Oils & Fats: Strong world demand for food as well as for biodiesel

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• World production of 10 oilseeds is set to plunge to only 388 Mn T in 2007/08, 16.5 Mn T less than last season after new downward revisions of 1.6 Mn T for soybeans, by 0.3 Mn T for rapeseed & canola and by 0.3 Mn T for cottonseed….
• World crushings of 10 oilseeds have accelerated since about September. For Oct/Dec 2007 we estimate them to rise by 4.1 Mn T or 5% and for Oct/Sept 07/08 by 15.1 Mn T or 4.5%. Total disappearance is seen rising 3.7% to 410 Mn T. This means there will be an unprecedented world oilseed production deficit of 21-22 Mn T, thereof almost 19 Mn T soybeans and over 2 Mn T rapeseed…
• Tightness and very high prices of oils & fats likely to prevail also in Jan/Sept 2008. Strong world demand for food (mainly in Asia) as well as for biodiesel (in Europe, the USA, South America and other countries). – Bearishness of sharp increase in palm oil production & recovering stocks will probably be more than offset by the bullishness other oils & fats (mainly soya oil, sun oil and rape oil), caused by the low stocks at the start of this season, the strong world demand and a further decline in the world stocks of 17 oils & fats to 15.4 Mn T or 9.6% of consumption at the end of this season…
• Feedgrain shortage is strengthening oilmeal demand. In Oct/Dec 2007 we expect global oilmeal usage to rise 3.4 Mn T and in Oct/Sept 2007/08 14 Mn T from a year earlier, the latter comparing to annual increases of 10.5 Mn T in 2006/07 and 11.3 Mn T in 2005/06. Most of the increase is expected in soya meal (up 11.2 Mn T), but notable increases are also forecast for cotton meal (up 1.0 Mn T) & rape meal (up 0.8)).

  There will thus be a slight production deficit of 0.3 Mn T also for oilmeals, which will lead to a decline in the stock/usage ratio to 3.4% in Oct/Sept 07/08 vs. 3.6% last season…

(Cf. news of 2007-12-17.)

Source

Oil World, 2007-12-14.

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