November 14, 2008

 

After four consecutive years of growth, global trade in oilmeals is unlikely to rise in the marketing year that began in October, due mainly to lower supplies of soy expected from the US.

 

Global trade in oilmeals including meal from beans is forecast at 62.8 million tonnes in the current marketing year to September 2009, almost unchanged from 62.6 million tonnes in 2007-08, the United Nations Food and Agricultural Organization said in a recent report.

 

Increased transactions in rapeseed meal, sunflower meal and palm kernel meal in 2008-09 are expected to be offset by an unusual drop in soymeal trading, due to weakening global demand a likely decline of around 10 percent in shipments from the US, it said.

 

There is a demand crunch facing soymeal this year, Dorab Mistry, director of Godrej International, a London-based trading company, told a conference earlier this week in China.

 

He said global supplies of wheat and other cheaper sources protein are currently higher than at any time in the last 3 years.

 

Global consumption of soy is likely to rise by only 3.8 million tonnes in 2008-09 to 234.8 million tonnes, and that would be the lowest annual increase in 3 years, said Thomas Mielke, editor-in-chief of Oil World, a Hamburg-based journal.

 

The FAO said consumption will grow around 3 percent, but this is below average and is constrained by competition from feed grains due to improved availability and attractive prices, and to low livestock numbers in countries such as the US and in EU associated with a reduction in profitability.

 

However, analysts point out that supplies continue to remain tight due to lower opening stocks, and the FAO said this is one of the reasons for slower growth in consumption.

 

Global oilmeal output is forecast to exceed consumption this year by only 1.1 million tonnes, or 1 percent, according to the FAO.

 

In the US, soymeal exports including meal in exported beans rose last year despite a poor harvest due to a drawdown in inventories, it said.

 

"This year, a below average soy crop, firm domestic consumption and the need to replenish stocks are anticipated to bring down exports from the US by more than 10 percent," the FAO said.

 

Due to low inventories, soy supplies in the US are expected to be lower this year despite a rise in output, Mielke said.

 

Soy production in the US could rise to nearly 80 million tonnes this year from 73 million tonnes in 2007-08, but supply is likely to be 86 million tonnes, down from 89 million tonnes, he said.

 

Meanwhile, the FAO said growth in exports from Brazil will be constrained by rising demand, but Argentina may step up sales abroad.