Vienna, Austria
August 1, 2012

USDA/FAS GAIN report

Executive Summary:

Production

In MY 2012/13, overall production in the EU-27 of major oilseeds (rapeseed, sunflower and soybeans) is expected to reach 27.6 MMT, a decline of 3.8 percent compared to the previous year. Most significant is the lower production of rapeseed due to winterkill in Poland, Romania, Bulgaria and France. However, favorable weather conditions over the past weeks in Germany, France, and the Czech Republic will lead to better than expected yields. Total EU-27 rapeseed production is forecast to be 18.5 MMT. For sunflower seed, hot and dry weather has reduced yield potential in major sunflower producing countries such as Spain, Italy, Hungary, Romania and Bulgaria. Weather conditions in the coming weeks remain critical for the sunflower crop and some irreversible drought damage in Spain and Romania has already been reported. The current estimate for the EU-27 sunflower crop in 2012/13 is 7.98 MMT. EU-27 production of soybeans remains very low compared to consumption and is forecast to decline 15percent to 1.1 MMT.

Consumption and Trade

Total EU-27 consumption of major oilseeds meals (rapeseed, sunflower and soybeans) in feed is forecast to decline 1.3 percent in MY 2012/13. Lower demand for soybean meal in animal feed, especially in Germany and Italy due to high prices for soybean meal relative to wheat, increased use of DDGs (dried distillers grains) and lower production of rapeseed meal are all factors in the decline. Overall EU-27 industrial use of rapeseed, soybean and sunflower oil in MY 2012/13 is expected to increase by 1.3 percent to 8.2 MMT. This increase is driven by a 25 percent higher demand for soybean oil in the biofuels industry through a rebound in the Spanish production of biodiesel. The low domestic production of rapeseed will require record rapeseed imports to satisfy demand from the crushing industry. The rapeseed crush is slight lower than last year. The sunflower crush is expected to increase marginally over from last year with gains coming in the first half of MY 2012/13. There will be a gradually reduction of the crush in the second half in anticipation of a potentially record sunflower crop in Argentina.

Policy

In late June 2012, the EU Commission presented its Working Document for an Action Plan to Support Olive oil producers, which included measures to prevent fraud as well as measures to improve the position of producers within the value chain through stronger producer organizations with enhanced bargaining power. Also, a better use of the market management tools and market promotion is foreseen in the Commission’s draft. Producing Member States are weighing in on the draft and the final plan will likely be released during the summer months.

Full report

Website: http://www.fas.usda.gov/

Published: August 10, 2012