Stronger yields in 2005 for vegetable oils

- Last updated on GMT

Supplies for a range of vegetable oils used extensively by the food
industry are likely to improve for 2004/05 year on stronger yields
for peanuts, soybeans and rapeseed oil.

Figures released from the US department of agriculture this week pitch global oilseed production for 2004/05 to reach a record 391.4 million tons, up 0.9 million tons from last month.

Global sunflowerseed production is set to hit 5.4 million tons, a rise of 0.3 million tons on December. World figures were boosted by Russia's sunflowerseed crop, jumping 400,000 tons to 4.8 million tons, reflecting increased harvested area.

Other oilseed production changes include a major lift in Indonesia's palm oil production, lifting 0.3 million tons to a record 11.8 million tons.

Rape seed, palm oil and soybean are all experiencing strong market growth as food makers continue to turn away from animal fats in favour of vegetable alternatives.

By 2008 analysts Business Communications Company predict these key vegetable edible oils will account for 69.9 per cent of the US market alone.

Today, soybean oil - together with palm oil - accounts for over half of all oil consumed in the world. Rape seed also enjoys a strong share of the market but in recent months supplies, and prices, have been severely impacted by a pulling of stocks from China and a dip in supplies due to poor harvests.

But health concerns are currently pushing the market for soybean oil further forward as ongoing research suggests soy not only lowers cholesterol, but can also have a preventative effect on breast cancer and other hormone-related cancers. Both the UK and the US have approved a health claim for soy.

Despite a lift in overall demand in the vegetable oil market, food makers are looking to slice any artery-clogging fats out of formulations. Their hunt for alternatives is driving a new market for zero of low trans fat vegetable oils.

Trans fats, which occur naturally in small amounts in dairy products and meat, are also formed artificially when manufacturers hydrogenate fat or oil, primarily to extend the shelf life of their products.

Research suggests that they raise LDL (bad) cholesterol levels, causing the arteries to become more rigid and clogged. An increase in LDL cholesterol levels can lead to heart disease.

The battle for market share in the growing zero trans fats oil marketplace is gathering pace. At the end of last year US firms Dow AgroSciences, Bunge and DuPont all launched their various brands of zero or low trans fats oil, joining ADM's NovoLipid, in a bid to tackle the growing market for alternatives.

A small US co-operative of 25 growers joined the large commercial players late last year, linking up with America's largest private firm Cargill to process its Asoyia brand oil made from 1 per cent linolenic soybeans.

Through the processing link with Cargill, Asoyia is looking to turn 6,000 acres worth of the soybeans into approximately 3 million pounds of Asoyia oil, multiplying - ambitiously - sixfold to 20 million pounds the following year.

Related topics: Market Trends, Fats & oils

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