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February 2020
Food & Allied
Edible Oil Industry
Industry | Process Flow
Edible
Oilseed
Solvent
Extraction
Plant
Meal
Poultry
Feed Mill
Semi Refined
Oil
Physical
Refinery
Refined
Edible Oil
– Bulk
Packaging
Unit
Refined
Edible Oil
–
Packaged
Final
Consumer
Industry | Inputs and Outputs
• Input
• Edible Oilseed variants
• Soybean Seed
• Canola Seed
• Sunflower Seed
• Rapeseed/Mustard Seed
• Cottonseed
• Corn
• Output
• Edible Oil
• Semi-Refined/Crude
• Refined
• Vegetable Ghee
• Edible Oilseed Meal
Global Dynamics
Industry | Snapshot
Source: World Agriculture Outlook, USDA – FY19
FY19
• Global Oilseed
• Production | 597 MMT | Up by 3%
• Crushing | 489 MMT | Up by 1%
• Soybean and Rapeseed
• Imports | 167 MMT | Down by 5%
• Exports | 171 MMT | Down by 3%
• Global Oil
• Production | 203 MMT | Up by 2%
• Consumption | 200 MMT | Up by 4%
• Imports | 82 MMT | Up by 10%
• Export | 86 MMT | Up by 3%
• Palm Oil | principle driver in edible oil market
• Strong demand growth
• Limited growth in supply
• Consumption grew ~ 6 MMT
• Low palm oil prices
• In China | Import demand for all edible oils has accelerated
• Reduction in oilseed crush
• Lower demand for meals curbed local supplies
35
0
34
2
35
8
33
7
70 75
72
68
48
48 51 53
39 45
43
44
17
19
19
205
0 52
52
51
F Y 1 7 F Y 1 8 F Y 1 9 6 M F Y 2 0
PRODUCTION (MMT)
Soybean Seed Rapeseed Sunflower Seed Cottonseed Palm Kernel Others
14
4 15
3
14
6
14
8
16
15
14
15
2 2 3 21 1 1 10.1
0.1
0.1
0.13 3 3 3
F Y 1 7 F Y 1 8 F Y 1 9 6 M F Y 2 0
IMPORT (MMT)
Soybean Seed Rapeseed Sunflower Seed Cottonseed Palm Kernel Others
14
8
15
3
14
9
14
9
16
16
15
15
2 2 3 31 1 1 10.1
0.1
0.1
0.14 4 4 4
F Y 1 7 F Y 1 8 F Y 1 9 6 M F Y 2 0
EXPORT (MMT)
Soybean Seed Rapeseed Sunflower Seed Cottonseed Palm Kernel Others
28
8
29
5
29
8
30
3
67
69
67
66
43
44 46 49
29 34
34
34
17 19
19
2023
24
24
24
F Y 1 7 F Y 1 8 F Y 1 9 6 M F Y 2 0
CAPACITY CRUSHED (MMT)
Soybean Seed Rapeseed Sunflower Seed Cottonseed Palm Kernel Others
Industry | Edible Oilseed
Source: Oilseeds: World Market and Trade – USDA – Jan’20
Variant Wise View3
50
34
2
35
8
70 75
72
48
48 51
39 45
43
17
19
195
0 52
52
F Y 1 7 F Y 1 8 F Y 1 9
PRODUCTION (MMT)
Soybean Seed Rapeseed Sunflower Seed Cottonseed Palm Kernel Others
14
4 15
3
14
6
16
15
14
2 2 31 1 10.1
0.1
0.13 3 3
F Y 1 7 F Y 1 8 F Y 1 9
IMPORT (MMT)
Soybean Seed Rapeseed Sunflower Seed Cottonseed Palm Kernel Others
14
8
15
3
14
9
16
16
15
2 2 31 1 10.1
0.1
0.14 4 4
F Y 1 7 F Y 1 8 F Y 1 9
EXPORT (MMT)
Soybean Seed Rapeseed Sunflower Seed Cottonseed Palm Kernel Others
28
8
29
5
29
8
67
69
67
43
44 46
29 34
34
17 19
1923
24
24
F Y 1 7 F Y 1 8 F Y 1 9
CAPACITY CRUSHED (MMT)
Soybean Seed Rapeseed Sunflower Seed Cottonseed Palm Kernel Others
12
3
12
8
12
1
12
1
56 60
61
62
47
41 44 48
43 47
47 48
6 7 7 6
19
3
20
2
20
9
21
2
F Y 1 7 F Y 1 8 F Y 1 9 6 M F Y 2 0
CAPACITY CRUSHED (MMT)
China United States Argentina Brazil Pakistan Others
63
76
75 76
76
60
59
49 49
49
8
3
10
9 9
39
38
37
37
37
F Y 1 7 F Y 1 8 F Y 1 9 6 M F Y 2 0 F Y 2 0 - J A N
EXPORT (MMT)
Brazil United States Argentina Others
98 99
87 89
3 3 3 32 5 6 4
63 6
8 70 73
F Y 1 7 F Y 1 8 F Y 1 9 6 M F Y 2 0
IMPORT (MMT)
China Pakistan Argentina Others
12
7
13
1
13
1
10
811
8
12
6
12
2
12
8
60
43
61
58
55 60
60 63
21
5
22
2
22
3
21
9
F Y 1 7 F Y 1 8 F Y 1 9 6 M F Y 2 0
PRODUCTION (MMT)
United States Brazil Argentina China Others
Country Wise View
Source: Oilseeds: World Market and Trade – USDA – Jan’20
Industry | Edible Oilseed
12
7
13
1
13
1
11
8
12
6
12
2
60
43
61
55 60
60
21
5
22
2
22
3
F Y 1 7 F Y 1 8 F Y 1 9
PRODUCTION (MMT)
United States Brazil Argentina China Others
98 99
87
3 3 32 5 6
63 6
8 70
F Y 1 7 F Y 1 8 F Y 1 9
IMPORT (MMT)
China Pakistan Argentina Others
63
76
75 76
60
59
49 49
8
3
10
9
39
38
37
37
F Y 1 7 F Y 1 8 F Y 1 9 F Y 2 0 - J A N
EXPORT (MMT)
Brazil United States Argentina Others
12
3
12
8
12
1
56 60
61
47
41 44
43 47
47
6 7 7
19
3
20
2
20
9
F Y 1 7 F Y 1 8 F Y 1 9
CAPACITY CRUSHED (MMT)
China United States Argentina Brazil Pakistan Others
63
76
75
60
59
49
8
3
10
39
38
37
F Y 1 7 F Y 1 8 F Y 1 9
EXPORT (MMT)
Brazil United States Argentina Others
392 401 406
369 372
100
200
300
400
500
FY16 FY17 FY18 FY19 6MFY20
SOYBEAN OILSEED PRICE (US $/MT)
Price Trend
Source: World Bank – Commodity Price Data, Index Mundi
• Oilseed price index
• US – China trade dispute - bearish impact on soybean oilseed prices
Industry | Edible Oilseed
65
71 74 76
54 55 56 57
28 28 28 27
18 19 19 21
8 8 9 9
4 5 5 5
12 13 13 13
F Y 1 7 F Y 1 8 F Y 1 9 6 M F Y 2 0
PRODUCTION (MMT)
Palm Soybean Rapeseed Sunflower Palm Kernel Cottonseed Others
46 47
51 52
11
10 11 12
9 9 10
10
4 4 5 5
3 3 3 3
0.1
0.1
0.1
0.13 3 3 3
F Y 1 7 F Y 1 8 F Y 1 9 6 M F Y 2 0
IMPORT (MMT)
Palm Soybean Sunflower Rapeseed Palm Kernel Cottonseed Others
49
49
53 54
11
11 11 12
10
10 11 11
5 5 5 5
3 3 3 3
0.1
0.1
0.1
0.13 3 3 3
F Y 1 7 F Y 1 8 F Y 1 9 6 M F Y 2 0
EXPORT (MMT)
Palm Soybean Sunflower Rapeseed Palm Kernel Cottonseed Others
62 6
6
73 75
53 55 55 57
29
29
28
28
16 17 18 19
7 8 8 9
4 5 5 5
11 12 12 13
F Y 1 7 F Y 1 8 F Y 1 9 6 M F Y 2 0
CONSUMPTION (MMT)
Palm Soybean Rapeseed Sunflower Palm Kernel Cottonseed Others
Variant Wise View
Source: Oilseeds: World Market and Trade – USDA – Jan’20
Industry | Edible Oil6
5
71 7
4
54 55 56
28 28
28
18 19 19
8 8 9
4 5 5
12 13
13
F Y 1 7 F Y 1 8 F Y 1 9
PRODUCTION (MMT)
Palm Soybean Rapeseed Sunflower Palm Kernel Cottonseed Others
46 47
51
11
10 11
9 9 10
4 4 5
3 3 3
0.1
0.1
0.13 3 3
F Y 1 7 F Y 1 8 F Y 1 9
IMPORT (MMT)
Palm Soybean Sunflower Rapeseed Palm Kernel Cottonseed Others
49
49
53
11
11 11
10
10 11
5 5 5
3 3 3
0.1
0.1
0.13 3 3
F Y 1 7 F Y 1 8 F Y 1 9
EXPORT (MMT)
Palm Soybean Sunflower Rapeseed Palm Kernel Cottonseed Others
62 6
6
73
53 55 55
29
29
28
16 17 18
7 8 8
4 5 5
11 12 12
F Y 1 7 F Y 1 8 F Y 1 9
CONSUMPTION (MMT)
Palm Soybean Rapeseed Sunflower Palm Kernel Cottonseed Others
36 37 38 39
15 16 16 16
8 8 9 9
4 4 3 34 5 5 5
11
7 12
3 12
9
13
2
F Y 1 7 F Y 1 8 F Y 1 9 6 M F Y 2 0
CONSUMPTION (MMT)
China United States Brazil Argentina Pakistan Others
6 5 6 7 7
75
75 8
0 82
82
F Y 1 7 F Y 1 8 F Y 1 9 6 M F Y 2 0 F Y 2 0 - J AN
EXPORT (MMT)
Argentina Others
8 9
11 12
5 5 5 53 3 3 4
59
58 6
3 64
F Y 1 7 F Y 1 8 F Y 1 9 6 M F Y 2 0
IMPORT (MMT)
China United States Pakistan Others
27 28
26
26
11 12
12
12
10
9 10 10
9 10
9 10
13
2 14
0
14
5
14
8
PRODUCTION (MMT)
China United States Argentina Brazil Others
Country Wise View
Source: Oilseeds: World Market and Trade – USDA – Jan’20
Industry | Edible Oil
36 37 38
15 16 16
8 8 9
4 4 34 5 5
11
7 12
3 12
9
F Y 1 7 F Y 1 8 F Y 1 9
CONSUMPTION (MMT)
China United States Brazil Argentina Pakistan Others
6 5 6 7
75
75 8
0 82
F Y 1 7 F Y 1 8 F Y 1 9 F Y 2 0 - J A N
EXPORT (MMT)
Argentina Others
8 9
11
5 5 53 3 3
59
58 6
3
F Y 1 7 F Y 1 8 F Y 1 9
IMPORT (MMT)
China United States Pakistan Others
27 28
26
26
11 12
12 12
10
9 10 10
9 10
9 10
13
2 14
0
14
5
14
8
F Y 1 7 F Y 1 8 F Y 1 9 F Y 2 0 - J A N
PRODUCTION (MMT)
China United States Argentina Brazil Others
300
500
700
900
FY16 FY17 FY18 FY19 6MFY20
Price Trend (US $/MT)
Palm Rapeseed Soybean Sunflower
Price Trend
Source: World Bank – Commodity Price Data, Index Mundi
• Price index continued rising, gained 14.2%
• Palm Oil price has risen with output slowing and use rising
• Rapeseed Oil dimmer global outlook for supplies bolstering price
• Tight Soybean Oil supply led to price hike
Industry | Edible Oil
Local Dynamics
Industry | Snapshot
Source: Pakistan Economic Survey 2018-19, USDA – FY19
FY19
• Agriculture Sector
• Growth | 0.85%, Target | 3.8%
• Other Crops | Oilseeds
• Share in agriculture value addition | 11.2%
• Share in GDP | 2.08%
• Growth | 1.95%
• Food Group
• Share in Import Bill | 10.5%, declined by 12%
• Imports | $ 4,261mln (FY18 ~ $ 4,730mln)
• Edible Oilseed
• Quantity | 3.3 MMT, (FY18 ~ 3.1MMT)
• Edible Oil
• Value | $ 1,454mln (FY18 ~ $ 1,654mln)
• Quantity | 3.3 MMT, (FY18 ~ 3.1MMT)
• Industry includes
• Refineries
• Ghee (hydrogenated oil)/Cooking oil plants
• Solvent Extraction Units
2,9
00
3,1
50
3,0
50
1,6
80
2,3
00
2,4
00
1,2
00
95
0
97
5
95
11
0
10
0
F Y 1 7 F Y 1 8 F Y 1 9
CAPACITY CRUSHED (MMT)
Cottonseed Soybean Rapeseed Sunflower
1,6
68
2,3
00
2,4
50
99
9
75
0
78
8
40
44
50
F Y 1 7 F Y 1 8 F Y 1 9
IMPORT (MMT)
Soybean Rapeseed Sunflower
3,3
18
3,5
52
3,3
36
20
0
22
5
22
5
75
90
75
2
2
2
F Y 1 7 F Y 1 8 F Y 1 9
PRODUCTION (MMT)
Cottonseed Rapeseed Sunflower Soybean
Industry | Edible Oilseed
Source: USDA – FY19
Variant Wise View
• Punjab Government’s oilseed promotion
initiative | growers will receive PKR 5,000
per acre subsidy for planting up to 10 acres
of sunflower.
• Federal Government | approved PKR
290bln for Agriculture sector development
• Includes production of oilseed crop
during the next five years.
44
5
48
4
46
8
44
5
48
4
46
8
38
44
40
30
0
40
5
42
3
F Y 1 7 F Y 1 8 F Y 1 9
PRODUCTION (MMT)
Cottonseed Rapeseed Sunflower Soybean
3,0
70
3,0
95
3,1
95
47
5
49
0
52
6
47
1
37
4
38
5
44
5
48
0
47
0
42
48
50
F Y 1 7 F Y 1 8 F Y 1 9
CONSUMPTION (MMT)
Palm Soybean Rapeseed Cottonseed Sunflower
3,0
75
3,0
25
3,2
00
20
5
90
10
0
1
4
5
F Y 1 7 F Y 1 8 F Y 1 9
IMPORT (MMT)
Palm Soybean Sunflower
44
5
48
4
46
8
44
5
48
4
46
8
30
0
40
5
42
3
38
44
40
F Y 1 7 F Y 1 8 F Y 1 9
PRODUCTION (MMT)
Cottonseed Rapeseed Soybean Sunflower Palm
Variant Wise View
Industry | Edible Oil
Source: USDA – FY19
• Dependence on imported oils
• Second biggest import after petroleum
• Produce | 31% vegetable oil domestically
• 13% | local oilseeds
• 18 % | imported oilseeds
• Production forecast | increase in local
oilseed production
143 146156
181
184 189 201
226
0
50
100
150
200
250
FY17 FY18 FY19 6MFY20
Price Trend (PKR/Litre)
Vegetable Ghee Edible Oil
Source: Pakistan Bureau of Statistics
Industry | Edible Oil
Price Trend
Regulatory Structure
Sources: Federal Excise Act (FY05 – Amended up to 01-Jul-19), Sales Tax Act (FY90 - Amended up to 01-Jul-19), Income Tax Ordinance 2001 updated upto
30-Jul-19 and Customs Act (FY69 - Amended up to 30-Jul-19)
OilseedCanola/Rapeseed
/SunflowerSoybean
Sales Tax 17% 10%
FED
Custom Duty
Additional Custom Duty
17%
3%
2%
FY18-19 FY19-20
FED (in sales tax mode) on
import of edible oils,
cooking oils and vegetable
ghee
Rs.1 per kg is the
rate of FED
17% Retail Price
(Brand or Non-
branded)
Import /Custom Duty: 5%
Additional Custom Duty 2% 7%
Sales Tax Exempt 17% on MRP
Soybean Meal 10% 10%
Inputs - Semi-Refined Oil
Output- Branded Oil & Desi Ghee
DISCLAIMERPACRA has used due care in preparation of this document. Our information has been obtained fromsources we consider to be reliable but its accuracy or completeness is not guaranteed. The informationin this document may be copied or otherwise reproduced, in whole or in part, provided the source isduly acknowledged. The presentation should not be relied upon as professional advice.
Analyst Faiqa Qamar
Contact Number: + 92 42 3586 9504
