Increased Demand for Oats Means World Oat Trade is Trending Higher than Ever

13 Oct 2016 --- Increasing demand for food products containing oats, combined with declining global oat production, will continue to increase world oat trade. While 10 countries still account for 85% of the world’s oat trade, there are new emerging participants.

After nearly ten stagnant years, world oat trade is again trending higher, with global oat imports and exports climbing to new record highs in 2015. This comes despite steadily declining oat production and reduced feed use of oats in most global regions and countries.

Driving the rising oat trade is the increasing demand for food products containing oats, such as breakfast cereals and snack bars, and the healthy reputation oats have with consumers, which is prompting food processors to develop new uses for oats.

An analysis of new launches tracked by Innova Market Insights (Jan-Aug 2016) featuring oats as an ingredient, found 28% to feature a “high/source of fiber” positioning, 23% to feature a “wholegrain” claim and 18% to be positioned on a “gluten free” platform. The US (18%) was the leading market for applications, ahead of the UK (8%) and Germany (6%).

The long term steady decline in oat production is a direct function of “consistently” low net returns for growers. Other commodities, such as wheat, oilseeds and specialty crops, are providing significantly better returns in most countries and regions, a trend that will remain in place moving forward.

Reduced feed demand for oats, commercially and on farms, has also contributed to the declining trend in oat production and rising world oat trade. Historically, oats were fed on farms in large volumes but declining animal numbers in many countries have reduced the demand for feed oats, and hence, production has declined. Increased use of complex compound feeds has also resulted in sharp declines in oat use in horse feed markets.

The combination of declining feed use of oats and production will continue to see world oat trade trending higher, as millers are left with few options to maintain a steady supply of quality oats.

In order to ramp up production of oats, Tate & Lyle PLC recently celebrated the opening of its expanded capacity at its oat ingredients manufacturing facility in Kimstad, Sweden. The expansion means that capacity at the facility has increased more than tenfold since it was acquired by Tate & Lyle in 2013 and it is part of a $100 million investment for Speciality Food Ingredients.

Oats, the grain with particular nutritional and functional properties, was identified by Tate & Lyle as a strategic addition to its range of raw materials – because unlocking the potential of oats would mean a major developmental opportunity for customers.

To support its commitment to oats, Tate & Lyle acquired Biovelop back in May 2013, a manufacturer of oat beta glucan with an innovative and cutting-edge production technology, and thereby extended its manufacturing presence to Sweden.

Now known as Tate & Lyle Oat Ingredients, this business applies a unique patented manufacturing process – without addition of chemicals or solvents – to convert locally sourced sustainable Swedish oats into PromOat Beta Glucan and PrOatein Oat Protein for food and supplements, and Avenacare Oat Beta Glucan for personal care.

Speaking with FoodingredientsFirst, Rowan Adams, Executive Vice President of Corporate Affairs for Tate & Lyle says: “We believe this plant in Kimstad, Sweden is the perfect logical place to base out oar business globally.”

“Sweden is well known for its high quality oats and this is just inside the “oat-belt” which goes all the way across Scandinavia. We are very lucky to be so close to all this fantastic high quality, locally sourced oat to make products and send them around the world to our customers.”

Read the full story here.

by Elizabeth Kenward

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