The European oil and fats consumption
With 743 million souls the European continent represents 9.83% of the world’s population. But in this bulletin we only take in account the 28 member states of the European Union (EU-28) with 513 million consumers. They are major importers and consumers of oilseeds and meal (the dry residu after extraction of oil from e.g. soybeans) as well as major importers and consumers of oils & fats like palm oil. Although the European Union is the leading producer, consumer and exporter of olive oil (in the last five marketing years the EU produced 67%, consumed 55% and exported 67% of the world's olive oil), Europe depends on what happens in global markets. So in their daily life the oils & fats buyers are also risk managers dealing with geopolitics, global weather, climate change, global economics, currency risks and much more. One third of our oils & fats consumption is imported and we also import soybeans, rapeseeds, sunflowerseeds, linseeds and peanuts from third countries to extract the oil. The oil buyer operates in a global environment.
Lipids (oils & fats) are a significant part of of all living organisms and play a key role in their metabolism and structure. Our sources of fats and oils include vegetable oils, animal fats, and marine oils. In below table we do not give numbers about jojoba oils, avocado oil, camelina oil, wheat germ oil nor about walnut oil, hazelnut oil, cocoa butter… because there are nearly as many oils as there are living organisms. Gras for instance contains 4% oil under the form of waxes. But it is not always economically feasable to extract the oil from the living organism. The annual global production of jojoba oil, used in shampoo’s, is not even 15.000 tons while the production of palm oil is around 75.000.000 metric tons and we probably also miss some smaller country oil mills who bottle some crude organic oils etc.
Below we show the most important oils used in Europe.
Oils & fats are used for both food and nonfood applications. They are consumed via butter, margarine, salad oils, cooking or frying oils, as well as in animal feeds, cosmetics and personal care products, biodiesel, paints and coatings, lubricants and more. Globally food applications account for the major share but there is a continuing shift from food to nonfood consumption, particularly for biodiesel as a result of country mandates. Industrial applications of oils & fats has been around since ages. Just think of the olive oil lamp the Romans used, candles, the linseed oil in varnish, soaps and the oleochemical industry. In parts of Europe some windmills where lubricated with pork fat and bowling alleys are often lubricated with rapeseed oil.
According to FEDIOL, the “EU vegetable oil and protein meal industry association”, in 2017, less than 50% of our vegetable oil consumption was used for food: only 13.2 million MT! Thereof, only a minor part is sold for direct consumption by households. Oils & fats producers, mostly refiners, will sell in bulk to: packers, bottlers, household and industrial margarine producers, sauce producers (mayonnaise, dressings…), industrial fryers (frozen pre-fried potato products and chips or meat…), the baby food and dairy industry, chocolate, confectionary, bakery (biscuits etc) industry, ice cream industry and others like canners (e.g. sardines in olive oil), ready meals producers, etc
About 40% or 11 million MT were used for biodiesel and 5% or 1.5 million MT went to technical applications such as oleochemicals, pharma and cosmetics. Some 4% was used in animal feed and another 4% was used as direct energy (electricity). The biodiesel sector took 60% of all rapeseed oil and more than 50% of all imported palm oil and on top of that about 1.1 million tons of animal fat were used for biodiesel production (only 186.000 mt animal fats were used for human consumption, 575.000 mt for oleochemicals and about 950.000 mt went to animal feed including petfood). So political decisions on the use of biodiesel have crucial price determining influence on our markets! That is a good reason to follow the price evolutions of petroleum and gasoil.
In our next monthly bulletin we shall explore the amazing world of biodiesel. Untill then Aveno wishes you a great month of June!
Disclaimer
Unless otherwise mentioned the crude oil values quoted in these documents are prices landed in EU without import duties, handling, storage, financing, refining, packing, transport or any other cost related to bring the product to market. They are used as market trend illustration. Substitution of oils is possible but different oils have different fatty acid profiles and are not all interchangeable for all applications. One can make biodiesel from all oils and fats but one cannot make mayonnaise from coconut oil. This document is exclusively for you and does not carry any right of publication or disclosure. This document or any of its contents may not be distributed, reproduced, or used for any other purpose without the prior written consent of AVENO. The information reflects prevailing market conditions and our present judgement, which may be subject to change. It is based on public information and opinions which come from sources believed to be reliable; however, AVENO doesn’t guarantee the correctness or completeness. This document does not constitute an offer, invitation, or recommendation and may not be understood, as an advice. This document is one of a series of publications undertaken by AVENO and aims at informing broadly a targeted audience about the edible oils & fats market. AVENO’s goal is to keep this information timely and accurate however AVENO accepts no responsibility or liability whatsoever with regard to the given information.
