The total demand of fats and oils in 2008 is estimated to be around 165 Mton, whereof 83% stemmed from plant bases. The majority (125 Mton) has been used in food, only 9% was used by the chemical industry (e.g., coatings, additives, lubricants, pharmaceuticals, etc.) and 6% for feed. Already 9% arise from 3% in 2004 went into production of energy and biofuels . This was mainly due to increased use of rapeseed oil for biodiesel production. Fats and oils are large . volume commodity products that are primarily consumed domestically. However, international markets have become increasingly important to producers. Geographic climates that are favorable to certain agricultural species often determine whether a region has a supply excess or shortage.
Overall, the fats and oils industry is growing because of an increase in population and growing industrial uses. Soybean oil became the world. s predominant vegetable oil in less than two decades, as a result of the increasing demand for protein in feeding livestock and poultry. In the USA, soybean oil is the standard against which the majority of the other oils are priced. In the last 20 years, world production of both palm oil and canola oil has mounted rapidly. Southeast Asian countries continue to increase their acreage of palm trees and to replace older palm trees with higher-yielding tree varieties. In the northern climates, canola oil (low-erucic-acid, edible rapeseed oil) is being produced in greater quantities, especially in Canada, Europe and the USA.
Global fats and oils consumption is predicted to accelerate at an average annual rate of 4%, mainly due to growth in China and India. Also, demand for biofuels (mainly from rapeseed and palm oils) is expected to stimulate demand in Europe. This has an escalating effect on prices, as can be seen in Figure 12.5, where selected plant-based oil prices are compared with crude. Especially, since biofuels have a larger impact, prices are obviously coupled.
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