edible oils conference
8 What'sNewS Issue 9* September 1998
Niche products
Cost efficiency
Growing efficiency
Menage a trois
Natural input from Unilever's
Harry Jongeneelen
food processing. The bean
industry, which uses
hydrogenation in some of its
processes, has responded by
experimenting with a
genetically modified high oleic
soybean that also does not
require this treatment.
Growing quality and health
consciousness are clearly
important factors in mature
markets, such as Europe and
North America. These factors
lead to shifts in the type of
edible oils consumed.
Furthermore, consumers have
become more critical with
respect to food safety, they
demand improved product
traceability through the value
chain, and at the same time
want higher food quality.
Many argue this will create an
industry environment where
demand is decommoditized
and realigned, with specific
need for a new framework in
the future which reflects more
realistically the environment in
which all three interact. While
bulk will continue to play a
major role, he is also
predicting the evolution of
Merging market expertise from
Raibobank's Willem Cramer
commodity processors into
producers of tailored products
and services aimed at specific
customers; traders, he believes,
will have to develop into
logistical partners and service
organizations; the old-style
end users will also undergo a
transformation and become
customers, clients.
In essence, he is describing the
decommoditization forecast in
FAR's study. According to
Heieen Glaudemans, one of
the study's authors, increasing
decommoditization is also
linked to consolidation of the
production chain. 'That
consolidation,' she said, 'is a
direct result of liberalization of
trade policies. Ongoing
liberalizaton and deregulation
will have significant impact on
trade flows, including greater
trade concentration. Prospects
are best for players in regions
with a mature industry and
where oilseeds are produced in
abundance at competitive
prices and where crushing
costs are low. In many regions,
crushing capacity is growing
and the trend is towards local
Client networking, FAR's Heieen Glaudemans and Yvonne Dom (right)
with Brazilian Agro Palma's Harald Brunckhorst
evoked questions from the
floor (see also page 9 sidebar
on crushing). The trend
towards dominance of the
crushing sector by
multinationals prompted a
chain from the 1980s through
to the next century. In what he
described as the industry's
menage a trois, the triangle
between processors, traders
and consumers, he saw the
niche products, markets and
value chains taking over from
bulk. This diversification is
linked to rapid developments
in biotechnology. As more
GMOs are used to achieve
specific traits in the end
product, the need for
separation from conventional
outputs will become crucial for
offset in some markets -
already edible oil tankers are
being fitted with separations to
carry more finished and semi-
finished manufactures.
Presentations on origination
and production in specific
countries, some of which
heralded the emergence of
processing plants with ever
bigger crushing capacity,
question on the potential life
expectancy of smaller players.
In response, Decio
Zylbersztain of the University
of Sao Paulo, said he believed
the industry would see new
kinds of partnerships
emerging as the industry
consolidates in response to
changing market
circumstances. 'We are more
interested in efficiency,' he
said, 'rather than worrying
about ownership. Especially in
Brazil, where we have huge
potential, we should see major
increases in efficiency
following privatization, but
we'11 welcome all forms of
investment capital - whether
the source is national or
multinational.'
If this shift to bigger and
bigger bulk processing plants
appears at odds with the
concept of boutique and niche
production, then speakers like
Diego Barbero see no
contradication. His
presentation analyzed the
evolution of the whole oilseeds
