June 9, 2008

 

Better yields push EU oilseed production 10 percent higher

 

EU-27 oilseed production for 2008/09 is forecast at 26.8 million tonnes, an increase of 10 percent compared to the last season, according to a Foreign Agricultural Services attache report released Friday (June 6, 2008 ).

 

The report presents the outlook for oilseeds in the EU-27. The report was based on the views of Foreign Agricultural Service (FAS) analysts in the EU and is not official USDA data.

 

The higher gains were due to expected better yields in 2008 on a marginal increase in area sown. 

 

In 2007, a lack of rain in spring and summer kept yields below average in a number of EU Member States, most prominently in Bulgaria and Romania. Rapeseed is the most important oilseed grown in EU-27 followed by sunflowers and soy.

 

The decrease in rapeseed area is largely a result of rapeseed losing out to wheat in major production areas, while the increase of sunflower area occurs at the expense of corn, soy or sugar beets.

 

The decrease in soy area is largely attributed to Romania as a result of the prohibition of GM soy varieties which went into effect with Romania's EU accession in 2007.

 

Oilseeds crushing capacity expanded considerably in recent years in response to the growing vegetable oil (mainly rapeseed oil) demand from the biofuels industry.

 

As much of the new crushing capacity is based on soft-seed such as rapeseed/sunflower seeds, rapeseed crush is expected to further increase in MY 2008/09.

 

As the increase in crushing is expected to outpace the increase in production, and because of better rapeseed availability on the world market, the EU's role as a net importer of rapeseed is expected to increase.

 

Soy crush is expected to continue its decline, while sunflower crush is expected to partially rebound as a result of a larger EU crop and better availability of sunflower seeds on the world market.

 

EU-27 production

 

Due to the crushing industry's increase in rapeseed crush, (the Netherlands recently invested in multi-seed crushing facilities increasing rapeseed crush at the expense of soy crush) the European demand for soy for crush is declining while imports of soymeal and oil are increasing.

 

The use of whole soy in animal feed is showing strong growth in MY 2007/08 as abnormally-high grain prices resulted in some displacement by soy in feed rations.

 

EU-27 soy production is expected to be relatively stable in MY 2008/09, with lower acreage in the two largest producing members (Romania and Italy, which together total 70 percent of the production) offset by higher yields.