December 23, 2003

Anticipated Increase in Global Consumption of Oilseeds, Soybean and Soymeal in 2004

Oilseeds

Global consumption of oilseeds in 2003/04 (October-September) can be expected to exceed 275m tons, up by more than 5% as compared to same period in 2002/03. The demand for the new sunflower seed crop is seen strong.

Exports by Ukraine and Russia, two sources with ample supplies, have picked up markedly since October 2003. Large quantities are going to the EU but Turkey, Pakistan and Mexico have also been buying. Mexico and Pakistan have been active buyers of rapeseed from Canada.

Soybean

There has also been good demand for soybean, mainly from China and Europe, where crush margins have been improving. Chinese imports of soybean in 2003/04 could exceed 21m tons compared with less than 19m tons in 2002/03. Export commitments for the US crop are now running at a high level, raising the possibility that the government will restrict exports to protect domestic supply.

Soybean Meal

Russian meat production is reportedly rising along with an increase in demand for animal feeds. Protein meal demand has benefited from a local feedgrain shortage. A proposal to lift the import duties on soybeans to increase domestic meal production will increase demand further if implemented. A decision is expected in January 2004.

Strong demand for soybean meal is also reported in South-east Asia. Some of the additional consumption has been met by increased exports of soybean meal from India, which have increased seasonally from October. Thailand and South Korea are both reporting higher imports of soybeans and soybean meal. By contrast, imports into Taiwan have been displaced by increased meat imports, especially from Brazil.

Global livestock production is expected to increase by 2% in 2003/04. A shift from beef towards poultry and pigmeat production will mean higher growth in soybean meal consumption, especially in view of the high costs of feedgrains in animal rations. Current forecast for soybean meal consumption is expected to grow by around 3% in 2003/04.