August 18, 2010

Droughts set to boost global soy demand

Global demand for soy, soyoil and soymeal is likely to rise as traditional consumers of drought-damaged oilseed crops in Europe seek alternatives, Hamburg-based oilseeds analysts Oil World forecast on Tuesday (Aug 17).

The global dependence on soy will increase in the 2010-11 season owing to smaller than expected world production and supplies of rapeseed and canola, it said.

Analysts said that this will result in increased imports and crushing of soy in China, other Asian countries as well as in the European Union and many other countries.

A heatwave this summer has cut the EU's rapeseed crop. Droughts in Russia and Ukraine have brought export restrictions on grain and are also thought to have damaged the countries' rapeseed crops.

For the EU, analysts expect that oilseed crushers will step up soy imports and increase soy crushings to offset reduced processing of rapeseed. Rising demand is also expected in 2010-11 for soyoil and soymeal for largely the same reasons.

Considerable crop damage in several important countries is going to result in reduced availability of feed wheat and other farm fodder supplies as well as of rapemeal and sunflower meal, it said. In addition, this will further raise world demand for soymeal and corn.

Recent increases in soymeal demand have been noted in regions including the EU, Iran, South Korea, several other Asian countries and Central America, analysts said.