                poos are drugstores and supermarkets. A
prevent skin and hair problems while
                                                small quantity is sold at convenient stores
young, rather than to fix them later in life.
                                                catering mainly to male shoppers. There
Examining the sale of personal care
                                                are close to 30 brands of shampoo sold in
products by category, skin and hair care
products increased by 1.5% a year from          Japan, excluding private labels. However,
2005 to 2008, and fragrance by 0.7%,            there are only five major players – Nippon
compared with the previous year.                Lever BV, Shiseido Co Ltd, Kanebo Ltd,
Fragrance sales are quite stable, for the       Kao Corporation and Procter and Gamble
product is used to demonstrate wealth           Far East Ltd – which collectively                     Alkyethersulfate          51%
and nobility.                                   command more than 90% of the market.                  Alkylsulphate              6%
                                                Except for Shiseido, all the other players
                                                                                                      Acid alkanolamide         10%
                  Sales of hair care, skin care and perfumes (Billion Yen)
                                                                                                      Alkylamidopropylbetaine 8%
                              2005          2006        2007           2008      2009E                Others                    25%
  Hair care                  1210.5        1230.1      1250.2         1268.8     1286.5
  Fragrances                  62.2           62.5        62.9           63.5       64.2         USA
  Skin care                  1,485.1       1,536.1     1,579.0        1,613.5    1,639.2

                           Sale of hair-care products (Billion Yen)
                              2005          2006        2007           2008       2009E
  Shampoo                    188.5         192.7       196.7          200.3       203.3
  Conditioner                169.8         176.6       182.3          187.4       190.2
  Styling agents             136.2         138.6       141.7          144.9       148.7
  Perms and relaxants          6.8           6.7         6.5            6.4         6.3
  Colourants                   86           82.2        79.3           76.0        75.4               Alkylsulphate            57%
  Others                     623.2         633.3        643.7          653.8       662.6              Alkyethersulfate         24%
  Total                      1210.5        1230.1      1250.2         1268.8      1286.5
                                                                                                      Others                   19%
Hair care products                              target the mass market. Shiseido
Among hair care products, market growth         products cater mainly to high income
                                                consumers.                                    hair repair, to make the hair soft, improve
was      registered    for     shampoos,
                                                                                              its finished appearance and give a feeling
conditioners and styling agents. Colour         The market for private labels is small as     that the hair is healthier after treatment.
treatment and hair manicure, which is a         consumers are willing to pay more for         The majority of the conditioners are for
new category product of semi-permanent
                                                branded items. The success of these           straightening the hair, repairing hair with
hair dyes, has reduced the use of hair
                                                companies is attributable in part to adver-   split ends and a “cure” for those with dry
colourants. Hair perm and relaxant
                                                tising campaigns featuring well-known         hair problem. The rise in hair treatments
products are used in small quantities as
                                                actresses with long hair. For example,        is increasing as a result of increased
many Japanese are of the opinion that
                                                Kao Corp uses Zhang Ziyi, a famous            consciousness on hair damage and the
perming will cause hair damage and
                                                Chinese actress who has long black hair,      rise in the number of people keeping
breakage.      Shampoos       and      hair
                                                to promote its Asience shampoo brand. In      longer hair. The figure below provides
conditioners are the major products in this
                                                view of the high cost of brand research,      estimates of the types and volumes of
category.
                                                development and promotion, industry           major surfactants and fatty alcohols used
Surfactants used to produce shampoos            growth is concentrated on brand exten-        for hair conditioners.
are all oleo derivatives, from fatty acids      sion, rather than on the launching of new     Monotallow trimethylammonium chloride
and fatty alcohols originating from coconut     brands.                                       (MMTAC) functions as a rinsing agent.
oil and palm kernel oil. Globally,
                                                Hair Conditioner                              Djtallowdimethylammonium          chloride
alkylethersulphate and aklysulfate are the
                                                Unlike shampoos that focus on cleansing,      (DTDAC) is included for the wet feel and it
primary raw materials for the production of
shampoos. However,                              hair conditioners are touted as good for
                                                                                                               Continued on page 11

6 •  MPOC FORTUNE
            ns
 MAR K ET I n s i g h t s

     Continued from page 1



   Sub-Sahara:
A Growing Market
   for Palm Oil
dollars, both in the agricultural and
industrial sectors. Only a few Malaysian
companies are involved and the region
needs further investments from Malaysia
as we have the expertise and technical
advantage, especially in oil palm
plantations and the related downstream
activities.
While most economies in the world have
reached maturity or are on their way to
reaching that stage, Sub-Sahara remains
one of the few regions where the full
potential to be is yet realised. The
rewards may be tremendous for                                                 Malaysian Palm Oil Exports to Sub-Sahara (’000)
Malaysian palm oil players who are willing
to venture into this untapped market.
                                                   1400
According to the African Development
Bank, the region’s gross domestic                  1200
product is projected to grow by up to 6%           1000
in 2010 and unlike the other parts of the              800
world, will continue experiencing strong               600
growth in the coming years. The regions’s
close to 700 million people and low per                400
capita consumption of edible oils and fats,            200
at 10.7kg compared with the world                        0
                                                               2003      2004        2005       2006      2007        2008       2009
average of 23.7kg in 2008, are basic
indicators and should provide enough                                                             MPOC is continuously looking for niche
                                                 consumption of 6.3 million MT and this
incentives for Malaysian companies to                                                            areas for Malaysian exporters to expand
                                                 year, domestic demand is projected to
expand their market base in the lucrative                                                        their market base and to provide outlets
                                                 grow to 6.7 million tonnes while local
edible oil industry.                                                                             to cater to the increasing demand for
                                                 production would notch to 3.7 million
The production of oils and fats in the           tonnes. The growth in vegetable oils and        palm oil in the Sub-Saharan region.
region at present is insufficient to cater to                                                    Recognising West Africa, with a
                                                 fats consumption in the region promises a
the growing demand for domestic                                                                  population of 350 million as one such
                                                 vast potential for palm oil and the time is
consumption. In 2008, local production                                                           market, MPOC has chosen to organise a
                                                 ripe to explore this market and reap its
could only make 55% of the domestic                                                              trade fair and seminar, scheduled for
                                                 rewards.
                                                                                                 November this year in Ghana, one of the
                                                                                                 most vibrant economies in West Africa.
             Sub-Sahara Africa Oils & Fats Production and Consumption (’000)                     Political stability and with a proven track
                                                                                                 record in implementing economic
  8000
                                                                                                 reforms, Ghana presents excellent
                                                                                                 opportunities for Malaysian companies to
  6000                                                                                           establish a strong base for marketing
                                                                                                 products to the local population, as well
  4000                                                                                           as serve as a gateway to the other
                                                                                                 countries in West Africa. Malaysian
  2000                                                                                           industry players should use POTS Ghana
                                                                                                 2010 as an avenue to explore
      0                                                                                          opportunities for investment in oil palm
            2004       2005        2006         2007         2008     2009F      2010F           plantations or oils and fats processing
                                                                                                 facilities.    Iskahar
                                 Production              Consumption


                                                                                                                   MPOC FORTUNE •  7
          ns
MARK ET I n s i g h t s

   Continued from page 5                       the cloudy nature during winter, is taken         also find a market in the country as
                                               up by the manufacturers in the cooking            animal food for cattle and poultry.
MOROCCO                                        and frying sector – and accepted by
                                                                                                 Conclusion
A Huge Market                                  consumers. In the solid fats sector, the
                                               uses of palm oil can also be expanded,            Morocco has a large market for oils and
                                                                                                 fats. The heavy reliance on imports, at an
Waiting to be Tapped                           since the market is now using mostly
                                               hydrogenated      soybean     oil     and         average of 400,000 MT a year, can be
Prior to 2009, the constraint facing palm      hydrogenated sunflower oil, which                 very attractive for the palm oil market.
oil and its products in getting a bigger       contain trans fatty acid and therefore            With the current improvement in its
market share was because of the                contribute to increased risk of heart             economic situation and the changes in its
discriminatorily high import duty. But in      disease. Palm oil will prove to be                import duty structure, Morocco has good
late 2008, the Moroccan government             technically and economically better than          potential to increase its current imports of
reduced the duty structure from 296% to        these hydrogenated oils.                          oils and fats, especially palm oil.

Table 4 : palm oil imports from Malaysia                                            Table 5: Import Tariff
                       2008        2009         Oils                           New Structure                        Old Structure
Palm oil               5,608       1,928                                    Crude        Refined                 Crude        Refined
Palm kernel            2,365       1,490        Soybean oil                  2.5           25.0                    46            49
Finished product        661         674         Sunflower oil                2.5           25.0                    30            32
Oleochemical           1,023       1,330        Palm oil                     2.5           25.0                   296           296
Palm Kernel Cake         0           0          Rapeseed oil                  2.5                25.0              45                49
TOTAL                  9,657       5,422        Corn Oil                      2.5                25.0              279              279
             Source: MPOB                       Palm kernel oil               2.5                25.0              296              296


2.5% for crude palm oil and 25% for            Since the major reduction in import duty          There is a large scope for the use of palm
refined palm oil. With this, imports of        last year, some Moroccan companies                oil and palm oil products in the Moroccan
palm oil by the country last year shot         have started to import palm oil, especially       market. Among the liquid oils, palm olein
                                               crude palm olein, refining and blending it        has good potential in the industrial frying
back to 14,000 MT, after a big drop to
                                               with sunflower and soybean oils in a ratio        sector. In the solid fats sector, the
only 8,000 MT in 2008. Generally, this
                                               of 70:30 (SFO,SO:Olein). With this                expansion of palm oil products is
new tariff supports the import of palm oil
                                               combination, the manufacturers have               inevitable as currently, most of the
and its derivatives by the country.
                                               better earnings, especially when the price        products in this sector use hydrogenated
Despite this increase, Malaysian palm oil      of palm oil and its products have larger          soybean oil and hydrogenated fish oil.
and its derivatives dropped to 5,422 MT        discounts compared with the other soft            Palm oil can therefore be promoted to be
in 2009 from 9,657 MT in 2008. This was        oils imported. According to local players,        scientifically and economically better
due to limits imposed on the export of         more companies plan to import crude and           than the other hydrogenated oils.
crude palm oil by Malaysia. There was no       refined palm oil in near future, with some        Consumption of palm oil by food
crude palm oil exported to Morocco in          of them refining the crude oil locally with       processors and food manufacturers can
                                               the facilities that are already in place.         grow to about 100,000 MT per year from
2009.
                                               Currently, the refining capacity for edible       about 20,000 MT now if its usage by
Penetrating and establishing the oils and                                                        these industries can be intensified.
                                               oils in Morocco is close to 900,000 MT
fats market in Morocco will remain a                                                             Furthermore, Morocco’s potential as a
                                               per annum. Nevertheless, only 75% of
challenging one for palm oil players. The                                                        centre for re-export will allow exports of
                                               the capacity is operational.
consumption of liquid soft oils such as                                                          these products to neighbouring countries,
soybean, sunflower and olive oils for          Statistically, the Moroccan market for            especially the West African nations.
domestic and industrial purposes has           butter is around 25,000 MT, margarine at
                                                                                                 Most vegetable oil processing plants in
been the practice in this country for          20,000 MT and vegetable oils at 360,000
                                                                                                 Morocco are not equipped to process
decades and the perference towards to          MT. Other local markets include 1.5
                                                                                                 palm oil. This is attributed to the fact that
these soft oils in for daily use prevails.     million MT of protein meal for animal feed
                                                                                                 the cost of processing soybean oil, or any
Shifting their consumption to palm oil will    and 40,000 MT for olive oil. The total
                                                                                                 other oil, is much lower than that for palm
require    an     aggressive    marketing      market for margarine, which is produced
                                                                                                 oil, after taking into consideration the cost
approach. Higher freight costs due long        from imported hydrogenated palm oil
                                                                                                 of freight and storage facilities.
shipping time and small quantities per         (HPO), in Morocco and western Africa is
                                               30-40,000 MT a year. Morocco is seen to           Therefore, plant operators in the country
shipment have further deteriorated the
                                               be a good re-export hub for margarine,            would require technical assistance from
price advantages of palm oil vis-à-vis
                                               especially to the European countries and          experienced Malaysian companies to
soybean oil imports from Argentina.
                                               to western Africa, including Senegal, Mali        work together with them. Other than that,
Nevertheless, with this new tariff in place,   and Mauritania. There is also the                 they also need to be facilitated in certain
there are huge opportunities for the use       possibility of a higher amount of palm            issues, including logistic arrangements of
of palm oil products in the Moroccan           kernel oil to be exported to Morocco as a         transporting palm oil from Malaysia and
market, especially if the blending of palm     result of the growing market for                  in the processing methodology and
oil with other soft oils, in order to reduce   oleochemicals. Palm kernel cake can               handling of palm oil.      Suhaili


                                                                                                                    MPOC FORTUNE •  9
           ns
M ARK ET I n s i g h t s


   Continued from page 6


Japan’s Personal Care Products:                                                                           products to add volume, thicken thinning
                                                                                                          hair, maintain colour, straighten curly hair,
Oleochemical Usage Growing                                                                                and more.
                                                                                                          Conclusion
                      Market share of major players and their brand (%)                                   Taking into consideration Japan’s
              Kanebo Resche                2.2                                                            growing population and affluence, the
  Kanebo
                     Kanebo                                                     9.8                       shampoo and hair conditioner market is
                    Shiseido       0.4                                                                    expected to increase by a compounded
                    Tessera        0.6                                                                    average growth rate (CAGR) of 3.5% a
                 Sea Breeze         1                                                                     year between 2010 and 2014. As market
 Shiseido
                  Super Mild                 3.4
                                                                                                          entry is difficult due to the high costs
                    Ausiese                             4.6
                                                                                                          involved, increased demands will benefit
                 FT Shisedo                                                        10.2
                       Dove                                         6.6                                   the existing players. Research into the
  Nippon
 Lever BV     Lux Super Rich                                                                   12.2       functionality of shampoos and hair
                    Success        1                                                                      conditioners to be sold probably plays the
                    Lavenus                            4.2                                                biggest role in the success of any player
    Kao            Essential                              5                                               in the market.
                    Asience                               5
                       Merit                                                 9.2                          With the use of shampoos in 2009 at
                                                                                                          159,999 MT and conditioners at 29,261
                               0       2         4            6        8      10          12      14      MT, oleochemical usage is envisaged to
                                                                                                          rise from 48,000 MT to 55,644 MT for
   Major surfactants and fatty alchohols                                                                  shampoos and from 8,478 MT to 10,070
                                                     It may look as though the hair conditioner
    used in producing hair conditioner               market is approaching maturity, as there             MT for conditioners in 2010. Based on
                 in Japan                            are many brands to choose from in                    research results gathered, oleochemicals
                                                     virtually every retail outlet. There are only        are used in 30% of the shampoos and
                                                     a few new developments unfolding,                    conditioners sold in Japan. To increase
                                                     intriguing consumers to loosen their purse           sales to this market, aggressive
                                                     strings and raise their standards to higher          marketing plans by Malaysian palm oil
                                                     priced,     premium         brands.     New,         players should focus on researches done
                                                     technologically improved formulations                on the functionality of oleochemicals for
                                                     reflect the ability to push up consumers’            shampoo and hair conditioner production.
                                                     expenditures as they look for daily care                Lim Teck Chaii



                                                                                      Popular Brands Of Hair Conditioners
                                                                           Brand                                              Brand owner
          Fatty alchohol 72%                             1        Mod's Hair Styling Air Spray                                Nippon Lever BV
                                                         2        Mod's Hair Control Treatment                                Nippon Lever BV
          Monotallow trimethyllammnium
                                                         3        Mod's Hair Moisture Finnish Treatment                       Nippon BV
          chloride 17%
                                                         4        Mod's Hair Kesaki Shuchu Treatment                          Nippon BV
          Djtallowdimethylammonium
                                                         5        Dove Moisture Deep Treatment                                Nippon Lever BV
          Chloride 4%
                                                         6        VO5 Pf t The Straight Treatment                             Sunstar Inc
          Others 7%
                                                         7        VO5 Pf t The Straight Essence                               Sunstar Inc
                                                         8        Tusbaki chan no kaimi shitton biyoski                       Yanagiya Honteri
has the feature of fluffing the hair after
drying. MMTAC and DTDAC originate                                          Estimated shampoo and conditioner sales in Japan (MT)
from beef tallow. Research by K.
                                                                                 2009           2010F     2011F       2012F       2013F       2014F
Yoshimura shows that palm-based
derivatives are now being used                         Shampoo                 159,999         164,799   169,743     174,835     180,080     185,483
interchangeably with MMTAC and                         Hair conditioner         28,261          29,250    30,274      31,333      32,430      33,565
DTDAC for hair conditioner production.
                                                                                          Estimated oleochemical used (MT)
The       higher    biodegradability    of
palm-based derivatives has drawn                       Shampoo                 48,000          49,440    50,923       52,451      54,024      55,645
interest in the market as they break down              Hair conditioner         8,478           8,775     9,082        9,400       9,729      10,070
naturally in the environment.


                                                                                                                              MPOC FORTUNE •  11
                                                                MPOC
                                                                Offices
                                                               Worldwide
                                                               Malaysian Palm Oil Council (MPOC)
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                                                               Tel:      603-7806 4097
                                                               Fax:      603-7806 2272
                                                               www.mpoc.org.my
                                                               American Palm Oil Council
                                                               Suite # 690, 21515 Hawthorne Blvd.
                                                               Torrance CA 90503, USA
                                                               Tel:     +1 (310) 944 3910
                                                               Fax:     +1 (310) 944 3544
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                                                               E-mail: kassim@americanpalmoil.com
                                                               Contact: Mohd Salleh Kassim
                                                               MPOC Africa Regional Office
                                                               5 Nollsworth Crescent, Nollsworth Park
                                                               La Lucia Ridge Office Estate,
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                                                               E-mail: kumar@mpoc.org.za
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                                                               M.E.C.C. 4301, South Africa
                                                               Contact: Uthaya Kumar
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                                                               7th Floor, Amin Court Building,
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                                                               Tel:     +88 (02) 9571 216
                                                               Fax:     +88 (02) 9551 836
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                                                               Contact: Fakhrul Alam
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                                                               Shanghai Westgate Mall Co. Ltd.
                                                               Room 1610B, 1038 Nanjing Rd. (w)
                                                               Shanghai 200041, P. R. China
                                                               Tel:     +86 (21) 6218 2085 / 6218 2513
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                                                               Contact: Teah Yau Kun
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                                                               Main Boulevard Gulberg, 111 Lahore, Pakistan
                                                               Tel:     +92 (42) 5716 600 / 5716 601
                                                               Fax:     +92 (42) 5716 602
                                                               E-mail: faisal@mpoc.org.pk
                                                               Contact: Faisal Iqbal
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                                                               S-4, New Mahavir Building, Cumballa Hill Road Kemps
                                                               Corner, Mumbai 400 036
                                                               Tel:     +91 (22) 6655 0755 / 6655 0756
                                                               Fax:     +91 (22) 6655 0757
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                                                               Contact: Bhavna Shah
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                                                               31 Avenue Emile Vendervelde
                                                               1200 Brussels Belgium
                                                               Tel:     +32 (2) 7748 860
                                                               Fax:     +32 (2) 7794 371
                                                               E-mail: zainuddin@skynet.be
                                                               Contact: Zainuddin Hassan
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                                                               Zone No.6, 11371 Cairo, Egypt
                                                               Tel:     +20 (2) 2273 8108
                                                               Fax      +20 (2) 2273 8106
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                                                               Contact: Kamal Azmi
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