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  • Oct 25, 2014
  • Updated: 10:05am
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FOOD

Trans fat ban may hit US demand for soya oil

PUBLISHED : Friday, 08 November, 2013, 2:49pm
UPDATED : Saturday, 09 November, 2013, 2:35am

A US plan to ban artificial trans fats in processed foods could hit demand for as much as 15 per cent of the country's soya oil, an industry official estimated on Thursday, although analysts saw a limited market impact as use has already fallen sharply.

The US Food and Drug Administration proposed on Thursday banning the fats in foods ranging from cookies to frozen pizza, citing the risk of heart disease. Trans fats are used to help extend the shelf life or improve the taste or texture of some foods.

The oilseed and food-processing industries had been phasing out trans fats for several years, reducing consumption of hydrogenated soya oil to about 900,000 kilograms, or about 15 per cent of total soya oil consumption, said Richard Galloway, a consultant to the United Soybean Board.

That was down from 50 per cent as recently as 2005, Galloway said.

"At this point, a lot of the impact on the consumption of soya bean oil has already occurred," said Anne Frick, a senior oilseeds analyst with Jefferies Bache.

According to the Grocery Manufacturers Association, food manufacturers have voluntarily lowered the amounts of trans fats in their food products by more than 73 per cent since 2005. The FDA said the average daily intake of trans fats by Americans fell from 4.6 grams in 2003 to 1 gram last year.

Alternative vegetable oils such as palm oil and canola could see increased demand as replacements for partially hydrogenated soya oil, traders and analysts said.

"Palm oil is the largest globally traded edible oil today, and so I would think you would see substitution into these other edible oils," said David Lehman, the CME Group's managing director of commodity research and product development.

"If there's some restriction that affects soya bean oil more so than the other edible oils, then you would probably see substitution in the food manufacturing industry to those other oils."

Such substitution can take time.

"It isn't just a matter of taking out partially hydrogenated soy and plopping in palm oil or high-oleic canola. You might change the flavour profile significantly, and that is something food companies don't like to do," Galloway said. "Food companies take about two years from the time they are introduced to an alternative ingredient until they can commit to a switchover."

Restaurants may also have to adjust if trans fats are banned.

"This should be a warning that if you haven't taken them off the menu, now is the time," said David Maloni, the chief commodity analyst at the American Restaurant Association.

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