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Rabobank report: ‘Clear choices needed in Vegetable Oil Industry’


The European vegetable oil application industry has shown interesting profitability in recent years, averaging 8 percent and thus exceeding the averages of 4 percent seen in the oilseed crushing industry worldwide. Most EU industry participants have also reported growth in their sales in the past decade, Rabobank says in the recently published report ‘European Vegetable oil Applications’.

“The volumes of vegetable oil applications in the EU market have increased in the last four years in feed, oleochemical, and in several B2B food applications”, senior analyst Grains & Oilseeds Vito Martielli of Rabobank said. “The speed of growth has ranged from one percent to three percent per year.”

Consumer foods companies active in VOFA have to make clear choices: to divest VOFA assets in order to focus on their core consumer food business or to further invest in expanding in size or into adjacent businesses. Vito Martielli: “With the expansion option, there is a possibility of teaming up with EU VOFA manufacturers to further grow in emerging markets as these players have the know-how and experience in this business. All players should follow the demand drivers of sustainability and health, which are essential for this sector.”

Key consumer drivers like sustainability and health impact consumption and are critical for the demand for VOA in the next decade and thus also important for the response of VOA players. However, trends and market drivers are not the same across the various outlets and countries in the EU and also differ per vegetable oil.

Palm oil sustainability *) for instance, is a major driver in the European vegetable oil market. EU has become the most important region worldwide for the processing of sustainable palm oil, accounting for at least 38% of global CSPO (Certified Sustainable Palm Oil) sales. Sustainability is impacting all players and stages of the supply chain from palm plantations to plantations, crushing, trading, further processing, retailers, consumers, and institutions. Sourcing certified sustainable palm oil is the way forward in vegetable oil applications.

*) Rabobank only finances the sustainable palm oil supply chain and is helping to make sustainable palm oil the norm as soon as possible (please see Rabobank’s Palm Oil Sustainability Policy).

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