Global Vegetable Oils Market Trends:
Demand Analysis and Strategic Planning Initiatives
Yasutomo Kojima
Joe Parcell
Jewelwayne Cain
Department of Agricultural and Applied Economics
University of Missouri-Columbia
Introduction
Vegetable oils consumption, production and trade have become one of the global
topics of interest due to several factors:
(i) rising global demand for vegetable oils, especially in emerging economies
(ii) health problems related to trans fats (trans fatty acids: TFA)
(iii) increasing use of vegetable oils as biofuels feedstock along with crude oil
price surge
(iv) international concerns over the environmental impacts of palm logging
In these circumstances, in order to understand global vegetable oils market trends,
it has become essentially important to analyze global demand for vegetable oils
from the aspects of food use and industrial use, and to clarify the demand
structure of edible and non-edible vegetable oils.
The Objective of This Study
The objective of this paper is
to estimate demand function of vegetable oils for food use and industrial use
with cross-country panel data of 156 countries
to investigate global demand structure of edible and non-edible vegetable oils
to think about strategic planning initiatives
Previous Research (1)
Empirical analysis of food, biofuel and energy markets.
There are mainly three types of approaches, such as
1) Theoretical models
(Gardner 2007; de Gorter and Just 2008; de Gorter and Just 2009)
2) Cointegration analyses
(Yu et al. 2006; Hameed and Arshad 2008; Peri and Baldi 2010)
3) Partial and general equilibrium (CGE) models
(Arnt et al. 2008, Kancs and Wohlgemuch 2008)
4) Theoretical and empirical analysis
(Ciaian and Kancs 2011)
In order to empirically analyze vegetable oils market based on those theoretical
models, we need to estimate demand elasticities of vegetable oils from a global
perspective.
Currently, the USDA Economic Research Service (ERS) does not provide elasticity
estimates of vegetable oils to the public.
Previous Research (2)
From a regional perspective,
Goddard and Glance (1989) analyzed demand relationships among twelve fats
and oils in United States, Canada and Japan with data of per capita
disappearance from 1962-86.
Their study did not include rapeseed oil in the demand equation for the U.S. in
their model.
And also, they excluded sunflower oil in the model for three countries because
some data was unavailable over some or all of the estimation period.
Demand Analysis
We focus on global markets of four vegetable oils:
soybean oil, rapeseed oil, palm oil, sunflower oil
We estimate own- and cross-price elasticities in the global market and
identified income elasticities by geographic regions of Africa, America, Asia,
Europe and Oceania for food use and industrial use, respectively.
Edible: Food 52.6% in 2009
Non-Edible: Feed, Seed, Waste, Processing and Other Utilities 47.4% in 2009
Demand elasticity estimates will be useful for future research, such as policy
analysis related to the area of agriculture and energy.
Soybean Complex
Soybean
Soybean
Meal
Soybean
Oil
Rapeseed
Oil
Palm
Oil
Sunflower
Oil
Table 1. World Average of Edible Vegetable Oils
Consumption per Capita
Food supply quantity (kg/capita/yr)
1990-94
Average
Soybean Oil
2.78
Palm Oil
1.13
Rape and Mustard Oil
1.37
Sunflowerseed Oil
1.28
Groundnut Oil
0.75
Cottonseed Oil
0.60
Olive Oil
0.36
Coconut Oil
0.26
Maize Germ Oil
0.30
Oilcrops Oil, Other
0.22
Palmkernel Oil
0.12
Ricebran Oil
0.09
Sesameseed Oil
0.11
Vegetable Oils (Total)
9.35
Four Major Vegetable Oils
6.55
Source: FAOSTAT.
Share
29.7%
12.1%
14.6%
13.7%
8.0%
6.4%
3.8%
2.8%
3.2%
2.3%
1.3%
0.9%
1.2%
100.0%
70.0%
1995-2000
Average
2.89
1.36
1.42
1.33
0.74
0.55
0.37
0.25
0.32
0.24
0.12
0.10
0.11
9.80
7.01
Share
29.5%
13.9%
14.5%
13.6%
7.6%
5.6%
3.8%
2.5%
3.2%
2.5%
1.2%
1.0%
1.1%
100.0%
71.5%
2000-2004
Average
3.28
1.58
1.33
1.25
0.70
0.52
0.41
0.28
0.32
0.25
0.19
0.11
0.11
10.33
7.43
Share
31.7%
15.3%
12.9%
12.1%
6.8%
5.1%
4.0%
2.7%
3.1%
2.4%
1.9%
1.1%
1.1%
100.0%
72.0%
2005-2009
Average
3.37
1.91
1.44
1.29
0.66
0.56
0.43
0.32
0.32
0.28
0.27
0.12
0.11
11.09
8.01
Share
30.4%
17.3%
13.0%
11.6%
6.0%
5.1%
3.9%
2.9%
2.9%
2.5%
2.4%
1.1%
1.0%
100.0%
72.2%
Table 2. Edible Vegetable Oils Consumption Share by Region
1990-2009 Average Consumption
Africa
America
Asia
Europe
Oceania
Eastern Africa
Middle Africa
Northern Africa
Southern Africa
Western Africa
Northern America
Central America
Caribbean
South America
Central Asia
Eastern Asia
Southern Asia
South-Eastern Asia
Western Asia
Eastern Europe
Northern Europe
Southern Europe
Western Europe
Australia and New Zealand
Melanesia
Micronesia
Polynesia
Total
HHI (Degree of Concentration)
Consumption Share: %
All Vegetable
Oils
1.8
0.6
2.7
0.9
4.6
13.0
2.2
0.5
7.5
0.9
18.8
17.9
5.2
4.0
5.4
2.4
5.6
5.4
0.7
0.0
0.0
0.0
100
1,077
Soybean Oil
0.8
0.3
2.5
0.6
0.6
31.7
3.2
1.1
15.8
0.2
17.5
10.5
3.2
2.0
1.7
1.7
2.7
4.0
0.2
0.0
0.0
0.0
100
1,731
Source: Own calculations based on FAOSTAT.
Rape and
Mustard Oil
0.3
0.1
1.5
0.0
0.4
9.1
1.2
0.3
0.1
38.0
25.7
0.2
0.2
4.9
7.6
1.2
7.9
1.4
0.0
0.0
100
2,338
Sunflowerseed
Oil
1.4
0.1
5.2
3.9
0.0
0.9
2.2
0.4
7.7
1.5
4.4
9.1
1.2
6.8
30.3
2.2
12.0
10.2
0.5
0.0
0.0
0.0
100
1,433
Palm Oil
Palmkernel Oil
4.3
1.7
0.7
0.3
12.6
0.1
2.8
0.7
6.3
19.4
25.1
12.3
6.3
1.0
1.5
1.1
2.8
1.1
0.0
0.0
100
1,440
1.1
1.1
1.6
1.5
37.7
2.4
0.3
0.0
4.3
4.5
1.5
32.0
4.9
0.4
1.4
1.0
4.1
0.0
0.0
100
2,544
Table 3. Change in Edible Vegetable Oils
Consumption Share from 1990s to 2000s
Africa
America
Asia
Europe
Oceania
Eastern Africa
Middle Africa
Northern Africa
Southern Africa
Western Africa
Northern America
Central America
Caribbean
South America
Central Asia
Eastern Asia
Southern Asia
South-Eastern Asia
Western Asia
Eastern Europe
Northern Europe
Southern Europe
Western Europe
Australia and New Zealand
Melanesia
Micronesia
Polynesia
All Vegetable
Oils
0.4
0.1
-0.5
0.1
0.5
-0.5
-0.2
0.0
0.2
-0.2
0.3
0.9
0.3
0.4
-0.1
-0.4
-0.9
-0.6
0.6
0.0
0.0
0.0
Soybean Oil
0.2
0.2
0.6
0.6
0.2
-4.6
-0.3
0.1
0.0
-0.1
3.7
1.0
0.0
0.2
0.2
-0.3
-0.5
-1.0
0.3
0.0
0.0
0.0
Sunflowerseed
Rape and
Oil
Mustard Oil
0.9
-0.3
-0.1
-0.1
-2.0
-1.5
0.0
0.0
0.0
-0.7
0.2
3.0
-2.6
0.8
-0.3
-1.1
0.0
1.0
0.0
-2.2
-4.1
0.3
2.0
1.0
0.0
0.9
0.0
4.8
-1.0
-0.5
0.2
0.3
-0.5
-0.9
1.2
0.6
1.0
0.0
0.0
0.0
0.0
0.0
Palmkernel Oil
Palm Oil
0.8
-0.3
-0.3
0.3
-3.5
-0.3
0.8
-0.3
0.0
1.9
7.8
-3.8
-0.3
0.5
-1.2
-0.6
-1.2
1.3
0.0
0.0
Source: Own calculations based on FAOSTAT.
Note. These data show the difference in consumption share (%) from 1990’s to 2000’s.
-0.5
-0.8
-0.5
-0.9
0.7
-3.7
0.2
0.0
-2.0
1.7
1.0
10.8
1.1
-0.1
0.0
-1.1
-5.7
0.0
0.0
-
Figure 1. World Average of Edible and Non-Edible
Vegetable Oils Consumption per Capita
Source: Own calculations based on FAOSTAT.
Table 4-1. Summary Statistics
Edible Vegetable Oils: Average Consumption Per Capita and Real Price
Non-Edible Vegetable Oils: Average Consumption Per Capita and Real Price
Cross-Country Data (156 Countries)
1990-2009
Consumption
(g/capita/year)
Real Price
($/t)
1990-1999
Consumption
(g/capita/year)
Real Price
($/t)
2000-2009
Consumption
(g/capita/year)
Real Price
($/t)
2000-2004
Consumption
(g/capita/year)
Real Price
($/t)
2005-2009
Consumption
(g/capita/year)
Real Price
($/t)
Cross-Country Data (156 Countries)
Variable
Soybean oil
Rapeseed oil
Plam oil
Sunflower oil
Soybean oil
Rapeseed oil
Plam oil
Sunflower oil
Obs
1,890
1,363
1,340
1,881
1,897
1,897
1,897
1,897
Mean Std. Dev.
3,068
3,529
1,927
3,038
2,430
2,376
2,217
3,122
935
563
1,164
734
868
580
1,136
638
Min
0.12
0.03
0.20
0.06
154
146
208
293
Max
23,160
17,978
10,902
16,221
5,732
5,995
5,844
5,974
1990-2009
Consumption
(g/capita/year)
Variable
Soybean oil
Rapeseed oil
Plam oil
Sunflower oil
Soybean oil
Rapeseed oil
Plam oil
Sunflower oil
Obs
739
543
536
739
742
742
742
742
Mean Std. Dev.
2,943
3,674
2,163
3,143
2,106
2,322
2,057
2,743
1,214
741
1,404
932
1,109
719
1,386
829
Min
0.12
0.11
0.20
0.06
262
146
225
362
Max
20,612
17,978
10,597
12,908
5,732
5,995
5,467
5,974
1990-1999
Consumption
(g/capita/year)
Variable
Soybean oil
Rapeseed oil
Plam oil
Sunflower oil
Soybean oil
Rapeseed oil
Plam oil
Sunflower oil
Obs
1,151
820
804
1,142
1,155
1,155
1,155
1,155
Mean Std. Dev.
3,148
3,431
1,770
2,958
2,646
2,388
2,320
3,342
756
295
1,009
517
713
398
976
401
Min
0.26
0.03
0.37
0.10
154
168
208
293
Max
23,160
15,490
10,902
16,221
3,843
4,387
5,844
4,201
2000-2009
Consumption
(g/capita/year)
Variable
Soybean oil
Rapeseed oil
Plam oil
Sunflower oil
Soybean oil
Rapeseed oil
Plam oil
Sunflower oil
Obs
559
404
390
553
560
560
560
560
Mean Std. Dev.
3,063
3,514
1,769
2,937
2,464
2,404
2,161
3,138
684
247
891
455
655
331
892
351
Min
3.95
0.03
0.37
0.15
154
168
259
293
Max
23,160
15,490
10,902
15,039
3,108
4,387
4,026
3,312
2000-2004
Consumption
(g/capita/year)
Variable
Soybean oil
Rapeseed oil
Plam oil
Sunflower oil
Soybean oil
Rapeseed oil
Plam oil
Sunflower oil
Obs
592
416
414
589
595
595
595
595
Mean Std. Dev.
3,228
3,351
1,771
2,981
2,817
2,363
2,469
3,519
824
320
1,120
546
767
446
1,055
429
Min
0.26
0.04
8.10
0.10
248
229
208
389
Max
20,943
15,030
9,630
16,221
3,843
4,000
5,844
4,201
2005-2009
Consumption
(g/capita/year)
Real Price
($/t or /kl)
Real Price
($/t or /kl)
Real Price
($/t or /kl)
Real Price
($/t or /kl)
Real Price
($/t or /kl)
Variable
Soybean oil
Rapeseed oil
Plam oil
Sunflower oil
Soybean oil
Rapeseed oil
Plam oil
Sunflower oil
Crude oil
Obs
934
1,049
1,447
778
1,794
1,794
1,794
1,794
1,794
Mean Std. Dev.
2,551
3,326
2,689
4,966
4,458
11,317
1,751
2,723
855
362
1,053
497
792
378
1,043
416
254
115
Min
Max
0.02
29,892
0.01
45,431
0.31 164,014
0.03
20,796
154
2,914
146
2,992
208
2,907
293
2,982
80
680
Variable
Soybean oil
Rapeseed oil
Plam oil
Sunflower oil
Soybean oil
Rapeseed oil
Plam oil
Sunflower oil
Crude oil
Obs
336
408
498
287
659
659
659
659
659
Mean Std. Dev.
2,160
2,961
1,796
2,909
3,035
7,865
1,334
2,132
1,041
424
1,175
542
962
436
1,180
454
171
68
Min
0.04
0.05
0.31
0.60
262
146
225
362
80
Variable
Soybean oil
Rapeseed oil
Plam oil
Sunflower oil
Soybean oil
Rapeseed oil
Plam oil
Sunflower oil
Crude oil
Obs
598
641
949
491
1,135
1,135
1,135
1,135
1,135
Mean Std. Dev.
2,770
3,498
3,257
5,846
5,205
12,701
1,995
2,990
747
267
982
454
693
298
964
369
302
109
Min
Max
0.02
29,892
0.01
45,431
1.15 164,014
0.03
20,796
154
2,914
168
2,940
208
2,866
293
2,891
151
610
Variable
Soybean oil
Rapeseed oil
Plam oil
Sunflower oil
Soybean oil
Rapeseed oil
Plam oil
Sunflower oil
Crude oil
Obs
301
310
456
225
555
555
555
555
555
Mean Std. Dev.
2,357
2,815
2,386
3,763
4,344
10,818
1,573
2,677
679
224
874
402
649
300
883
324
211
44
Min
Max
0.03
18,004
0.01
21,077
1.15 112,925
0.03
20,796
154
1,710
168
2,425
259
2,866
293
2,891
151
606
Variable
Soybean oil
Rapeseed oil
Plam oil
Sunflower oil
Soybean oil
Rapeseed oil
Plam oil
Sunflower oil
Crude oil
Obs
297
331
493
266
580
580
580
580
580
Mean Std. Dev.
3,189
4,037
4,073
7,186
6,000
14,187
2,352
3,192
813
287
1,084
478
736
290
1,041
393
389
77
Min
Max
0.02
29,892
0.19
45,431
8.38 164,014
0.88
19,194
248
2,914
229
2,940
208
2,762
389
2,750
189
610
Max
22,453
20,706
89,889
14,069
2,721
2,992
2,907
2,982
680
Table 4-2. Summary Statistics
Edible Vegetable Oils: Average Consumption Per Capita and Real Price
Non-Edible Vegetable
Cross-Country Data (156 Countries)
Edible
1990-2009
Consumption
(g/capita/year)
Max
23,160
17,978
10,902
16,221
5,732
5,995
5,844
5,974
1990-2009
Consumption
(g/capita/year)
Non-Edible
Average Consumption
PerStd.
Capita
1990-1999 Vegetable Oils:Variable
Obs
Mean
Dev. and Real
Min PriceMax
1990-1999
Consumption
(g/capita/year)
Real Price
($/t)
a and Real Price
Consumption
(g/capita/year)
6 Countries)
d. Dev.
3,529
3,038
2,376
3,122
563
734
580
638
Min
Max
Non-Edible
0.12
23,160
0.03
0.20
0.06
154
146
208
293
17,978
10,902
16,221
5,732
5,995
5,844
5,974
1990-2009
Real Price
Consumption
($/t)
(g/capita/year)
Real Price
($/t or /kl)
2000-2009
Consumption
(g/capita/year)
Variable
Soybean oil
Rapeseed oil
Plam oil
Sunflower oil
Soybean oil
Rapeseed oil
Plam oil
Sunflower oil
Obs
1,890
1,363
1,340
1,881
1,897
1,897
1,897
1,897
Mean Std. Dev.
3,068
3,529
1,927
3,038
2,430
2,376
2,217
3,122
935
563
1,164
734
868
580
1,136
638
Min
0.12
0.03
0.20
0.06
154
146
208
293
Soybean oil
739
2,943
3,674
0.12
20,612
Cross-Country
Data
(156
Countries)
Rapeseed oil
543
2,163
3,143
0.11
17,978
Plam oil
536
2,106
2,322
0.20
10,597
Variable
Obs
Mean Std.2,743
Dev.
Min 12,908
Max
Sunflower
oil
739
2,057
0.06
Soybeanoil
oil
742
1,214
741
262 29,892
5,732
Soybean
934
2,551
3,326
0.02
Rapeseed
oil
742
1,404
932
146
5,995
Rapeseed oil
1,049
2,689
4,966
0.01
45,431
Plamoil
oil
742
1,109 11,317
719
225 164,014
5,467
Plam
1,447
4,458
0.31
Sunfloweroil
oil
742
1,386
829
362 20,796
5,974
Sunflower
778
1,751
2,723
0.03
Soybean oil
1,794
855
362
154
2,914
Rapeseed oil
1,794
1,053
497
146
2,992
Variable
Obs
Mean
Std.
Dev.
Min
Max
Plam oil
1,794
792
378
208
2,907
Soybeanoil
oil
1,151
3,148
3,431
0.26
23,160
Sunflower
1,794
1,043
416
293
2,982
Rapeseed
oil
820
1,770
2,958
0.03
15,490
Crude oil
1,794
254
115
80
680
Plam oil
804
2,646
2,388
0.37
10,902
Real Price
($/t or /kl)
Real Price
($/t or /kl)
2000-2009
Consumption
(g/capita/year)
(g/capita/year)
Real Price
2000-2009($/t)
Consumption
(g/capita/year)
Real Price
2000-2009
($/t)
Consumption
(g/capita/year)
Real Price
($/t)
2000-2004
Consumption
(g/capita/year)
Real Price
2000-2004
($/t)
Consumption
(g/capita/year)
Real Price
2005-2009($/t)
Consumption
(g/capita/year)
Real Price
2005-2009
($/t)
Consumption
(g/capita/year)
Real Price
($/t)
Rapeseed oil
Sunflower
Plamoil
oil
Sunflower oil
Soybean oil
Variable
Rapeseed
oil
Soybean
Plamoil
oil
Rapeseed
Sunflower oil
oil
Plam oil
Sunflower oil
Soybean
oil
Variable
Rapeseed
oil
Soybean oil
Plam oil
Rapeseed
oil
Sunflower
Plamoil
oil
Sunflower oil
Soybean oil
Rapeseed oil
Variable
Plam oil
Soybean oil
Sunflower
oil
Rapeseed oil
Plam oil
Sunflower oil
Soybean
oil
Variable
Rapeseed
oil
Soybean oil
Plam oil
Rapeseed
oil
Sunflower
Plamoil
oil
Sunflower oil
Soybean oil
Variable
Rapeseed
oil
Soybean
Plamoil
oil
Rapeseed
Sunflower oil
oil
Plam oil
Sunflower oil
Soybean
oil
Variable
Rapeseed
Soybean oil
oil
Plam oil
Rapeseed
oil
Sunflower
Plamoil
oil
543
742
536
739
742
Obs
742
1,151
742
820
742
804
1,142
1,155
Obs
1,155
1,151
1,155
820
1,155
804
1,142
1,155
1,155
Obs
1,155
559
1,155
404
390
553
560
Obs
560
559
560
404
560
390
553
560
Obs
560
592
560
416
560
414
589
595
Obs
595
592
595
416
595
414
589
595
595
595
595
2,163
1,386
2,106
2,057
1,214
Mean
1,404
3,148
1,109
1,770
1,386
2,646
2,320
756
Mean
1,009
3,148
713
1,770
976
2,646
2,320
756
1,009
Mean
713
3,063
976
1,769
2,464
2,161
684
Mean
891
3,063
655
1,769
892
2,464
2,161
684
Mean
891
3,228
655
1,771
892
2,817
2,469
824
Mean
1,120
3,228
767
1,771
1,055
2,817
0.11
362
0.20
0.06
262
Min
146
0.26
225
0.03
362
0.37
0.10
154
Min
168
0.26
208
0.03
293
0.37
0.10
154
168
Min
208
3.95
293
0.03
0.37
0.15
154
Min
168
3.95
259
0.03
293
0.37
0.15
154
Min
168
0.26
259
0.04
293
8.10
0.10
248
Min
229
0.26
208
0.04
389
8.10
17,978
5,974
10,597
12,908
5,732
Max
5,995
23,160
5,467
15,490
5,974
10,902
16,221
3,843
Max
4,387
23,160
5,844
15,490
4,201
10,902
16,221
3,843
4,387
Max
5,844
23,160
4,201
15,490
10,902
15,039
3,108
Max
4,387
23,160
4,026
15,490
3,312
10,902
15,039
3,108
Max
4,387
20,943
4,026
15,030
3,312
9,630
16,221
3,843
Max
4,000
20,943
5,844
15,030
4,201
9,630
0.10
248
229
208
389
16,221
3,843
4,000
5,844
4,201
(g/capita/year)
Rapeseed oil
Sunflower
Plamoil
oil
Crude
Sunflower oil
oil
408
659
498
659
287
1,796
1,180
3,035
171
1,334
Soybean oil
Variable
Rapeseed
oil
Soybean
Plamoil
oil
Rapeseed
Sunflower oil
oil
Plam oil
Crude
oil
Sunflower oil
Soybean
oil
Variable
Rapeseed
oil
Soybean oil
Plam oil
Rapeseed
oil
Sunflower
Plamoil
oil
Crude oil
Sunflower
oil
Soybean oil
Rapeseed oil
Variable
Plam oil
Soybean oil
Sunflower
oil
Rapeseed
Crude oil
oil
Plam oil
Sunflower oil
Soybean
oil
Variable
Rapeseed
oil
Soybean oil
Plam oil
Rapeseed
oil
Sunflower
Plamoil
oil
Crude oil
Sunflower
oil
Soybean oil
Variable
Rapeseed
oil
Soybean
Plamoil
oil
Rapeseed
Sunflower oil
oil
Plam oil
Crude
oil
Sunflower oil
Soybean
oil
Variable
Rapeseed
Soybean oil
oil
Plam oil
Rapeseed
oil
Sunflower
Plamoil
oil
Crude
Sunflower oil
oil
659
Obs
659
598
659
641
659
949
659
491
1,135
Obs
1,135
598
1,135
641
1,135
949
1,135
491
1,135
1,135
Obs
1,135
301
1,135
310
1,135
456
225
555
Obs
555
301
555
310
555
456
555
225
555
Obs
555
297
555
331
555
493
555
266
580
Obs
580
297
580
331
580
493
580
266
580
580
580
580
580
Table 4-3. Summary Statistics
Edible
Sunflower oil
Soybean oil
Rapeseed oil
Plam oil
Sunflower oil
3,143
829
2,322
2,743
741
Std. Dev.
932
3,431
719
2,958
829
2,388
3,342
Std. 295
Dev.
517
3,431
398
2,958
401
2,388
3,342
295
517
Std. Dev.
398
3,514
401
2,937
2,404
3,138
Std. 247
Dev.
455
3,514
331
2,937
351
2,404
3,138
247
Std. Dev.
455
3,351
331
2,981
351
2,363
3,519
Std. 320
Dev.
546
3,351
446
2,981
429
2,363
2,469
824
1,120
767
1,055
Real Price
2000-2009
($/t or /kl)
Consumption
(g/capita/year)
Real Price
2000-2009
($/t
or /kl)
Consumption
(g/capita/year)
2000-2004 Average
Real Price
($/t or /kl)
2000-2004
Consumption
(g/capita/year)
Real Price
2000-2004
($/t
or /kl)
Consumption
(g/capita/year)
Real Price
2005-2009
($/t or /kl)
Consumption
(g/capita/year)
2005-2009 Average
3,519
320
546
446
429
Real Price
2005-2009
($/t or /kl)
Consumption
(g/capita/year)
Real Price
($/t or /kl)
1,041
Mean
1,175
2,770
962
3,257
1,180
5,205
171
1,995
747
Mean
982
2,770
693
3,257
964
5,205
302
1,995
2,909
454
7,865
68
2,132
424
Std. Dev.
542
3,498
436
5,846
454
12,701
68
2,990
Std. 267
Dev.
454
3,498
298
5,846
369
12,701
109
2,990
0.05
362
0.31
80
0.60
262
Min
146
0.02
225
0.01
362
1.15
80
0.03
154
Min
168
0.02
208
0.01
293
1.15
151
0.03
20,706
2,982
89,889
680
14,069
2,721
Max
2,992
29,892
2,907
45,431
2,982
164,014
680
20,796
2,914
Max
2,940
29,892
2,866
45,431
2,891
164,014
610
20,796
747
982
Mean
693
2,357
964
2,386
302
4,344
1,573
679
Mean
874
2,357
649
2,386
883
4,344
211
1,573
679
Mean
874
3,189
649
4,073
883
6,000
211
2,352
813
Mean
1,084
3,189
736
4,073
1,041
6,000
389
2,352
267
454
Std. Dev.
298
2,815
369
3,763
109
10,818
2,677
Std. 224
Dev.
402
2,815
300
3,763
324
10,818
44
2,677
224
Std. Dev.
402
4,037
300
7,186
324
14,187
44
3,192
Std. 287
Dev.
478
4,037
290
7,186
393
14,187
77
3,192
154
168
Min
208
0.03
293
0.01
151
1.15
0.03
154
Min
168
0.03
259
0.01
293
1.15
151
0.03
154
Min
168
0.02
259
0.19
293
8.38
151
0.88
248
Min
229
0.02
208
0.19
389
8.38
189
0.88
2,914
2,940
Max
2,866
18,004
2,891
21,077
610
112,925
20,796
1,710
Max
2,425
18,004
2,866
21,077
2,891
112,925
606
20,796
1,710
Max
2,425
29,892
2,866
45,431
2,891
164,014
606
19,194
2,914
Max
2,940
29,892
2,762
45,431
2,750
164,014
610
19,194
Non-Edible
Soybean oil
Rapeseed oil
Plam oil
Sunflower oil
Crude oil
813
1,084
736
1,041
389
287
478
290
393
77
248
229
208
389
189
2,914
2,940
2,762
2,750
610
Table 5. Rate of change in the mean of consumption
and real price
Long term Change:
1990-1999
to 2000-2009 Average
From 1990-1990
to 2000-2009 average
Consumption
(g/capita/year)
Real Price
($/t or $/kl)
Soybean oil
Rapeseed oil
Plam oil
Sunflower oil
Soybean oil
Rapeseed oil
Plam oil
Sunflower oil
Crude oil
Edible Oils
7%
-18%
26%
13%
-38%
-28%
-36%
-30%
Non-Edible Oils
28%
81%
71%
50%
-28%
-16%
-28%
-18%
76%
Short term Change:
2000-2004
to 2005-2009 Average
From 2000-2004
to 2005-2009 average
Consumption
(g/capita/year)
Real Price
($/t or $/kl)
Soybean oil
Rapeseed oil
Plam oil
Sunflower oil
Soybean oil
Rapeseed oil
Plam oil
Sunflower oil
Crude oil
Edible Oils
5%
0%
14%
14%
20%
26%
17%
18%
Non-Edible Oils
35%
71%
38%
50%
20%
24%
13%
18%
85%
Table 6. Real GDP Per Capita
Africa
America
Asia
Europe
Oceania
Obs
940
620
700
760
100
Mean Std. Dev.
1,473
2,124
6,481
8,424
6,452
9,935
20,369 18,146
12,618 13,716
Min
28
451
206
352
767
Max
12,252
43,774
38,620
87,911
40,479
Demand Model for Edible Vegetable Oils
Double-log demand model for four edible vegetable oils
4
1)
ln 𝑃𝐶𝐶𝑂𝑁𝐹,𝑖,𝑡 = 𝐶𝑖 +
𝛾𝑖𝑗 𝑙𝑛𝑝𝑗,𝑡 + 𝛽𝑖 𝑙𝑛𝑥𝑡 × 𝐷𝑟 + 𝜏𝑖 × 𝐷𝑝𝑒 +𝜀𝑖,𝑡
𝑖 = 1, … , 4
𝑗=1
PCCONF,i,t ： per capita quantity of vegetable oil i consumed for food use at time t
Ci : constant term of vegetable oil i’s consumption
pj,t : real price of vegetable oil j (j = 1…4) at time t
xt : real GDP per capita at time t,
Dr : region dummy variable (1 or zero) for five regions
Africa, America, Asia, Europe and Oceania where countries are located
Dpe : preference dummy variable (1 or zero) for each country’s preference for a
certain type of edible vegetable oil i.
εi,t is a zero-mean, normally distributed constant variance disturbance
Ci, γij, βi and τi are parameters to be estimated
Demand Model for Non-Edible Vegetable Oils
Double-log demand model for four non-edible vegetable oils
5
2)
ln 𝑃𝐶𝐶𝑂𝑁𝐼,𝑖,𝑡 = 𝐶𝑖 +
𝛾𝑖𝑗 𝑙𝑛𝑝𝑗,𝑡 + 𝛽𝑖 𝑙𝑛𝑥𝑡 × 𝐷𝑟 + 𝜏𝑖 × 𝐷𝑝𝑛 +𝜀𝑖,𝑡
𝑖 = 1, … , 4
𝑗=1
PCCONF,i,t ： per capita quantity of vegetable oil i consumed for food use at time t
Ci : constant term of vegetable oil i’s consumption
pj,t : real price of vegetable oil j (j = 1…4) and crude oil j (j=5) at time t
xt : real GDP per capita at time t,
Dr : region dummy variable (1 or zero) for five regions
Africa, America, Asia, Europe and Oceania where countries are located
Dpn : preference dummy variable (1 or zero) for each country’s preference for a
certain type of non-edible vegetable oil i.
εi,t is a zero-mean, normally distributed constant variance disturbance
Ci, γij, βi and τi are parameters to be estimated
Table 7. Estimation Results (156 Countries for 1990 - 2009)
Edible vegetable oils
Ln Soybean Oil Real Price
Ln Rapeseed Oil Real Price
Ln Palm Oil Real Price
Ln Sunflower Oil Real Price
Non-Edible vegetable oils
Per Capita Consumption in 156 Countries (1990-2009)
Ln Soybean Oil Ln Rapeseed Oil Ln Palm Oil Ln Sunflower Oil
b/t
b/t
b/t
b/t
-0.38
0.12
0.33
0.29
[-4.12]***
[0.66]
[3.42]***
[2.53]**
0.04
-0.91
0.00
0.02
[0.73]
[-7.61]***
[-0.02]
[0.26]
-0.11
0.41
-0.84
0.40
[-1.49]
[2.72]***
[-9.96]***
[4.10]***
0.03
0.27
0.21
-1.00
[0.33]
[1.67]*
[2.47]**
[-9.15]***
Ln CrudeOil Real Price
Ln Real GDP per Capita in Africa
Ln Real GDP per Capita in America
Ln Real GDP per Capita in Asia
Ln Real GDP per Capita in Europe
Ln Real GDP per Capita in Oceania
Strong Preference Dummy
Moderate Preference Dummy
Weak Preference Dummy
Very Weak Preference Dummy
Constant
R-squared
Adj-R-squared
N
F
Root-MSE
* p<0.1, ** p<0.05, *** p<0.01
0.10
[3.64]***
0.14
[6.10]***
0.11
[4.92]***
0.11
[5.41]***
0.12
[4.92]***
3.73
[38.14]***
2.93
[39.12]***
2.24
[30.10]***
1.74
[22.20]***
7.09
[15.33]***
0.68
0.68
1,890
312
1.0
0.03
[0.54]
0.12
[2.78]***
0.14
[3.04]***
0.13
[3.31]***
0.16
[3.61]***
5.03
[29.79]***
3.92
[28.29]***
3.43
[18.32]***
2.36
[13.09]***
3.18
[3.50]***
0.70
0.69
1,347
235
1.6
-0.04
[-1.42]
-0.03
[-1.46]
-0.03
[-1.29]
-0.03
[-1.37]
-0.05
[-2.02]**
3.64
[41.00]***
2.67
[27.63]***
2.09
[23.99]***
1.62
[15.15]***
6.87
[13.62]***
0.65
0.65
1,328
189
0.9
0.18
[5.62]***
0.26
[9.79]***
0.22
[8.03]***
0.19
[7.91]***
0.19
[6.32]***
4.80
[49.47]***
3.60
[36.32]***
2.97
[25.52]***
2.42
[22.98]***
3.99
[6.93]***
0.77
0.77
1,833
465
1.2
Per Capita Consumption in 156 Countries (1990-2009)
Ln Soybean Oil Ln Rapeseed Oil Ln Palm Oil Ln Sunflower Oil
b/t
b/t
b/t
b/t
-0.28
0.14
-0.29
0.02
[-1.67]*
[0.64]
[-2.24]**
[0.07]
-0.02
-1.31
-0.10
-0.03
[-0.21]
[-8.50]***
[-1.26]
[-0.22]
-0.25
0.50
-0.49
0.28
[-1.90]*
[2.75]***
[-4.07]***
[1.43]
-0.02
-0.06
0.01
-0.96
[-0.12]
[-0.28]
[0.11]
[-3.50]***
0.27
0.87
0.87
0.70
[3.45]***
[8.46]***
[13.17]***
[5.80]***
0.14
0.27
0.13
-0.05
[3.57]***
[4.87]***
[4.35]***
[-0.74]
0.10
0.35
0.10
-0.07
[2.96]***
[7.71]***
[3.91]***
[-1.36]
0.10
0.29
0.13
-0.06
[3.03]***
[6.33]***
[5.00]***
[-1.11]
0.08
0.32
0.11
-0.03
[2.82]***
[7.47]***
[4.90]***
[-0.60]
0.12
0.23
0.11
-0.06
[3.61]***
[4.88]***
[4.12]***
[-1.06]
3.70
4.77
3.83
4.79
[28.91]***
[28.27]***
[39.19]***
[23.58]***
2.62
3.37
2.58
3.23
[19.76]***
[20.41]***
[26.51]***
[13.37]***
2.00
2.88
2.10
2.50
[15.33]***
[15.08]***
[23.90]***
[8.96]***
1.16
2.43
1.26
1.99
[7.22]***
[14.44]***
[12.73]***
[6.28]***
5.98
0.62
5.15
3.69
[7.04]***
[0.58]
[7.27]***
[2.80]***
0.60
0.73
0.63
0.60
0.59
0.73
0.63
0.59
920
1,034
1,436
774
96
197
176
80
1.0
1.4
1.1
1.4
Table 7. Estimation Results (156 Countries for 1990 - 2009)
Edible vegetable oils
Ln Soybean Oil Real Price
Ln Rapeseed Oil Real Price
Ln Palm Oil Real Price
Ln Sunflower Oil Real Price
Ln Real GDP per Capita in Africa
Ln Real GDP per Capita in America
Ln Real GDP per Capita in Asia
Per Capita Consumption in 156 Countries (1990-2009)
Ln Soybean Oil Ln Rapeseed Oil Ln Palm Oil Ln Sunflower Oil
b/t
b/t
b/t
b/t
-0.38
0.12
0.33
0.29
[-4.12]***
[0.66]
[3.42]***
[2.53]**
0.04
-0.91
0.00
0.02
[0.73]
[-7.61]***
[-0.02]
[0.26]
-0.11
0.41
-0.84
0.40
[-1.49]
[2.72]***
[-9.96]***
[4.10]***
0.03
0.27
0.21
-1.00
[0.33]
[1.67]*
[2.47]**
[-9.15]***
0.10
[3.64]***
0.14
[6.10]***
0.11
[4.92]***
0.03
[0.54]
0.12
[2.78]***
0.14
[3.04]***
-0.04
[-1.42]
-0.03
[-1.46]
-0.03
[-1.29]
0.18
[5.62]***
0.26
[9.79]***
0.22
[8.03]***
Table 7. Estimation Results (156 Countries for 1990 - 2009)
getable oils
n 156 Countries (1990-2009)
il Ln Palm Oil Ln Sunflower Oil
b/t
b/t
0.33
0.29Price
Ln Soybean Oil Real
[3.42]***
[2.53]**
Ln Rapeseed Oil Real
0.00
0.02Price
[-0.02]
[0.26]
Ln Palm Oil Real
Price
-0.84
0.40
[-9.96]***
[4.10]***
Ln Sunflower Oil-1.00
Real Price
0.21
[2.47]**
[-9.15]***
Ln CrudeOil Real Price
Non-Edible
vegetable
Edible vegetable
oilsoils
Per Capita
CapitaConsumption
Consumptionin
in156
156Countries
Countries(1990-2009)
(1990-2009)
Per
Ln Soybean
Soybean Oil
Oil Ln
LnRapeseed
RapeseedOil
Oil Ln
LnPalm
PalmOil
Oil Ln
LnSunflower
SunflowerOil
Oil
Ln
b/t
b/t
b/t
b/t
b/t
b/t
b/t
b/t
-0.28
0.14
-0.29
0.02
-0.38
0.12
0.33
0.29
[-4.12]***
[0.66]
[3.42]***
[2.53]**
[-1.67]*
[0.64]
[-2.24]**
[0.07]
0.04
-0.91
0.00
0.02
-0.02
-1.31
-0.10
-0.03
[0.73]
[-7.61]***
[-0.02]
[0.26]
[-0.21]
[-8.50]***
[-1.26]
[-0.22]
-0.11
0.41
-0.84
0.40
-0.25
0.50
-0.49
0.28
[-1.49]
[2.72]***
[-9.96]***
[4.10]***
[-1.90]*
[2.75]***
[-4.07]***
[1.43]
0.03
0.27
0.21
-1.00
-0.02
-0.06
0.01
-0.96
[0.33]
[1.67]*
[2.47]**
[-9.15]***
[-0.12]
[-0.28]
[0.11]
[-3.50]***
0.27
0.87
0.87
0.70
[3.45]***
[8.46]***
[13.17]***
[5.80]***
Ln-0.04
Real GDP per Capita
0.10
0.03
-0.04
0.18
0.18in Africa
0.14
0.27
0.13
-0.05
[3.64]***
[0.54]
[-1.42]
[5.62]***
[-1.42]
[5.62]***
[3.57]***
[4.87]***
[4.35]***
[-0.74]
Ln -0.03
Real GDP per Capita
in America
0.14
0.12
-0.03
0.26
0.26
0.10
0.35
0.10
-0.07
[6.10]***
[2.78]***
[-1.46]
[9.79]***
[-1.46]
[9.79]***
[2.96]***
[7.71]***
[3.91]***
[-1.36]
Ln
Real GDP per Capita
0.11
0.14
-0.03
0.22
-0.03
0.22 in Asia
0.10
0.29
0.13
-0.06
[4.92]***
[3.04]***
[-1.29]
[8.03]***
[-1.29]
[8.03]***
[3.03]***
[6.33]***
[5.00]***
[-1.11]
Ln-0.03
Real GDP per Capita
0.11
0.13
-0.03
0.19
0.19in Europe
0.08
0.32
0.11
-0.03
Figure 2. Cross-Price Effect on Global Demand for
Edible and Non-Edible Vegetable Oils
Note. Arrow represents the direction of cross price effect on demand for the other
vegetable oils at least the 10% significance level.
Figure 3. World Average of Non-Edible Vegetable Oils
Consumption per Capita and Crude Oil Nominal Price
Strategic Planning Initiatives
1) Policy and regulation:
e.g. Trans Fats Issue
2) Competitive product positioning:
e.g. Emphasis on a vegetable oil’s positive characteristics
3) Technological innovation:
e.g. High-oleic soybean innovation and commercialization
Key Point: Cost Performance after Quality Innovation
Because our paper finds that soybean oil price plays a central role in
demand determination of other edible vegetable oils in a global
market of edible vegetable oils through its cross-price substitution
effect.
Thank you for your attention.