oilseed market in the conversion phase to a very favorable supply situation
The production of vegetable oils and fats will exceed consumption in the 2013/14 marketing year, says ISTA Mielke Oil World.
The Hamburg-based market research institute estimates production to be in the region of 194 million tons (previous year: 187 million tons). This assumes that no unusual weather conditions disrupt the growth of oilseeds.
Consumption of the 17 types of vegetable oils and fats is expected to increase by 5 million tons to around 193 million tons. Demand from the biodiesel sector will not change significantly because the European blending requirements will remain unchanged and the production of biodiesel from soybean oil in South American countries is proceeding very hesitantly.
The prices for vegetable oils and fats are strongly oriented towards the development of crude oil prices and are likely to remain under price pressure for the coming year. Palm oil prices in particular have been at a low level for over six months due to the accumulated surplus stocks in Malaysia.
The production of oilseed meals from 12 oilseed origins is expected to increase by 9 million tons to 300 million tons in 2013/14. Consumption will remain slightly lower at 299 million tons and ending stocks will increase to 10 million tons. In the leading soybean meal sector, a massive price decline is already expected in the third quarter of 2013. This is due to the high South American deliveries in conjunction with high harvest expectations in the USA.
The entire oilseed market is going through a transition phase from a previously tight supply situation to an abundant supply development with a correspondingly subdued price level.
Conclusion:
The Oil World market researchers' reports confirm the previous information and expectations regarding volume and price trends, as also published by other institutions.
