|
|
EU-27 Oilseeds and Products Update Dec 2007Prepared by: Karin Bendz Introduction The oilseed situation in the EU is strongly driven by the demand for biodiesel and the competition between biodiesel and oil for food. The oilseed production in the EU this year has been largely influenced by weather conditions. While the north west part of the EU has had a quite cold and rainy season, the south east part of the union has had a severs summer drought that has influenced the harvest. In the south east part of the EU, where the drought has caused severe yield decreases, the most important oilseed is sunflower seed. Crude oil prices in Rotterdam have rallied to new record prices of €750 for soy oil and €855 for rapeseed oil for Dec/Jan delivery. Despite the very high prices for rapeseed and rapeseed oil the planted area is expected to decrease for MY 2007/08 due to the very high prices for wheat. In general the price for rapeseed must be twice as high as the price for wheat to generate the same profit, due to higher input costs for rapeseed.
Prices of rapeseed and rapeseed oil are still firm due to strong demand for rapeseed from the biodiesel and the food industry. Several consumers have reduced consumption of higher-priced sunflower oil. Strong demand for biofuels, sharply lower imports of rapeseed and canola oil from third countries, and very low rapeseed oil stocks are other factors influencing the prices. Another supportive factor for rape oil prices is reportedly the unusually large exports of EU rapeseed to third countries in the first 2-3 months of this season Despite the increased area planted with rapeseed in the EU27 this season the EU harvest is not expected to have increased as much as earlier anticipated. This is due to detrimental weather conditions. In the north west part of the EU the weather has been cold and rainy during the season, and in the south east part of the EU there was a severe summer drought.
In France rapeseed production has been significantly revised down from May estimates due to the adverse weather conditions. The wet summer favored fungi development and gave a yield of 2.81 MT/ha instead of expected 3.14. However rapeseed production in France is still increased in 2007, mainly due to the increase in acreage. The French rapeseed production in 2007 is 4,39 million MT, down 508,000 MT from earlier estimate. For next years crop, rapeseed plantings in France are estimated to decline by 10 percent. Several factors are putting downward pressure on industrial rapeseed acreage, including the fact that wheat is currently more profitable, the reduction of compulsory set-aside rate from 10 percent to zero percent by the EU Commission, and the questioning of the energy crop program (under which farmers get a 45 euro per hectare subsidy), under the CAP Health Check discussions. In Germany the preliminary final rapeseed production estimate for the 2007 harvest amounts to 5.3 million MT. This is a decrease of 0.6 percent compared to the harvest of 2006. The seemingly stable production occurred despite a 8 percent reduction in yields, which was offset by an 8 percent expansion of the area. A lack of spring rain and high incidents of the black leg fungus contributed to the lower yields. Industry in Germany estimates a reduction of winter rapeseed plantings for harvest in 2008 of 8 — 10 percent to about 1.4 million ha. This is largely a result of a reduction in the price difference between rapeseed and baking wheat In the U.K the area planted with rapeseed in 2007 was greater than previously predicted. The U.K is estimated to have increased its rapeseed area by over 20 percent year on year. The summer 2007 floods in the U.K did not affect rapeseed growing areas so the harvest yields have not been affected. In Romania the area cultivated with rapeseed was four times higher than the previous year reaching 348,000 Ha. However, due to the extremely unfavorable climatic conditions the output was 38 percent lower than earlier estimated. The entire harvest has already been sold either for internal use (for biodiesel), or exported (other MS or Turkey). Area sown with rapeseeds this fall expanded by 17 percent. Also in Hungary there is a firm growing tendency in the production area in the last years. The Hungarian rapeseed production is over 40 percent higher than earlier estimated, mainly due to higher than expected yields per hectare. For 2007/08 fall seeding indicates another 10-12 percent increase in area. In the Czech Republic the rapeseed area increased by 16 percent due to the biofuel production expectations. For My 2007/08 a production increase of 17 percent is expected. In Sweden the yields per hectare were higher than previously expected due to the weather conditions. The amount of rapeseed used for biofuel production is however somewhat lower than earlier expected. Plans to increase the capacity of biodiesel production have been put on hold due to uncertainties regarding future conditions for biodiesel production, e.g. government incentives to support such production.
At the beginning of the year, processors with multiseed crushing plants planned to reduce soybean crushing and expand rapeseed crushing. During the summer however, margins on soybean crushing increased in the comparison with rapeseed crushing margins. This is partly due to the increased demand for soybean meal. During 2007/08, feed use of soybean meal is expected to increase as a consequence of the limited availability of feed grains in the EU. In the Benelux soybean imports increased during 2006/07 and are expected to remain on a high level during 2007/08. The high prices for wheat and Barley makes them to expensive for pig and cattle feed. A combination of soybean meal and tapioca are replacing these grains. Also the use of rapeseed meal, sunflower seed meal and palm kernel meal is expected to increase in feed. In Romania the situation has changed radically since they joined the EU last year. In 2006 Romania had about 190,000 ha soybeans, of which about 70 percent were Round-up ready. This year the area is only 114,000 ha generating an output of 123,000 MT and as a result of the accession the seeds were entirely conventional. This year's bad weather condition has had less effect on soybeans than on other oilseeds, as mainly larger farms that afford irrigation grow this crop. However the extra costs for soybean production have been so high this year that farmers are discouraged to plant soybeans for next year, especially the farmers experienced with biotech soybeans in the past.
In Hungary sunflower seed harvest this year is 25 percent lower than earlier estimated because of the serious drought. The major consumer of sunflower seed in Hungary is Bunge. Bunge has just upgraded its main crushing facility and domestic crush of sunflower seed may increase by 15-20 percent during 2007/08. Sunflower seed production in Romania suffered by the severe drought and extreme heat too and the production this year was 62 percent lower than estimated this spring. Romania has until now been an exporter of about half a million MT of sunflower seeds per year. Nevertheless, since this year the total production is around this figure, the domestic processing industry needs will only be partially covered. The deficit is expected to be covered by crude oil imports, although at much higher prices. Also in Bulgaria the sunflower crop is affected by the drought, estimated average yields are at 0.6 MT/HA to 1.2 MT/HA. Current estimated harvest is at 650,000 MT. In major production areas, 25 percent of sunflower crop is severely hit, the remaining 75 percent is in relatively good condition. According to first reports, quality of sunflower is not very good, the fat content is lower and the percent of foreign matters is higher than usual. Total French sunflower seed production declined from 1.36 million MT in 2006 to 1.28 million MT in 2007, mainly due to reduced acreage, despite higher yields. Most domestic production consists of oleic varieties. The acreage planted to industrial sunflower seed increased from 54,000 ha in 2006 to 128,000 ha in 2007. Subsequent industrial sunflower seed production went up from 120,000 MT in 2006 to 310,000 MT in 2007. In Germany sunflowers are grown on a comparatively small area. Compared to 2006, the average yield increased by 30 percent to 2.5 MT/ha. However, this was more than offset by a 40 percent decrease in area to only 18,000ha. As a result the total crop decreased by 23 percent compared to 2006 to 47,400 MT.
Palm oil Palm oil imports to the U.K. mainly from Indonesia and Papua New Guinea, are about 16 percent lower than earlier expected.
Prices Vegetable oilseed prices have been increasing strongly this year and in Rotterdam prices for crude soy oil and rapeseed oil rallied to new record highs for Dec/Jan deliveries. Price for crude soy oil was €750/MT and for crude rape seed oil €855.
Prices of sunflower seed oil are still the highest though they are down from the highs registered in early October.
Date: 12.12.2007 Leave your comment
|
|
