Natural Fatty Acids
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Published: July 2012
Whether used as such or in the form of various derivatives, fatty acids are ultimately consumed in a wide variety of end-use industries. The economic growth of many of these industries (e.g., personal and household care, rubber, plastics and detergents) is often a good indicator of the overall economic performance of a region. Not surprisingly, historical growth in the consumption of fatty acids has tended to approximate GDP growth in the region of their consumption.
The following pie chart shows world consumption of fatty acids:
In Asia, particularly Southeast Asia, many new fatty acid plants have been built in recent years. This region is the major source of coconut, palm and palm kernel oils used as raw materials for C8-C14 fatty acids. Altogether, these countries (including Japan) account for 68% of total global fatty acids capacity. Malaysia, China, Indonesia and India together make up 93% of Asian capacity. Multinational parent companies have also shifted capacity to this region because of its lower production costs.
Asia accounts for 58% of the total world production of fatty acids and Malaysia, China, Indonesia and India account for 92% of Asia's fatty acid production. Indonesia and Malaysia are the world's leading palm oil producers and have raw material advantages. However, the rapid rise of fatty acid capacity in Malaysia has led to lower operating rates. The majority of fatty acids produced in Malaysia and Indonesia will continue to be exported.
Asia is the largest fatty acid–consuming region in the world, with 46% of total world consumption. China is the main consuming driver in the region, with nearly half of Asia's total consumption and a high annual growth rate of nearly 6% expected for the next few years. China is forecast to account for 26% of global consumption by 2016. The main use for fatty acids in Asia is soap production. Japanese consumption will grow only slightly in the next few years.
Other fatty acid–consuming regions with smaller markets are expected to experience relatively higher growth rates. For example, consumption in Central and South America is expected to grow at a rate of nearly 3% per year because of its emerging economies and use in personal and home care products. Consumption in Central and Eastern Europe will grow at a rate of 3–4% per year, while in the Middle East consumption is expected to grow at a rate of 5–6% annually (mainly with Turkey driving growth and satisfied by Asian imports). In Africa, nearly 4% average annual growth is expected, with South Africa accounting for about half of this market.
Overall, global fatty acid consumption is expected to grow at a rate of almost 3% per year during the next five years.