Top Trends in the Global Oil Market
Oil is an essential commodity which can be broadly categorized into edible oils and non-edible oils. Non-edible oils are used in energy production, especially for biodiesel production. Oils that are not used for energy production is either meant for human consumption or benefits us in other ways. For instance, castor oil is widely used to […]
Oil is an essential commodity which can be broadly categorized into edible oils and non-edible oils. Non-edible oils are used in energy production, especially for biodiesel production. Oils that are not used for energy production is either meant for human consumption or benefits us in other ways. For instance, castor oil is widely used to relieve muscle soreness and joint pain. The edible oil category in itself is quite significant with a reported global production capacity of 177 million metric tons in the year 2016. (SpendEdge Procurement Market Intelligence Report – Global Edible Oils Market) Economic growth in developing nations and changing dietary habits along with increasing per capita income are expected to drive the growth of the oil market. Here are some of the latest trends gaining traction in following oil markets:
Olive oil market
- The importance of olive oil quality and certification has become important in recent times. Additionally, scrutiny of certification and classification, labeling and packaging have also become essential parameters for consideration.
- Fluctuations in demand and supply in olive oil are destabilizing the global prices. The analysis of more historic pricing data shows that the price has increased by more than 60% over the last five years.
- The rising awareness of health benefits of olive oil and easy availability is driving the consumption of olive oil in the global oil market. Change in dietary habits of end-consumers, especially towards reducing the use of oils and fats have driven the overall consumption.
Mentha oil market
- The increasing use of oral care products such as mouthwash and mouth sprays are urging the manufacturers to introduce new and different flavors. The use of menthol in various oral care products will result in higher demands for mentha oil.
- Over the last few years, it has been evident that consumers are trying to avoid chemical based products in favor of natural and organic products. This trend is positively influencing the natural oil market such as mentha oil.
- Tobacco consumers are shifting gradually towards flavored cigarettes, menthol being the most preferred one. In the US alone, the share of menthol cigarettes out of total cigarettes has increased from around 25% in 2001 to approximately 32% in 2013.
Sunflower oil market
- Sunflower oil suppliers are entering into contracts with farmers to provide them with agronomic services and crop inputs, and that will help in increasing farmer’s yields and maximize profitability. Such agreements ensure adequate and constant supply of sunflower oil without compromise on quality and grade.
- In a bid to expand their product portfolio, suppliers are focusing on launching new sunflower oil offerings including non-GMO product and sunflower oil spray.
- The increasing availability of non-GMO sunflower oil has helped food manufacturers and service operators to meet requirements of end-consumers for non-GMO-based products efficiently.
Coconut oil market
- Coconut oil buyers are focusing their efforts on shortening the copra supply chain by eliminating intermediaries and sourcing directly from farmers. Such strategic moves give them control over value chain, better traceability, and enhanced supply security.
- Consumers increasingly prefer branded coconut oil instead of unbranded and unpackaged products. To paint a picture for such shift, the share of Indian branded edible oil segment, including coconut oil, jumped to 60%-70% in 2016 from 30%-40% in 2011.
- Consumers preference for virgin coconut oil over other types of oil is on the rise as a result of growing awareness regarding the health benefits along with the growth of the middle-class population (end-consumers) that can afford costly products, including virgin coconut oil.
Soybean oil market
- Strict regulations regarding environmental protection in the soybean oil market is forcing the manufacturers to switch to eco-friendly hydraulic fluids for machinery and equipment. Buyers are feeling the heat of this as they may need to allocate specific costs for system flushing and maintenance of equipment.
- In the recent time, China has emerged as a dominating force in this market threatening the leading position of the US. According to industry estimates, in 2016, Chinese increased its soybean imports to about 85 MMT from close to 10 MMT in 2010.
Castor oil market
- Castor oil exports have experienced variation over the last few years due to various reasons such as supply shortage, unfavorable weather conditions, and lower acreage of castor seed in significant supply markets such as India.
- Castor oil is considered as one of the best vegetable oils to produce bio-diesel as it is soluble in alcohol and does not require a substantial amount of heat and energy needed to transform them into fuel. This makes them a suitable candidate to be used in biodiesel as an alternative