RESTRICTED GENERAL AGREEMENT ON COM.TD/W/337 TARIFFS AND TRADE 3 July 1981 Limited Distribution Committee on Trade and Development Forty-fourth Session 22 July 1981 TROPICAL PRODUCTS; INFORMATION ON THE COMMERCIAL POLICY SITUATION AND TRADE FLOWS Oilseeds, vegetable oils and oilcakes Note by the Secretariat Table of Contents1 Page Introduction 2 Section I: Production, market situation and prices 2 Section II: Exports and imports 7 Section III: Per capita consumption of fats and oils 18 Section IV: Commercial policy situation 21 Annex 12: Imports and exports by quantity and value of certain vegetable oilseeds and oils in 1977, 1978 and 1979 Annex 2: Gross imports of fats and oils into individual countries Annex 3: Pre- and post-Tokyo Round tariff rates and imports according to tariff treatment (all oilseeds, vegetable oils and oilcakes) the 1In Attachment to this note, information is provided on I. Certain measures affecting production, consumption and exports, II. Health and sanitary regulations and standards, and III. Certain developments in other international organizations. 2Annexes 1-3 are being issued as an addendum to this document. COM.TD/W/337 Page 2 Oilseeds, Vegetable Oils and Oilcakes Introduction 1. At the Committee's meeting of 11-12 November 1980, the Chairman noted that there was a broad consensus that work with regard to tropical products should proceed on a step-by-step basis. As a first step in this connexion, the secretariat was requested to provide detailed data on the commercial policy situation and trade flows for products listed in the Annex to document COM.TD/W/319. The hope was expressed that in the light of the information provided, the Committee would be in a position to exchange views on the post- Tokyo Round situation for these products in each country and thus focus on particular issues and problems which continued to affect access to markets for exports of developing countries. It was understood that such information would be furnished without prejudice to the question of the definition of tropical products or to the position of any delegation with regard to the treatment of issues in this area. As an additional step, the Committee would be expected to examine the possibilities for making further progress towards trade liberalization taking into account any factors which might have affected action in the Tokyo Round. 2. This paper provides data on oilseeds and vegetable oils (crude and processed), in particular those of tropical origin, including copra and coconut oil, palm kernels and palm kernel oil, and palm oil, as well as some other oilseeds and oils primarily produced in tropical areas such as groundnuts and groundnut oil, castor beans and castor oil and some miscellaneous oilseeds and oils of lesser importance in international trade. In addition, a number of references are made to certain other oils and seeds (e.g. soya beans and cotton seeds) of importance in terms of production and trade so as to provide an overall perspective of the situation while focussing mainly on oils predominantly of tropical origin. This paper also includes data on oilcakes and meals. 3. Section 1 provides information on production, the market situation and outlook and prices for the products covered. Section II provides data on exports and imports. Section III refers to per capita consumption of fats and oils in a number of markets. Section IV looks at the commercial policy measures applicable to selected oilseeds, vegetable oils and oilcakes with reference to tariff reductions made in the Tokyo Round, the post-Tokyo Round tariff situation, and some non-tariff measures. An attachment discusses certain questions regarding health and sanitary regulations and standards and refers to some recent developments in other international organizations of relevance to international trade in this area. Annexes to this document are being circulated separately as Add.l. The secretariat stands ready to provide such supplementary information as is available that the Committee may find of use in its work. SECTION I: Production, market situation and prices Production 4. Table 1 shows "production" and "gross exports" of different edible soap fats and oils in 1979, 1980 (estimate) and 1981 (forecast). "Production" figures for vegetable oils shown in this table refer to the oil equivalent of the oil seed crop which is available for crushing, irrespective of whether it is crushed in the producing country or exported in the form of oilseeds for crushing in the importing country. It may be noted that world production of all edible/soap fats and oils increased steadily between 1977 and 1980 from 48.1 million tonnes in 1977 to 56.2 million tonnes in 1979 and to an estimated 60.9 million tonnes in 1980. COM. TD/W/337 Page 3 TABLE 1 TOTALEDIBLESOAP ESTIMATED WORLDPRODUCTION AND GROSSEXPORTSFOR 1979 AND 1980: FORECASTS OF FATS AND OILS PRODUCTIONAND EXPORT AVAILABLE FOR 1981 - BY MAIN PRODUCTS TOTALESTIMATIFS NONDLAUX DELA PRODUCTIONET DES EXPORTATIONS ERUTES FOUR 1979ET1980 PREVISIONS DE LA PRODUTION ET DES DISPOXIBILITES EXPORTABLES FOUR 1981, PAR PRINCIPAUXPRODUTTS TOTALESGRASAS ACETTES ESTIMACIONDE LAPRODUCCION XUNDIL TOTAL Y DE LASEXPORTACIONES BRUTAS EN 1979 y 1980,PREVI- CONECTIBLES SAPON. PRINCIPALES Unit: 000metric tons Stocks at beginning Domestic Production of marketingLA Year LAS - SIONESDEPRODUCCIONestimateYDEDISPONIBILLADADESDEEXPORTACION 1981PRODUCTOS estimate PARA estimatePOR forecast forecast 19791980 1981 1979 1980 1981 1979 1980 1981 Butter(fat content) 421 430 425 5 615 5 590 5 590 995 1 045 1 055 Lard 17 23. 23 4 830 5 040 4 960 535 485 510 EDIBLE FATS 438 453 448 10 445 10 630 10 550 1 530 1530 1 565 Cottonneed oil 165 119 218 2 930 3 215 3130 395 450 430 Groundnut oil 110 114 113 3 575 3 415 3 255 805 710 465 Olivaoil 688 747 682 1 630 1 530 1 800 280 710 345 Rapeseed oil 163 472 633 3 645 3 9103503 840 11350 Soybeanoil 1 239 1 381 2 549 12 365 15 020 13 130 5 960 7 070 5 790 Sunflowermead oil 190 228 627 4 50 5 525 4575 1 1275 665 850 SOFT OILS 2 555 3 061 4 822 28 795 61532 29 770 10 06511555 9245 Coconut oil 12 9 6 7452 2845 2 985 1 280 1 4351570 Palmkernel oil 22 27 53 810 850 890 400 450 470 LAURIC OILS 34 36 59 3 555 3 695 3 875 1 680 1 885 2 040 Marine oils 18 29 30 1 290 1200 1 195 725 765 735 Pais oil 338 380 419 4 550 5 065 5 385 2 670 2870 3210 Tallow 157 177 177 5 655 5 670 5 670 2 045 1 710 1 685 OTHER EDIBLE/SOAP 513 586 626 11 495 11 935 12 250 5 440 5 345 5 630 misceilaneous edible soap fats& oils - - - 1 955 2 040 2 060 2851 1 285 1 285 600 FATSANDOILS 3 540 4 136 5 955 56 245 60915 56 505 20 000 21 19 765 1/Exports include data for: margaine, shortening and hydrogenated oils. TOTALEDIBLE/SOAP(Source: FAO) COM.TD/W/337 Page 4 5. Coconuts, palm oil and palm kernels are produced in most tropical countries in Africa, Asia, the Caribbean, Central America and the Pacific for domestic consumption and/or for export. Main producers of coconuts include the Philippines, Indonesia, India, Malaysia, Sri Lanka, Papua New Guinea and Mexico, of palm oil Malaysia, Indonesia, Nigeria, China, Ivory Coast, Papua New Guinea and Cameroon, of palm kernels Malaysia, Nigeria, Indonesia, Zaire, Benin, Cameroon, Ivory Coast and Sierra Leone. 6. Groundnuts are grown by a large number of countries. Developing countries produced over 80 per cent of world output in recent years. Main producers and exporters include India, China, Senegal, the United States, Sudan, Argentina, Brazil and Gambia. Since 1965 the output of groundnuts in West African countries such as Senegal, Nigeria and Niger has declined mainly because of climatic and other problems. While groundnuts have traditionally been an important food crop in a number of developing countries, over one-fifth of production has entered international trade in recent years. 7. The main producers and exporters of castor oil include Brazil, India, China and Thailand. Sheanuts are mostly produced in African countries, for example Mali, Nigeria, Upper Volta, Ghana and Benin. The Current Market Situation and Short Term Outlook 8. At the meeting of the FAD Intergovenmental Group on Oilseeds, Oils and Fats held in March 1981, the Group drew the following conclusions regarding the current market situation and short-term outlook for fats and oils as well as oilmeal proteins: "(i) After having grown for three consecutive years to new records, world output from current crops of edible/soap fats and oils as well as oilmeal proteins will fall in 1981 because of unfavourable weather and area diversions to other more remunerative crops in 1980. The fall is forecast at 4 percent and 11 per cent respectively for the two groups of commodities; but despite this, world output would still be close to the long- term trend; (ii) With the fall in output mainly concentrated in exporting countries, export availabilities in 1981 (based on the assumption of unchanged stocks and unchanged prices from the average level of 1980) are estimated to be considerably smaller than the record 1980 exports (7 per cent for edible/soap fats and oils and 10 percent for oilmeal proteins) and about the same as the 1979 exports; (iii) While the expansion in demand is likely to be limited, the prospective volume of demand is expected to result in a stock drawdown in 1981 which would mainly take place in Northern America - the main exporting region - where stocks are concentrated and where production has declined this year; COM.TD/W/337 Page 5 (iv) Even though the tight supply/demand situation, especially for oilmeals, would suggest higher average prices in 1981 compared with 1980, a number of factors have combined to depress and destabilize prices since the end of 1980.