Soybean is the world's second most consumed oil. © United Soybean Board/Flickr
The global outlook for fats and oils remains “positive” in spite of the requirement for US manufacturers to phase them out of their products, according to research company IHS.
In June, the US Food and Drug Administration (FDA) revoked the “generally recognised as safe” status of partially hydrogenated oils (PHO), meaning American food companies are having to replace them with healthier alternatives in time for June 2018.
“The FDA announcement was not a surprise to anyone in the food or agricultural industries,” said IHS Chemical principal analyst, renewables and nutrition Rita Wu. “Following a global trend, the trans-fat content of many processed foods has been decreasing for years as suppliers of PHOs, notably partially hydrogenated soybean oils –and their customers in the food processing industry have already started the shift to healthier alternatives. Soybean farmers, for instance, are increasing their production of high-oleic soybeans, since oils from these soybeans have the desirable attributes of PHOs, namely resistance to rancidity, without their health issues.”
Despite reduced demand for PHOs, the outlook for the fats and oils market remains positive, IHS said. Few agricultural products surpass fats and oils in utility and ubiquity, Wu said, and they are an “essential ingredient” for both food and non-food applications.
“Worldwide consumption of fats and oils is expected to grow at an average annual rate of 2% to 3% during the next five years,” Wu said. “The Asia Pacific region, which is already the largest consuming region, will drive demand growth. In China, food uses will be the engine of consumption growth, while biodiesel production will propel demand in Indonesia. Palm oil and soybean oil, which are already the largest consumed oils, will continue to drive growth. Sunflower oil, canola oil and palm kernel oil will also see above-average growth.”
The Asia Pacific region accounts for more than half of global fats and oils production, said the IHS report. Indonesia and Malaysia are responsible for almost 90% of global palm oil and palm kernel oil output, while China is the world’s largest producer of soybean oil, canola/rapeseed oil, animal fats, cottonseed oil and peanut oil, according to IHS. The United States, India and France follow China in terms of production of animal fats (butter, lard, tallow and grease), while Germany, Canada, India and France follow China in production of canola and rapeseed oils. China and India lead global production of cottonseed and peanut oils.
The Philippines and Indonesia lead the world in coconut oil production, while the US is the clear winner in terms of corn oil production. Spain and Italy are obvious leaders of olive oil production. China, the US, Brazil and Argentina are the largest producers of soybean oil, and the Ukraine, Russia and Argentina produce the most sunflower oil globally.
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