June 30, 2004

Soybean To Dominate US Production Of Fats And Oils

The US production of fats and oils is set to rise annually by a slight 0.8 per cent, from 11.8 million metric tons in 2003 to 12.3 million metric tons in 2008. The major vegetable oils-such as corn, rape seed, soybean and peanut - are projected to account for 69.9 per cent of the market, while animal fats are slated to account for the remaining 30.1 per cent.

Soybean oil - together with palm oil-presently accounts for over half of all oil consumed in the world. Rape seed and corn also enjoy a strong share of the market. But in recent months, supplies and prices have been severely impacted by crop shortages. The situation is similar in the soybean and rape seed market where high prices are linked to a pulling of stocks from China and a dip in supplies due to poor harvests.

But health concerns are currently driving the market for soybean oil. Ongoing research suggests soy not only lowers cholesterol, it can also have a preventative effect on breast cancer and other hormone-related cancers. Both the UK and the US have approved a health claim for soy.

The report suggests that US production of major crude vegetable oils is slated to reach 8.6 million metric tons in 2008, with soybean oil accounting for nearly 87 per cent of the major vegetable oil production at 7.4 million metric tons. US consumption of fats and oils is projected to increase at an annual rate of 1.7 per cent, from 12.7 million metric tons in 2003 to 13.8 million metric tons in 2008.