AMSTERDAM: Dutch vegetable oil processor Unimills, owned by Malaysia’s Sime Darby Bhd, sees volatility in edible oil prices as one of its main concerns in future, its managing director said on Wednesday.

Biofuels industry development has linked the price of raw materials such as palm and rapeseed oil more closely with the price of crude oil, leading to greater market fluctuations based on energy demand, Unimills’ Alexander van der Klauw said.

“Volatility is the worst that can happen to us. A price trend, one can anticipate. Volatility makes it harder for everyone,” Van der Klauw said in an interview with Reuters.

“A few years back, there was little connection bet-ween vegetable oil prices and mineral oil prices, but when they started to use them in biodiesel and energy, the link became clear because they could be substituted for each other.”

Van der Klauw said he now watched energy industry developments closely to help customers make choices about when to put in orders for their vegetable oil-based ingredients for products such as margarines, biscuits and icecream.

He also said Unimills is shifting towards producing more tailor-made and specialist products to shield itself from greater price fluctuations in markets for the raw commodities.

Unimills has developed a number of ingredients aimed at reducing saturated fat levels in products such as biscuits and chocolate spreads, while maintaining their taste and appearance.

Van der Klauw said this could be achieved by increasing the content of liquid oils in products, or reducing the level of coconut oil, for example.

About 60 per cent of the edible oils Unimills uses are palm or palm-based, while coconut and palm kernel oil make up about 15 per cent each and liquid oils such as rapeseed make up the remaining 10 percent.

He said palm oil was favoured for its versatility, availability, and value, as the tropical oil usually trades at a discount to other vegetable oils. – Reuters

Source: Business Times