Global Palm Oil Category - Procurement Market Intelligence Report

This procurement report offers key insights on the best practices for supplier selection and the strategies for category management.

  • Published: Sep 2017
  • Pages: 95
  • SKU: IRCMSTR14544
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Key Features of Report

 

Supply Market Insights
Procurement Best Practices
Cost Saving Opportunities
Pricing Models
Negotiation Strategies
Category Risk Analysis
Key Supplier Analysis
Supplier Capability Matrix

 

Palm Oil - Category Spend Analysis

 

According to analysts at SpendEdge, palm oil has become increasingly popular among food companies due to its economical nature and cost-effectiveness when compared to other vegetable oils. This can be attributed to the production process of palm oil, which involves simple steaming and pressing with relatively limited use of expensive solvents for extraction compared with other vegetable oils.  The use of palm oil as a refined oil requires only mild additional processing compared with full refining required in case of other oils, lowering the overall production costs of palm oil.

Additionally, palm oil has a higher yield per hectare than other vegetable oils and is a perennial crop that is harvested year-round, ensuring the availability of palm fruit in bulk. This high productivity makes palm oil profitable at a price below that of other oils. For instance, palm oil produces ten times higher amount of oil per hectare compared with soybean, five times higher compared with rapeseed, and two times higher than coconut

Palm Oil - Procurement Best Practices

 

Buyers should gain greater visibility over the complete palm oil supply chain right from the direct suppliers to farms and plantations to ensure that there is no deforestation involved. They should also work with suppliers, academic experts, industry peers, and NGOs to promote reliable industry standards and practices for justifiable palm oil sourcing.

For instance, P&G, an important palm oil buyer, has laid down ground rules to ensure that they maintain a minimal carbon footprint. The buyer has established traceability of palm oil and palm kernel oil to supplier mills, ensured the submission of plans by suppliers to demonstrate no deforestation in the supply chains, and invested in and worked with small farmers with the aim of improving their farming practices.

Palm Oil - Procurement Challenges

 

According to this procurement research report, a major challenge faced by buyers in the palm oil market is the inadequate supply in seasonal and potentially volatile commodity markets. Seasonal volatility caused due to sudden weather changes such as hurricanes, tsunamis, floods, or drought are recurring in nature and increases price volatility of agricultural commodities, including palm oil. Such sudden weather changes affect crops and interrupt the supply of palm fruit in adequate amounts, extending the lead time between order and fulfillment of the order made for the procurement of palm oil and palm kernel oil. Extended lead time increases price risk as the purchase made during a particular period can have a significant influence on unit costs for a buyer and risk associated with perishability and quality of commodities.

 

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PART 1: CATEGORY AT A GLANCE

  • TAKEAWAY 01 | Market Overview
  • TAKEAWAY 02 | Demand and Supply Snapshot
  • TAKEAWAY 03 | Key Market Dynamics
  • TAKEAWAY 04 | Supply Market Highlights
  • TAKEAWAY 05 | Pricing Insights
  • TAKEAWAY 06 | Procurement Insights

PART 2:  SCOPE OF THE REPORT

  • Category Definition
  • Research Methodology

PART 3: MARKET INSIGHTS

  • Category Spend Analysis
  • Category Maturity by Regions
  • Demand-Supply Shifts
  • Regional Demand-Supply Snapshot
  • Market Developments
  • Regional Impact of Trends
  • Key Category Growth Drivers and Corresponding Regional Impacts
  • Major Category Growth Constraints and Corresponding Regional Impacts
  • Key Current Technological Innovations
  • Major Regulatory Frameworks
  • Strategic Sustainability Practices
  • Porter’s Five Forces
  • PESTLE Analysis

PART 4: SUPPLY MARKET INSIGHTS

  • Supplier Operational Capability Matrix
  • Other Prominent Suppliers by Region: Operational Capability Matrix
  • Supplier Functional Capability Matrix
  • Other Prominent Suppliers by Region: Functional Capability Matrix
  • Key Clients/Partners
  • Supplier Cost Breakup
  • Supplier Positioning Matrix

PART 5: PRICING INSIGHTS

  • Pricing Models Snapshot
  • Pricing Models – Pros and Cons
  • Indicative Pricing

PART 6: PROCUREMENT INSIGHTS

  • Major Category Requirements
  • Major Procurement Pain Points
  • Category Sourcing Evolution Matrix
  • Procurement Best Practices
  • Cost-saving Opportunities
  • Supplier Selection Criteria
  • Category Negotiation Strategies
  • SLA Terms
  • Supplier Evaluation Criteria
  • Category Risk Analysis

PART 7: TOP FIVE SUPPLIERS

  • Wilmar
  • Sime Darby
  • Golden Agri-Resources
  • Indofood Sukses Makmur
  • Kuala Lumpur Kepong

PART 8: APPENDIX

  • Glossary
  • Key Notes
  • About Us

Research Framework

SpendEdge presents a detailed picture of the market by way of study, synthesis, and summation of data from multiple sources. The analysts have presented the various facets of the market with a particular focus on identifying the key category influencers. The data thus presented is comprehensive, reliable, and the result of extensive research, both primary and secondary.

INFORMATION SOURCES

Primary research

  • Procurement heads
  • Category managers
  • Sourcing consortium professionals
  • Industry experts and thought leaders
  • Procurement managers
  • Category heads of suppliers
  • Client account heads/managers
  • Client and industry consultants

Secondary research

  • Industry journals and reports
  • Periodicals and new articles
  • Category webinars
  • Internal categiry playbooks
  • Industry and government websites on regulations and compliance
  • Internal databases
  • Industry blogs/thought leader briefings

DATA ANALYSIS

SpendEdge INSIGHTS

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