Oils and Fats in the Market Place
Following my post-graduate training with T.P. Hilditch in Liverpool in the mid-1940s, I regarded lipids as molecules to be analysed, identified and synthesised, and with physical and chemical properties that I could study. Since I lost research facilities and the assistance of research students, I have come to think of lipids also as commodities, which have to be grown, harvested, extracted, refined, and traded across national boundaries to meet demands for food and nonfood purposes. In these web pages there are many tables of figures with appropriate commentary. For the most part I will be concerned with the present, the previous ten years, and with occasional predictions for the next five years. However, my first Table covers a longer time span and shows how the supply of oils and fats has grown, particularly in the last 100 years. As we shall see, most of these supplies are used for human food so it is reasonable to take note of population changes, and Table 1 includes a per person figure expressed in kg/person/year. This is obtained by dividing world production (which is very close to total disappearance – i.e. usage for all purposes) by world population. This represents total usage covering food, feed, and requirements of the oleochemical industry including biodiesel. Until recently it was widely accepted that the ratio for these three purposes was 80:6:14 but with the demands from the biodiesel sector this is now better represented by figures such as 75:5:20. These figures relate to the 17 animal fats and vegetable oils covered by Oil World. Different ratios are produced based only on the nine vegetable oils covered in monthly reports from the US Department of Agriculture.
The first column (1909-13) relates to the years just before WW1 and the second (1936-39) to years after a serious world recession and immediately before WW2. The third column covers a time when the world was climbing out of the economic problems following WW2, and the final column is close to the present. The final two columns come from the same source (Oil World publications) and cover 17 commodity oils (see later). The earlier figures come from other sources and may cover a different range of commodities. The numbers therefore may not be strictly comparable but nevertheless the message is clear. There was a modest rise in production between the first and sixth decades of the 20th century, but because of the rise in population increase per person was from about 8 to 10 kg/person/year. However, the situation has been very different in the last 50 years. While population has doubled, production of oils and fats has increased fourfold so that the amount available per person has doubled. It will be useful to remember this framework as we look in more detail at present supply and demand.
Table 2 shows the availability of commodity oils and fats in the years when world population increased by successive billions. It is clear that as population has increased, the availability of oils and fats has increased more. In round figures when population increased from two to three billion oils and fats supply rose by 12 million tonnes. With successive billions of population oils and fats supplies rose by 16, 27, and 40 million tonnes (see Table). This increase is a consequence of three factors – a rise in area under cultivation (i.e. more land being used to grow trees and crops that produce oils and fats), a rise in average yields, and a rise in the proportion of the highest yielding source, viz. the oil palm.
In a lecture (2001), James Fry reviewed the world’s oil and fat needs in the 21st century based on lessons from the 20th century. Discussing trend rates for the period 1975-1999, he gave figures appearing in Table 3 below for increases in output divided between those resulting from an increase in area under cultivation and those from an increase in yield. These results have to be interpreted with care. For example, yields of rapeseed are greater in Europe than in Canada and both are greater than in India. The world average yield will depend on the proportions of total crop grown in these three areas. Producing more rapeseed in Europe will raise the world average yield without changing the yields in any of these areas. It is clear that over this time period the large increase in palm output was due mainly to new plantations and hardly at all to higher yield.