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R.E.A Holdings PLC

World consumption of oils and fats has grown steadily during the last twenty or so years. 'Oil World' statistics indicate that consumption in the last ten years has increased from a level of some 155 million tonnes in 2007 to 214 million tonnes in 2017.

The growth rate in recent years has been higher than the rate that prevailed in the 1990's due to the incremental demand from the biofuels market. In the period from 1999 to 2005, annual increases in consumption were typically in the range of 4 to 5 million tonnes and arose primarily from the growth in demand for oils and fats as a food. Annual increases in consumption thereafter have been higher and reflect the additional use of oils and fats as biofuel feedstock.

Consumption in each country tends to favour locally produced oils and fats. In North America, Europe and the Soviet Union, annual seed crops are the main sources of oil; in tropical countries, coconut oil and palm oil, together with groundnut oil, are the main types produced and consumed.

World average per capita consumption of all oils and fats has also grown progressively each year during the last decade from a level of 23 kg in 2007 to 29 kg in 2017. Consumption per capita is closely related to income. In 2017, per capita consumption was some 67 kg and 65 kg in the US and the EU27 respectively, compared to levels of 18 kg and 27 kg for India and China respectively. At low income levels, elasticity of demand is high, whereas at high income levels, elasticity is reduced to values close to zero. It may be expected, therefore, that the highest increases in consumption will be exhibited in those low to middle income countries, where increasing per capita income can combine with relatively high rates of population growth. These high growth countries will tend to be in the developing world where palm oil has traditionally been strong.