September 30, 2009

The EU's zero-tolerance policy on imports of not registered genetically modified (GM) soy works in favour of rapeseed and other vegetable oil crops.

 

However, demand is difficult to match a Rabobank report said. It is expected that Europe's rapeseed consumption will jump by one-half by 2015.

 

Use of all major oilseeds will rise, with growth totalling 29 percent to 30.8 million tonnes, to feed increasing consumption of vegetable oils and processed foods.

 

According to the report, rapeseed is expected to lead the way, with consumption soaring to 12.5 million tonnes from 8.3 million tonnes in 2008, with sunflower use rising to 4.2 million tonnes from 3.4 million tonnes.

 

Soymeal imports will grow relatively slowly, partly due to the zero-tolerance policy on using GM crops.

 

Furthermore, China is sourcing more and more soy from Brazil. This growing trade tie is set to overtake US as the world's top exporter.

 

Rabobank said that as a result, this will further limit the sourcing options, as Brazil is the only country to still produce large volumes of non-GM crops.

 

The report comes as Chinese sovereign wealth CIC is finalising details for an agriculture-based investment in Singapore-based Noble Group, a major player in South American soy.

 

However, the EU's growing reliance on rapeseed will present only limited opportunities for the region's own growers.

 

Regulations capping crop use for biofuels, currently responsible for about two-thirds of Europe's use of the crop, will limit farmers' rapeseed plantings.

 

Rabobank also said that this will give opportunities to other rapeseed growing countries, adding that Canadian and Ukrainian exporters will capture the market growth of rapeseed and sunflower oil.

 

Europe's rapeseed harvest may set a record. Brussels-based grain lobby group Coceral has increased its output estimate by 12 percent.

 

The group said production this year will come in at nearly 20.6 million tonnes, a rise of 1.6 million tonnes on last year's record harvest.

 

The figure beats the 20.3-million tonne forecast by Oil World and the 20.0-million tonne estimates of the US Department of Agriculture.

 

The improvement reflected in particular better crops in France, Germany and Poland, the EU's three biggest growers.

 

In the UK, the forecast of the current rapeseed crop was set at 1.77 million tonnes, which is 200,000 tonnes below previous estimate of UK's Farmers Union.