December 14, 2011

Low global soymeal demand limits soy crushing

Sluggish demand for soymeal worldwide is restraining soy crushing and also the production of soyoil, oilseeds analysts Oil World said Tuesday (Dec 13).

"World consumption of soymeal will be smaller than expected in the October/December quarter, probably rising by only 0.8% from last year to an estimated 46.0 million tonnes, thus continuing the sluggishness already experienced in July/Sept. 2011," Oil World said.

"The slow off take in meal has curbed crushings of soybeans worldwide and contributed to the poor crush (profit) margins." But the soymeal consumption outlook is likely to improve in the new year, it said.

It estimates world October 2011/September 2012 soymeal consumption will rise 4% on the year to 182.2 million tonnes. Most of the increase will come from China and other Asian countries, South America, North Africa and Russia. Heavy competition from other vegetable oils is likely to darken soyoil prospects in coming months, it said.

"We expect soyoil imports to decline pronouncedly in North Africa, India and Iran," it said. "Many importing countries are partly shifting from soyoil to sunflower oil and/or palm oil. China is likely to raise soybean imports and crushings to compensate for insufficient imports of soyoil."

Global October/December 2011 soyoil output is likely to rise only 300,000 tonnes on the year to 10.82 million tonnes, a much smaller rise than in previous seasons, it said.

In the full season October 2011/September 2012, Oil World estimates global soyoil production will increase by 1.4 million tonnes to 42.87 million tonnes compared with a 2.6 million tonne increase in 2010/11.