December 3, 2008
World soy crushings to fall on low demand
World soy crushing is expected to fall this year due to low demand, reversing 10 years of crushing growth, said Hamburg-based oilseeds analysts Oil World on Tuesday (Dec 2, 2008).
World soy crushings will fall 1.5 million tonnes on-year in the fourth quarter of 2008 after declining 300,000 tonnes on-year in the third quarter, Oil World estimates.
Oil World said reductions for the fourth quarter is expected to reach 17 percent or 1.8 million tonnes in Argentina, and 6 percent or 800,000 tonnes in the US.
However, Oil World said, China's soy crushing is seen to increase by 8 percent or 700,000 tonnes.
This would be a reversal of the average growth of 8.4 million tonnes annually in the previous 10 years, it said.
Consumers in general are reserved buyers, with many of them limiting their purchasing to a hand-to-mouth basis due to persisting uncertainty, lack of confidence, the financial crisis as well as the unknown impact of the slowing economy, it said.
World soymeal consumption fell by 1 million tonnes in the third quarter of 2008 and a further drop of 1 million tonnes is expected in the fourth quarter, Oil World said.
The high meal yield of soy means good meal demand for animal feed is a key factor in crushing profitability.
"Soymeal is losing market share to other oilmeals, mainly rape and sun meals, as well as to feed grains," Oil World said.