Global Markets: Oilseeds – Demand Growth Forecast to Outpace Production (Again)

Global oilseed production is forecast to grow slightly in 2018/19. Soybean production is projected up, as Argentina is forecast to rebound from this year’s drought, offsetting year-over-year declines in production of the United States.

Rapeseed and sunflowerseed are both forecast to continue their growth in production. The palm kernel crop is expected higher in line with palm oil production. Peanut and cottonseed production are expected to decline.

Global oilseed consumption is forecast to rise, led by growth in China’s soybean crush. Global soybean demand, measured by total domestic consumption, is expected to grow at a solid rate, slightly lower than production growth. Consumption of other oilseeds is expected up as well, with the exception of cottonseed where global supplies are reduced.

Global oilseed trade is forecast up on higher demand from China. Global ending stocks are projected to fall, as lower carryin stocks coupled with increased consumption will result in lower ending stocks for 2018/19. While the ending stocks of palm kernel and rapeseed are expected to grow, all other oilseed stocks, led by cottonseed and peanuts, are expected to fall.

Global protein meal production is expected to grow slightly in 2018/19, tempered by a slight decline in fish meal production. Global protein meal consumption is also forecast to rise, mainly driven by robust demand from China.

Trade in protein meals is expected to grow as well, with soybean meal exports forecast up. Sunflowerseed meal exports are projected up sharply, while peanut meal exports are forecast to fall.

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Global vegetable oil production is expected to grow modestly, with all major oils forecast up except for olive oil. Palm, soybean, and palm kernel oil production are all expected to see a healthy jump on higher crop estimates.

Strong soybean meal demand will spur higher crush volumes, resulting in higher soybean oil production. Both rapeseed oil and sunflowerseed oil are projected to experience modest growth.

Global vegetable oil consumption for food is forecast to expand, reflecting growth in population and improved purchasing power in emerging economies. Growing food use will primarily be met by palm and soybean oil, followed by sunflowerseed and rapeseed oils.

Global consumption of oils for industrial use is also forecast to increase, in line with growing biodiesel production in major markets. Global vegetable oil trade is expected to see a healthy increase, with strong growth in palm, soybean, and sunflowerseed oils, despite reductions in cottonseed, olive, and coconut oils.

Global ending stocks are forecast to grow, led by a jump in palm oil stocks. Growing demand for “golden oils” is outpacing production, and will result in a drawdown of soybean and rapeseed oil stocks.

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