August 26, 2009

The EU's tough policy on GMOs will reduce European purchases of US soy and raise imports of Argentine soymeal, according to oilseeds analysts Oil World.

 

Early this month, EU importers said they were voluntarily stopping US soy imports after US soymeal shipments in Spain and Germany were found to contain traces of GM corn banned by the EU.

 

Oil World said EU importers are currently more or less unable to purchase US soy and soymeal as they fear that the cargoes will be rejected.

 

As a result, the EU will need to increase imports of soymeal in the next few months, mainly from Argentina, Oil World said.

 

The EU may import 7.8 million tonnes of Argentine soymeal in Oct 2009/Mar 2010, up from 6.65 million tonnes in the same year-ago period, Oil World forecast.

 

But it is unclear how much Argentina could supply due to a tight soy supply resulting from a poor crop this year.

 

Oil World estimates that EU imports of US soy in Oct 2009/Mar 2010 could fall to 1.5 million tonnes from 2.17 million tonnes a year ago.

 

The EU's GMO policy is likely to severely reduce capacity utilisation by EU soy crushing mills in coming months, it said.

 

The EU animal feed industry was likely to maximise use of rapeseed and sunflower meals to replace soymeal although use of rapemeal was already approaching maximum possible levels, it added.

 

The EU was also likely raise use of feed grains in animal feeds which are plentiful following good European cereals crops this summer, Oil World said.