highlights of this issue - oil world · highlights of this issue m our forecast of world soybean...

No. 30, Vol. 62 26 July 2019

Highlights of this Issue

M Our forecast of world soybean production hasbeen reduced to only 350.1 Mn T for 2019/20, down 6.1Mn T from a month and 11.5 Mn T from a year earlier.

M In China we now estimate soybean crushingsin Oct/Sept 2018/19 at a 3-year low of 84.3 Mn T, down11.9 Mn T.

M Tight rapeseed supplies in the EU-28 and inChina will contrast with burdensome supplies inCanada in 2019/20.

M In 2019/20 we expect a slowdown of thegrowth in world production of palm oil to 1.9 Mn Tcompared with 4.2 Mn T in 2018/19.

M A further reduction of the production growthof 8 oils to only 3.8 Mn T next season will requireadjustments of consumption.

M In 2019/20 diminishing growth in output ofseven other oilmeals is likely to contrast with apronounced recovery of soya meal production.

M Following a setback of 3.2 Mn T this season,we forecast world consumption of soya meal to recoverby 8.9 Mn T in 2019/20.

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OIL WORLD No. 30, Vol. 62 Price Survey July 26, 2019

OILSEEDS, CRUDE OILS, FATS, MEALS & GRAINS : Lowest Representative Asking Prices for NearestForward Shipment, in Bulk (excl. import duty, if any, US-$/Tonne)

July25

2019 Change

July18

2019

July11

2019Jun

2019May

2019Jun

2018

OctJun

18/19

OctJun

17/18Soybeans, Brazil, cif Rott .. .. .. .. 342 412 .. 427Soybeans, U.S., cif Rotterdam 377 Ag +1.9% 370 Jy/Ag 377 Jy 371 345 398 371 414Soybean oil, US, fob Gulf 676 Ag +1.8% 664 Jy/Ag 669 Jy/Ag 667 653 702 677 764Soybean oil,U.S.,fob Decatur(a) 640 +2.2% 626 636 625 595 625 629 686Soybean oil,Dutch, fob ex-mill 760 Ag/S +2.7% 740 Ag/S 728 Ag 726 733 786 740 840Soybean oil, Brazil, fob 656 Ag +3.5% 634 Ag 643 Ag 634 640 689 655 750Soybean oil, Argentina, fob 655 Ag +4.1% 629 Ag 640 Ag 629 639 683 645 750Soy.meal,44/45%,Hmb,fob exmill 322 Jy/Ag +1.3% 318 Jy 325 Jy 337 320 391 333 387Soya pell, 48%, Brazil, fob 319 S +2.2% 312 Ag 322 Ag 332 310 383 328 374Soya pell, 47%, Arg, fob 317 S +1.3% 313 Ag 321 Ag 330 310 386 326 379Soya meal, 49%,Arg,cif Rott 353 Ag +0.9% 350 Jy 352 Jy 366 343 420 360 413Soya pell, 48%,Brazil,cif Rott 345 Ag 0.0% 345 Jy 352 Jy 362 338 421 357 406Soymeal Yell 48% Ex-Kandla fas 445 Ag 0.0% 445 Jy 430 Jy 445 448 443 414 433

Groundnuts, US Runners 40/50(b) .. 1300 Jy/Ag 1325 Jy/Ag 1325 1305 1360 1294 1299Grnd'nt oil,any orig,cif Rott 1365 O/N 0.0% 1365 O/N 1375 S/O 1374 1370 1308 .. 1341

Sunseed, EU, cif Amsterdam 368 S/O -0.5% 370 S/O 370 S/O 380 405 420 386 407Sunseed, fob Black Sea 335 S/O -1.5% 340 S/O 340 S/O 350 375 390 355 381Sunoil, EU, fob N.W.Eur. ports 785 Ag/S 0.0% 785 Jy/S 755 Jy/S 738 726 759 703 787Sunoil, Arg., fob 730 Ag 0.0% 730 Ag 730 Jy/Ag 701 672 720 656 749Sunoil, fob Black Sea 770 Ag +2.0% 755 Ag 745 Ag 709 686 737 668 758Sunmeal, Ukraine, DAF 227 Ag +1.8% 223 Ag 220 Jy 228 212 270 218 214

Rapeseed,Europe,00,cif Hamburg 422 Ag +0.5% 420 Ag 417 Ag 417 409 406 420 423Rape oil,Dutch, fob ex-mill 864 Ag/O +2.7% 841 Ag/O 832 Ag/O 833 820 817 831 844Rape meal,34%,fob ex-mill Hmb 226 Ag/O +0.9% 224 Jy 226 Jy 237 232 264 258 253Corn oil, U.S., fob Midwest 590 Ag 0.0% 590 Jy/Ag 605 Jy 609 617 656 604 704Corn oil, U.S., fob Gulf 650 Ag 0.0% 650 Jy/Ag 665 Jy 675 695 710 683 787Olive Oil,Spain,Extra Virgin(c) 2573 Ag -0.9% 2597 Jy/Ag 2650 Jy/Ag 2528 2480 3212 2889 3982

Palm oil crude, cif Rotterdam(d) 515 Ag +5.5% 488 Jy/Ag 490 Jy 503 515 633 518 676Palm oil RBD, Mal, fob 510 Ag +3.4% 493 Ag 485 Jy 502 511 605 521 647Palm oil crude, Indonesia, fob 480 Ag +3.2% 465 Ag 458 Jy 469 471 597 491 645Palm olein RBD, Mal, fob 515 Ag +3.4% 498 Ag 492 Jy 508 513 610 524 651Palm olein RBD, Mal, cif Rott 560 Ag +2.2% 548 Ag 542 Jy 557 571 657 577 705Palm stearin RBD, Mal fob 490 Ag +2.1% 480 Ag 473 Jy 473 472 600 501 654Palm stearin RBD, Mal,cif Rott 535 Ag +0.9% 530 Ag 523 Jy 521 528 649 552 709Palmkern oil,Mal/Indo,cif Rott 610 Ag/S +13.0% 540 Ag/S 538 Ag/S 551 580 861 683 1150Palmkern exp,21/23%,cif Rott 143 Ag/O -1.4% 145 Ag 147 Jy 151 137 154 145 162Copra, Phil/Indo, cif N.W.Eur 475 Ag +9.2% 435 Jy 425 Jy 430 452 623 488 842Coconut oil,Phil/Indo,cif Rott 725 Ag/S +11.5% 650 Ag/S 650 Ag/S 643 669 938 731 1263Copra exp.pell. Phil, domestic .. 224 Jy 224 Jy 213 190 211 202 179

Butter, Germany, 25kg, min 82% 4113 -0.9% 4150 4230 4371 4595 7084 4910 6234Lard, EU, unrefined, 0.5%(e) .. 790 Ag 750 Ag 720 666 594 635 704Fish oil,any orig,cif N.W.Eur 1750 Ag 0.0% 1750 Jy/Ag 1750 Jy/Ag 1769 1785 1263 1613 1791Fish oil, Peru, fob 1825 Ag 0.0% 1825 Jy/Ag 1825 Jy/Ag 1875 1860 1238 1689 1924Fishmeal, 64/65%, Bremen fca 1485 Ag -0.8% 1497 Jy/Ag 1505 Jy/Ag 1521 1511 1494 1489 1512Fishmeal, Peru FAQ, fob 1370 Ag -0.7% 1380 Jy/Ag 1390 Jy/Ag 1378 1414 1350 1343 1470Fishmeal Peru fob Super Prime 1570 Ag -0.6% 1580 Jy/Ag 1620 Jy/Ag 1583 1640 1605 1573 1719

Linseed, Russia, cif N.W.Eur 452 S/O 0.0% 452 S/O 452 S/O 459 451 459 451 437Lin oil,any orig,ex-tank Rott 860 Ag -0.6% 865 Ag 865 Ag 848 823 850 828 829Lin exp,min.41% profat,fot Bel 365 Ag 0.0% 365 Ag 370 Ag 364 351 365 367 378Castor oil, ex-tank Rotterdam 1930 Ag -0.5% 1940 Jy/Ag 1970 Jy 1898 1971 1508 1842 1623Tung oil,S.America,ex-tank Rot 5050 Ag 0.0% 5050 Jy/Ag 5050 Jy 5043 5039 5248 4935 4914Tallow,US,bleach.fancy,cif Rot .. 825 Jy 825 Jy 810 790 721 750 752Tallow, Edible, US, fob Gulf 845 Ag +5.6% 800 Jy/Ag 790 Jy 795 782 738 772 753Wheat,U.S.,No.2,SRW, fob Gulf 216 S +0.5% 215 Ag 225 Ag 231 200 217 217 202Corn,U.S.,No.3,Yellow,fob Gulf 201 S -2.0% 205 Ag 215 Ag 210 179 172 176 172

(a)Prompt. (b)Shelled basis; cif Rotterdam. (c)Domestic, fob ex-mill, max. 0.8% ffa. (d)5% ffa, Malaysian/ Indonesian origin.(e)Packers' lard ex-mill.

Hamburg Market Prices - On July 25, 2019 prices closed in EURO per tonne:Soya meal: fob ex-mill: July 290-291a, Aug/Sept 288-290a,Oct 288-290a.

Soybean Crush Conversions in Euro per tonne: First position +18 as of July 25 and +20 as of July 18.

Soya oil, crude: fob ex-mill: Aug 685a, Sept/Oct 690a,Nov/Jan 685a.

Rapeseed Crush Conversions in Euro per tonne: First position +37 as of July 25 and +39 as of July 18.

Rape meal: fob ex-mill: July 201-202a, Aug/Oct 202-205a,Nov/Jan 212-214a. Rape oil, refined: Aug 855a, Sept/Oct 855a, Nov/Jan 856a.

Exchange Rate on July 25, 2019: 1 EUR = US-$ 1.1115and July 18, 2019: 1 EUR = US-$ 1.1216.Monthly averages: 1 EUR = US-$: June 2019: 1.1293, May2019: 1.1187.

OIL WORLD No. 30, Vol. 62 57 July 26, 2019

PRICES

Vegetable Oil Prices Have Started to Recover

Global production deficit projected for 2019/20

In the second half of July prices of soya oil, palm oiland lauric oils appreciated to 2 or 3-month highs,depending on location. Sun oil prices performed anastounding rally during the past four weeks. This wasmainly due to fundamental factors, primarily by unusu-ally high and domestic export demand. But also techni-cal factors (short-covering) contributed to this develop-ment.

Also rapeseed oil prices strengthened sizably inEurope during the past 2-3 weeks, partly due to spill-over strength from other vegetable oils and partly dueto the sharp decline in rapeseed production in theEuropean Union, lower than expected rapeseed pro-duction and export supplies in the Ukraine, reportsabout a smaller oil content of this year’s rapeseed cropin several regions and the prospective year-on-yeardecline in rapeseed oil production. We consider it likelythat rapeseed oil will continue to keep large premiumsvis-a-vis sun oil and soya oil in Europe also in July/June2019/20.

However, we are doubtful that the current strengthin sunflower oil will continue beyond August. This year’slarge crops in Ukraine, Russia, Romania and Bulgariashould result in supply pressure. We expect that thecurrent sun oil price premium vis-a-vis soya oil willdwindle and ultimately be converted into a price dis-count in coming months.

Our current forecasts for Oct/Sept 2019/20 pointto a slowing-down of the growth in world production of8 vegetable oils to only 3.8 Mn T compared with in-creases of 4.8 Mn T in 2018/19 and 10.2 Mn T in2017/18. The uptrend in palm oil production will loosemomentum and seed oil production will not be in theposition to offset this. Current high vegetable oil stockscan partly moderate the bullish impact from the pro-

spective below-average production growth. Thesestocks can be reduced.

However, consumption will have to be adjusted tothe tightening supplies. We therefore expect thatvegetable oil prices will appreciate in 2019/20.

In our opinion, palm oil as well as lauric oils will bethe price leaders upward. But there are many swingfactors to watch. One of them is the timing and magni-tude of the prospective slowdown in palm oil productionin Malaysia and Indonesia. Another one is the pricetrend of fossil fuel prices. Thirdly, developments inIndia will have to be watched. So far monsoon rainshave been below normal in many parts of the country.Plantings are delayed. If the required rains do not arrivesoon, Indian vegetable oil output will decline and importrequirements will rise accordingly in 2019/20.

World production of oilseeds is expected todecline by about 10 Mn T in 2019/20. This will be underthe lead of soybeans, primarily in the USA. But withsoybean stocks record large at the start of the newseason, world supplies are still expected to rise byabout 7 Mn T next season.

We expect an increase in world soybean crushingsby 12 Mn T in Oct/Sept 2019/20 following a year-on-year decline by about 5 Mn T in 2018/19.

World supplies of soya meal will become moreample next season. We expect meal prices to weakenrelative to vegetable oils. tmie

PRICE FORECASTS & Past Prices for the Leading Commodities - in US-$ per Tonne

Jan/June July/Dec J u l y / J u n e2020F 2019 2018 2019F 2018 2017 19/20F Change 18/19 17/18 16/17 15/16

Soybeans, US cif R’dam . . . . . . . 384* 369 421 388* 373 399 386* +4% 371 410 408 388Soya oil,Dutch, fob ex-mill . . . . . 800* 740 824 767* 753 864 784* +5% 747 844 837 756Soya oil, Arg. fob . . . . . . . . . . . . 710* 648 738 670* 645 767 690* +7% 646 753 754 675Soyapell. 47%, Arg. fob . . . . . . . 317* 322 405 345* 345 320 331* -1% 334 362 346 347Soyapell,48%, Arg., Rott . . . . . . 352* 356 438 378* 382 355 365* -1% 369 397 374 376

Sunseed, EU, Low. Rhine . . . . . 408* 392 415 392* 382 396 400* +3% 387 405 409 446Sun oil, EU fob N.W.Eur. . . . . . . 765* 710 785 735* 715 797 750* +5% 713 791 811 849Sun oil, fob Black Sea . . . . . . . . 735* 676 756 705* 685 765 720* +6% 681 761 755 787Sun meal, Ukraine, DAF . . . . . . . 210* 212 237 225* 242 172 218* -4% 227 204 187 210

Rapeseed,Europe,cif Hmb . . . . . 437* 416 419 423* 429 428 430* +2% 422 424 428 410Rape oil, Dutch, fob ex-mill . . . . 860* 819 816 845* 849 885 853* +2% 834 851 856 788Rape meal,fob ex-mill Hmb . . . . 230* 250 275 248* 275 213 239* -9% 262 244 227 241

Palm oil crude, cif N.W.Eur . . . . 610* 528 663 540* 532 695 575* +9% 530 679 734 620Palm oil crude, fob Indonesia . . . 580* 499 634 510* 507 668 545* +8% 503 651 701 583Palm olein RBD, Mal. fob . . . . . . 600* 532 645 540* 537 668 570* +7% 534 657 706 607

Palmkern oil, cif Rotterdam . . . . 710* 651 1040 620* 813 1272 665* -9% 732 1156 1353 987Coconut oil, cif Rotterdam . . . . . 850* 694 1146 750* 859 1535 800* +3% 776 1341 1609 1245

OIL WORLD No. 30, Vol. 62 Page 358 July 26, 2019

7 OILSEEDS

World Oilseed Production Is Now Seen Declining by 10 Mn T in2019/20

The prospective sharp decline in US soybean output can only be partly offset by higher crops in some othercountries

Our forecast of world soybean production hasbeen reduced to only 350.1 Mn T for 2019/20, 6.1 MnT less than a month earlier and 11.5 Mn T below a yearearlier.

The biggest change has occurred in the USA. Ourcrop estimate of 107.0 Mn T compares with last year’s123.7 Mn T and the most recent five-year average of114.9 Mn T. But there are still many uncertainties,primarily the area actually planted to soybeans in theUSA this year. Also, weather during August will be ofcritical importance. With crop development in arrears(due to late plantings) there is concern about damagefrom frost before maturity is reached.

We have raised our soybean crop estimate for Brazilto 122.0 Mn T for early 2020 compared with 121.0 MnT previously and 116.5 Mn T a year earlier. A recoveryis also anticipated in Paraguay and Uruguay while asetback is anticipated in Argentina, where corn andwheat plantings will be sharply increasing due toimproved competitiveness.

World production of rapeseed & canola will fallshort of earlier expectations and decline to an 8-yearlow of 62.9 Mn T, 2.0 Mn T less than a year ago andeven 4.1 Mn T less than in 2017/18. Rapeseed andrapeseed oil will continue to be in tight supply in theEuropean Union and China in 2019/20. Swing factorsto watch will be weather and crop development inCanada and Australia.

Another big sunflowerseed crop is developing fornext season, although production in Ukraine, Spain,France and Argentina is not fully coming up to earlierexpectations.

Only a slight recovery is likely to occur in worldproduction of groundnuts, mainly because the crops inIndia and China are forecast to remain below potential.

But cottonseed is likely to experience a strongrecovery with world production estimated to rise by 3.15Mn T in 2019/20, mainly on account of India, the USAand Pakistan.

World production and supplies of copra will decline,mainly in the Philippines (down 12%) as yields will belower owing to the lagged effect of unfavourably dryconditions.

At the same time the year-on-year growth inpalmkernel output will slow down in Malaysia andIndonesia. Although lauric oil stocks are still very highat the moment, the prospective production developmentwill tighten world supplies in 2019/20.

World production of 7 oilseeds is estimated todecline to 563.65 Mn T, which is approximately 10 MnT below a year earlier. But with world stocks recordhigh at the beginning of the season, world supplies willstill be rising by 8.2 Mn T in 2019/20, according tocurrent OIL WORLD forecasts.

There will be a global production deficit in2019/20, which will reduce stocks of oilseeds world-wide. The major change will be in soybeans, for whichwe expect world stocks to decline to 105.8 Mn T. But atthat level they will still be relatively ample, probablyaccounting for 30% of annual usage. This is compara-tively high but down from the record 32% estimated atthe end of the 2018/19 season.

OILSEED CONSUMPTION SMALLER THANEXPECTED IN 2018/19

We now estimate world crushings of soybeans todecline by 5.4 Mn T in Oct/Sept 2018/19. The declineis considerably stronger than previously anticipated andthe reason is China, where soybean crushings declinedsizably to only 6.67 Mn T in June (against 7.95 Mn T ayear earlier) and where we now estimate soybeancrushings in Oct/Sept 2018/19 at a 3-year low of 84.3Mn T, down steeply by 11.9 Mn T from a year earlier.Chinese soybean imports declined even more sharplyand, as a result, stocks of imported soybeans wereunusually low as of end-June. We expect a sharpincrease in Chinese soybean imports in July. Also,there will be increased Chinese purchases in the weeksand months ahead.

China will need more soybeans in July/Dec 2019.Soybean imports were unusually low at 38.3 Mn T in

7 OILSEEDS: World Supply and Demand ( Mn T )

Forecast Change 2019/20F to 18/19 18/19 17/18

Opening stocks 127.3* +18.3 109.0 108.2 Production . . . . . . . 563.7* - 10.0 573.7 556.3

thereof: Soybeans 350.1* - 11.5 361.6 341.7 Sunseed . . . . . . . . 52.1* - 0.4 52.5 49.2 Rapeseed . . . . . . . 62.9* - 2.0 64.9 67.0 Cottonseed . . . . . . 45.6* +3.1 42.5 44.5 Groundnuts (b) . . . 29.7* +0.4 29.3 31.6 Palmkern & Copra 23.3* +0.2 23.1 22.3

Total supplies . . . . . 691.0* +8.2 682.8 664.4 thereof: Soybeans 460.0* +7.0 453.0 436.0

Disappearance . . . . 568.4* +13.0 555.4* 555.4 thereof: Soybeans 354.2* +11.1 343.1* 344.6 Sunseed . . . . . . . . 52.2* +/- 0 52.2* 49.3 Rapeseed . . . . . . . 63.5* - 0.7 64.2* 64.1

Ending stocks . . . . . 122.6* - 4.7 127.3* 109.0 thereof: Soybeans 105.8* - 4.1 109.9* 91.4 Sunseed . . . . . . . . 3.8* - 0.1 3.9* 3.6 Rapeseed . . . . . . . 9.4* - 0.6 10.0* 9.3

Stocks/usage (a) 21.6% 22.9% 19.6%thereof: Soybeans 29.9% 32.0% 26.5%

(a)Stocks in % of annual disappearance. (b)Shelled basis.


Jan/June 2019, according to official import data. Ascrushings exceeded expectations in recent months,stocks as of end-June were unusually low. This willrequire a significant pick-up in soybean imports. Weexpect that the import volume in the second half of thisyear will sizably exceed the quantity imported inJan/June.

China already resumed purchases of South Amer-ican soybeans last week and reportedly purchased atleast 20 cargoes, most of which from Brazil and somefrom Argentina and Uruguay.

But with total Brazilian soybean export suppliesdown approximately 10-11 Mn T from last year inJuly/Dec 2019, China will have to step up purchases ofsoybeans in the USA and Argentina.

Chinese purchases of US soybeans have beenresumed this week. The Government issued a tariff-freequota of 2-3 Mn T to be imported from the USA. Corre-sponding import-duty waivers for the duty-free importsare now offered to some Chinese importers (both state-owned and private) and soybean crushers. Somecargoes of US soybeans were already purchased thisweek.

Chinese authorities communicate the quota as asign of goodwill and it is indicated that there could beadditional duty-free import quotas, if good progress canbe made in forthcoming trade negotiations.

But also Chinese crushers will benefit from duty-freeimports of US soybeans, particularly until new-cropBrazilian soybean supplies become available in early2020.

Soybean crushings will increase sizably, however,in Argentina to an estimated 39.7 Mn T in Oct/Sept2018/19 (up 2.7 Mn T from a year earlier) and a furtherincrease is anticipated for Oct/Sept 2019/20.

Increases are also occurring in Oct/Sept 2018/19 inthe European Union (up 0.5 Mn T) as well as in Russia& Ukraine by a combined 0.9 Mn T, as well as in Egypt,Mexico, India, Pakistan, Thailand, Bangladesh andseveral other countries.

However, these increases cannot offset the substan-tial decline which is occurring in China. As a result,world soybean crushings are likely to decline to anestimated 299 Mn T in Oct/Sept 2018/19 from 304 MnT last season.

For Oct/Sept 2019/20 we expect a recovery in worldcrushings to about 311 Mn T. While Chinese crushingsare still likely to decline in the first few months of thenew season, we expect some recovery in the course of2020. Higher crushings are also expected in Argentina,Brazil and the USA.

SOYBEANSIn the USA there is considerable uncertainty about

this year’s corn and soybean crops. It is totally unclearhow much corn and soybeans were actually plantedand how much was declared as prevented plantingacres for both crops. We will have to wait until therelease of the new survey on actual plantings in August.

In the latest update on July 11 the USDA used aplanting estimate of 91.7 Mn acres or 37.1 Mn ha forcorn and 80.0 Mn acres or 32.4 Mn ha for soybeans.We expect that the area for corn will be revised down-ward and the area actually planted with soybeansupward.

As a working estimate we currently assume actualUS soybean plantings of 81.5 Mn acres or 33.0 Mn hathis year. We expect the average yield to be down 6%from last year and peg this year’s US soybean crop at107.0 Mn T compared with 123.7 Mn T in 2018.

In the USA weather conditions have generally beenfavourable in the second half of July with the absenceof damaging heat. But there is now concern that it willbecome warmer and drier in August, which could stresssoybeans in their critical stage of pod-setting and filling.

The crop development is behind for soybeans aswell as for corn. As of July 21 soybeans were bloomingon only 40% of the area on the average of 18 states(against 76% last year and 66% average), but inIndiana and Ohio they were blooming on only 21 and27%. Crop conditions are down from last year andaverage with 54% of the soybean crop rated good orexcellent compared with 70% a year earlier.

In Argentina a sharp increase in grain plantings willlimit oilseed cultivation in 2019/20.

We expect sharp increases by 0.4 Mn ha in wheatand by even 0.7 Mn ha in corn plantings, bringing thetotal area under grains to a record 17.45 Mn ha, up 0.9Mn ha from a year earlier.

For all oilseeds we only expect a stagnation in thearea sown, already assuming a further increase indouble-cropping of soybeans (after wheat) of 4.5 Mnha. Total soybean plantings in Argentina will probablybe unchanged or marginally higher at 17.6 Mn ha, downsharply from the record 20.3 Mn ha planted four yearsago. Sunflowerseed sowings are likely to be reduced to1.75 Mn ha.

In the southern hemisphere we estimate soybeanproduction to increase by 5.1 Mn T from a year earlierto a new high of 192.9 Mn T in early 2020. This ismainly on account of Brazil. We also expect increasedproduction in Paraguay and Uruguay.

7 OILSEEDS : World Crushings ( Mn T )October/September

19/20F 18/19 17/18 16/17 15/16Soybeans . . . . . 311.00* 298.88* 304.25 288.21 276.94Cottonseed . . . . 33.43* 32.51* 32.65 29.88 29.73Grdnuts, shelled 9.25* 9.20* 10.41 10.29 9.01Sunflowerseed 47.45* 47.51* 44.69 44.74 38.20Rapeseed . . . . . 61.54* 61.79* 62.20 60.60 61.60Palmkernels . . . 18.60* 17.88* 16.96 15.66 14.18Copra . . . . . . . . 4.33* 4.67* 4.42 3.97 4.17Total . . . . . . . . . 485.60* 472.44* 475.59 453.34 433.84

ARGENTINA : Grain & Oilseed Plantings ( Mn ha )

19/20F 18/19 17/18 16/17 15/16 All Grains 17.45* 16.57 15.75 15.18 13.20

Wheat . . . . . . . 6.60* 6.20* 5.70* 5.40* 4.20*Corn, total . . . . 7.70* 7.00* 6.70* 6.20* 4.85*

All Oilseeds 20.20* 20.17 19.79 21.48 22.54 Soybeans . . . 17.60* 17.50* 17.20* 19.10* 20.30*Sunseed . . . . . 1.75* 1.82 1.75* 1.69 1.33*

Total Plantings 37.65* 36.74 35.54 36.66 35.74

2nd crop soybeans 4.50* 4.30 3.58 3.69 2.94

Cultivated Area 33.15* 32.44 31.96 32.97 32.80


RAPESEED & CANOLAOutlook 2019/20: Diverging global fundamentals

are seen as the key characteristic of the 2019/20marketing year, with tight rapeseed supplies in the EU-28 and China – the two largest consuming countries –and burdensome supplies in Canada. It remains to beseen whether and to what extent the global market willbe able to overcome latest political conflicts and non-tariff trade barriers via price adjustments to achieve thenecessary reallocation of trade flows.

This is likely to keep the premium of EU rapeseedover Canadian canola unusually high in comingmonths. Similar to the situation in soybeans in the pasttwelve months, when China shifted a large part of itsimport requirements from the US to South America atthe expense of sizeable premiums of South Americansoybean over US origin, EU rapeseed crushers willhave to pay a premium for Ukrainian rapeseed (inJuly/Dec) and Australian canola (in Nov/June 2019/20)so that demand will be shifted from other importingcountries such as Pakistan, the UAE, Japan andBangladesh to Canada.

Rapeseed futures on the Euronext appreciated toEUR 380 in the August contract on July 25, a contracthigh and above EUR 354 quoted a year earlier.

A further downward revision in the EU rapeseedcrop to 17.5 Mn T (down 2.4 Mn T on the year) andlower than expected production and export supplies inUkraine have significantly tightened supplies for EUcrushers in July/June 2019/20. We expect EU importsof rapeseed & canola to reach a record 5.5-5.6 Mn Tthis season (vs. 4.35 Mn T in July/June 2018/19).

Current production estimates for Ukraine andAustralia are limiting increases in rapeseed & canolashipments from the two countries to the EU to a com-bined 0.4-0.5 Mn T this season, shifting the lion’s share

of the additional requirements to Canada. However,non-tariff trade barriers (e.g. non-GM requirements andsustainability criteria) on Canadian canola in the EUmay curb actual imports below our current estimate of1.1 Mn T in July/June 2019/20 (vs. 0.4 Mn T).

On top of lower EU rapeseed crushings, oil yields ofthis year’s rapeseed crops in parts of the EU and inUkraine are reportedly below normal, further tighteningsupplies for European rapeseed oil consumers. This islikely to also keep EU rapeseed oil prices at sizeablepremiums vis-a-vis soya and sun oils in 2019/20. Lastweek we revised our Ukrainian crop estimate to 3.4 MnT, compared with earlier expectations of 3.7-3.8 Mn Tbut still a multi-year high.

World rapeseed production is now estimated todecline by 2.0 Mn T to 62.9 Mn T in 2019/20, with sharpdeclines in the EU-28 and Canada only partly offset byincreases in Ukraine, Russia, China and Australia.Weather conditions in Australia will have to be moni-tored closely in coming months. If moisture supplies arenot replenished in time, Australian production may fallbelow our current estimate of 2.7 Mn T this year.

EU- 28 : Rapeseed Supply & Demand ( Mn T )J u l y / J u n e

19/20F 18/19 17/18 16/17 15/16 Opening stocks . 2.03* 2.21 1.28 1.17 .88

Output . . . . . . . . 17.48* 19.91 21.88 20.50 22.31 thereof: France . . 3.80* 4.98 5.24* 4.74 5.33 Germany . . . . 3.05* 3.67 4.28 4.58 4.92 Poland . . . . . 2.42 2.11* 2.65* 2.17 3.08 U.K. . . . . . . . 1.87* 2.07 2.08* 1.78 2.54 Czech Rep. . . 1.26* 1.41 1.15 1.36 1.26 Romania . . . . .68* 1.61 1.85* 1.73 1.09

Imports (a) . . . . . 5.56* 4.35* 4.24 4.96 3.50 thereof: Ukraine . 2.47* 2.16* 1.73 1.00 1.11 Canada . . . . . 1.10* .40* .47 .76 .44 Australia . . . . 1.68* 1.54* 1.86 3.12 1.83

Exports (a) . . . . . .03* .07* .13 .32 .35

Crushings . . . . . 22.99'* 23.50* 24.17 24.17 24.32

Other use (b) . . . .83* .88* .89 .86 .87

Ending stocks . . . 1.21* 2.03* 2.21 1.28 1.17 (a) EU intra-trade is excluded. (b) Residual.

SOYBEANS : World Supply and Demand ( Mn T )

19/20F 18/19 17/18 16/17 Opening stocks 109.91* 91.41 94.28 76.63

Production 350.10* 361.57 341.73 345.05 N. Hemisphere 157.19* 173.79 168.76 161.20 EU-28 . . . . . . . . 2.75* 2.71 2.63 2.48 Russia&Ukraine 8.70* 8.95* 8.37* 7.64* Canada . . . . . . . 6.58* 7.27 7.72 6.60 U.S.A. . . . . . . . . 107.00* 123.66 120.07 116.93 China, P.R. . . . . 16.80* 15.30* 16.40* 11.71 India . . . . . . . . . 9.80* 10.50* 8.30* 10.50*

S. Hemisphere 192.91* 187.78 172.97 183.85 Argentina . . . . . 52.80* 56.00* 35.00* 52.00* Brazil . . . . . . . . 122.00* 116.50* 122.00* 114.08 Paraguay . . . . . 10.50* 8.40* 9.95* 10.00*

Total supply 460.01* 452.98 436.01 421.68

Crush (Sept/Aug) . 309.40* 299.68* 302.42 286.49

Other use . . . . . . 44.81* 43.39* 42.18 40.91

Ending stocks 105.80* 109.91* 91.41 94.28 U.S.A. Aug 31 25.20* 30.10* 11.92 8.21 Argentina Aug 31 31.20* 36.36* 24.00* 28.25* Brazil Aug 31 27.85* 25.45* 33.97* 33.72* Other countries 21.55* 18.00* 21.52* 24.10*

Stocks/usage 29.9% 32.0% 26.5% 28.8%

RAPESEED & CANOLA: World Supply & Demand

(Mn T) 19/20F 18/19 17/18 16/17 Open’g stocks 9.96* 9.26 6.41 6.23

Production . . . . 62.86* 64.86 66.97 63.17 EU-28 . . . . . . . 17.48* 19.91 21.88 20.50 Russia&Ukraine 5.80* 5.12* 3.86* 2.29* Canada . . . . . . 19.20* 20.34 21.33 19.73* U.S.A. . . . . . . . 1.58* 1.64 1.39 1.41 China . . . . . . . 5.20* 4.80* 4.80* 5.60* India . . . . . . . . 7.50* 7.75* 7.10* 6.75* Australia . . . . . 2.74* 2.18 3.67 4.40*

Total supplies 72.82* 74.12 73.38 69.40

Crush (July/June) 61.30* 61.99* 61.75 60.61

Other use . . . . . . 2.15* 2.17* 2.37 2.38

End’g stocks . . . 9.37* 9.96* 9.26 6.41 EU-28 (Jun 30) 1.21* 2.03* 2.21 1.28 Canada (July31) 4.52* 4.33* 2.50 1.34 Other countries 3.64* 3.60* 4.55 3.79

Stocks/usage 14.8% 15.5% 14.4% 10.2%


SUNFLOWERSEEDGenerally favourable weather conditions are cur-

rently supporting sunflowers in their reproductive stagesof development in many parts of the former SovietUnion republics and the southeastern EU. Although itremains to be seen whether last year’s record yields,primarily in Ukraine and Russia, will be repeated in2019, the stage for sharply above-average yields isprobably already set, especially in view of additionalprecipitation in many key summer-crop growing areasin the next two weeks.

Thus, there is currently no need to scale back ourrather optimistic yield forecasts for the two largestsunflowerseed producing countries. Yet, we havereduced our estimate of the 2019 Ukrainian crop by 0.2Mn to 15.0 Mn T, considering latest information aboutslightly lower than expected plantings. Ukrainianfarmers reportedly boosted this year’s corn area to arecord 5.0 Mn ha (up 9% on the year), partly at theexpense of sunflowerseed.

We now consider it likely that Argentinesunflowerseed sowings will fall short of expectations in2019, primarily in northern parts of the country wheremany fields are still inundated, complicating the begin-ning of field preparations.

We have raised our estimate of the EUsunflowerseed crop to 9.95 Mn T in 2019, up 0.3 Mn onthe year and close to the 2017 record of 10.1 Mn T. Thelargest upward revision was on account of Romania,followed by Bulgaria and Hungary, improving theoutlook for sunflowerseed crushings and exports fromthe Balkan region in 2019/20.

However, the production outlook has deterioratedconsiderably in Spain and France of late as a result ofthe predominantly hot and dry weather in June and sofar in July, which has affected filling of sunflowers andpushed them towards maturity earlier than usual.

In Spain harvesting is already underway and theyields obtained in Andalusia were recently reportedly inthe vicinity of only 0.8-1.0 T/ha, down sizably on the

year. We have reduced our estimate of this year’sSpanish sunflowerseed production to a seven-year lowof 0.76 Mn T, suggesting that the country’s importdemand for sunflowerseed and products will increasenext season.

Our updated assessment of the 2019/20 worldsunflowerseed crop is 52.1 Mn T, which is slightlybelow our June estimate but still the second largestvolume on record and only 0.4 Mn T below the bin-busting 2018/19 production.

Considering the record carry-over stocks, the year-on-year reduction in world sunflowerseed supplies willbe even smaller at 0.1 Mn T in 2019/20. This is likely toleave global crushings close to the record 2018/19 levelon the assumption that sunflowerseed inventories at theend of next season will decline somewhat, primarily inRussia and Ukraine.

COTTONSEEDA steep increase of world production by 3.2 Mn T is

currently anticipated for 2019/20, with the biggestincreases expected in the USA, India and Pakistan.However, stocks were reduced in 2018/19, curbing thesupply growth in the upcoming season. The US cottoncrop developed quite well so far but below normalmonsoon rainfall in India bears watching.

Australian cottonseed exports and crushings aredeclining pronouncedly this year owing to the poor cropin early 2019 and sharply rising direct feed use on thedomestic market. Australia stepped up cotton oilimports in recent months.

World crushings of cottonseed are forecasts toincrease by 0.9 Mn T in Oct/Sept 2019/20. The addi-tional supplies available for crushers will be curtailed bythe prospective uptrend of direct feed use in the US,Australia and other countries.

( Continued on page 368 )

COTTONSEED: World Supply & Demand ( Mn T )

19/20F 18/19 17/18 16/17 Op. Stocks 1.76* 2.47 1.89 1.72

Production 45.60* 42.45 44.50 39.06 C.I.S. . . . . . . . 2.24* 2.11 2.45 2.50 Africa . . . . . . . 3.35* 2.94 2.81 2.41 U.S.A. . . . . . . . 6.30* 5.11 5.83 4.87 Brazil . . . . . . . 3.89* 3.95 3.01 2.34 China, P.R. . . . 9.90* 10.10* 9.90* 8.60* India . . . . . . . . 11.20* 10.25* 11.80* 10.66* Pakistan . . . . . 3.90* 3.38* 3.59* 3.33* Australia . . . . . .80* .69 1.50 1.26

Total supply . . 47.36* 44.92 46.39 40.78

Crush (Oct/Sep) 33.43* 32.50* 32.65 29.88

Other use . . . . . 11.94* 10.66* 11.27 9.01 U.S.A.(Aug/Jly) 3.78* 3.21* 3.63 2.80

Ending stocks 1.99* 1.76* 2.47 1.89 U.S.A. (July 31) .52* .32* .45* .38*

SUNSEED : World Supply & Demand ( Mn T )

19/20F 18/19 17/18 16/17 Open’g stocks . . . 3.90* 3.58 3.67 3.32

Production . . . . . . 52.11* 52.51 49.16 49.69 EU-28 . . . . . . . . . . 9.95* 9.63 10.06 8.54 Russia . . . . . . . . . 12.40* 12.70* 11.00* 11.60* Ukraine . . . . . . . . . 15.00* 15.50* 13.50* 15.10* U.S.A. . . . . . . . . . . 1.04* .96 .97 1.20 Argentina . . . . . . . 3.60* 3.70* 3.40* 3.30* China,P.R. . . . . . . 2.50* 2.55* 2.58 2.61 Turkey . . . . . . . . . 1.57* 1.53* 1.70* 1.47*

Total supplies . . . . 56.01* 56.09 52.83 53.01

Crush (Sept/Aug) . . 47.30* 47.35* 44.47 44.60

Other use . . . . . . . . 4.87* 4.84* 4.78 4.74

End’g stocks . . . . . 3.84* 3.90* 3.58 3.67 EU-28 (July 31) . . .90* .86* .90 .77 Russia & Ukraine .80* .85* .54* .68* Argentina (Sep 30) 1.04* 1.08* .99* .67*

Stocks/usage . . . . 7.4% 7.5% 7.3% 7.4%


8 OILS

Demand Boost and Weakening Production Growth Brought Veg. OilPrices to Turning Point

World consumption seen increasing by 8.5 Mn T 2018/19, versus a production growth of 4.8 Mn T

Outlook 2019/20: Our current estimates for oilseedproduction and crushings as well as for palm oil arepointing to a further slowdown of the production growthto only around 3.8 Mn T next season, the smallestincrease in four years. The uptrend of palm oil produc-tion will lose momentum and seed oil production will notbe in a position to offset this.

The slowdown on the production side will affect themarket all the more after burdensome stocks have beenreduced in the course of the 2018/19 season. Totalvegetable oil supplies (opening stocks plus production)are expected to increase by only 3.8 Mn T next season,less than half the growth registered in the precedingthree seasons.

How good can consumption adjust to the tighteningsupplies? The efforts to promote biodiesel production inIndonesia and other countries are expected to continuenext year, pushing demand and raising prices of veg.oils. Policy makers may have to lower their biodieseltargets in order to mitigate both the looming productiondeficit and to moderate the probably unavoidable pricerally.

In today's analysis we assume an increase in worldconsumption of 5.4 Mn T in 2019/20, down from8.1–8.5 Mn T each in the preceding two seasons.Under this assumption, vegetable oil stocks are seendeclining by 1.2 Mn T and the stocks/usage ratio to fallto a multi-year low of 13.5%, against 14.5% estimatedin 2018/19.

Update 2018/19: Upward revisions have occurredboth in production and consumption of late, keepingfundamentals about unchanged. The growth of worldproduction is expected to diminish to 4.8 Mn T thisseason (versus 10.2 Mn T a year before) while theconsumption growth is likely to accelerate to 8.5 Mn T(versus 8.1 Mn T). The market is thus in transition fromample to tightening supplies this season.

The global trade volume is currently exceedingexpectations. World exports of eight oils are now seenreaching 87.1 Mn T in Oct/Sept 2018/19, up from 86.3Mn T expected two months ago and implying a steepincrease of 6.4 Mn T from last season, thereof 3.7 MnT in palm oil, 0.7 Mn T in soya oil and 1.4 Mn T insunflower oil.

The increase in total vegetable oil exports is led byIndonesia with 2.5 Mn T, followed by Malaysia (+1.5 MnT), Argentina (+1.2 Mn T) and Ukraine (+1.0 Mn T). Theincrease in Chinese vegetable oil imports is outstandingat an estimated 2.1–2.2 Mn T. Imports are expected toincrease by 0.7 Mn T and 0.6 Mn T in the EU and India,respectively.

Palm oil accounts for about 7.3 Mn T of the totalincrease in world consumption of eight oils by anestimated 8.5 Mn T this season whereas only a smallincrease of 0.3 Mn T is shaping up in soya oil and a

reduction of 0.1 Mn T is expected in rapeseed oil.The dominance of palm oil is due to Indonesia

where the boost of biodiesel production may cause anincrease of total vegetable oil consumption by morethan 3.6 Mn T this season. Indonesia will thus accountfor about 9% of world consumption, up from 6% fouryears ago.

The diminishing supply surplus is reflected in thedevelopment of stocks. On July 1 world stocks of eightoils were only 0.2 Mn T above a year ago, versus 0.8Mn T on April 1. By Oct 1 stocks may virtually matchthe year-ago level of 28.5 Mn T according to our currentestimates. This equals a decline of the stocks/usageratio from 15.1% in 2017/18 to 14.5% in 2018/19.

PALM OILPalm oil production turned out higher than ex-

pected in Jan/June 2019. We now estimate worldproduction at 76.2 Mn T in Oct/Sept 2018/19, up 0.6 MnT from our previous estimate six weeks ago. We madeupward revisions of 0.3 Mn T for Indonesia, 0.1 Mn Tfor Malaysia and by 0.2 Mn T for the rest of the world,primarily Thailand.

World production of palm oil is thus likely to increasepronouncedly by 4.2 Mn T or 6% in Oct/Sept 2018/19.We estimate output in Indonesia at 43.3 Mn T (against

8 VEGETABLE OILS: World Balance ( Mn T )O c t o b e r / S e p t e m b e r

19/20F 18/19 17/18 16/17 15/16 Op’g stocks 28.53* 28.54 24.92 23.77 29.05 Production 201.06* 197.27* 192.51 182.33 168.70 Change +1.9% +2.5% +5.6% +8.1% -1.9%

Imports . . . . 88.41* 86.73* 80.26 80.20 75.86 Exports . . . . 88.40* 87.10* 80.73 81.06 75.23

Consumption 202.27* 196.90* 188.43 180.32 174.61 Change +2.7% +4.5% +4.5% +3.3% +3.5%

End’g stocks 27.32* 28.53* 28.54 24.92 23.77

Stocks/use ratio 13.5% 14.5% 15.1% 13.8% 13.6%


40.5 Mn T last season), in Malaysia at 20.5 Mn T (19.7)and in the rest of the world at 12.4 Mn T (vs. 11.8 MnT).

But world consumption is growing even faster.Record quantities of palm oil are being used in thebiofuel industries in Indonesia, Malaysia and theEuropean Union. Also food demand for palm oil is risingsharply, primarily in India, China but also in many othercountries.

We estimate world consumption of palm oil at 76.1Mn T in Oct/Sept 2018/19, up substantially by 7.3 Mn Tor 10.7% from a year earlier.

But with world palm oil stocks unusually large at thestart of the season (in October 2018), total supplieswere still ample, making it possible to satisfy globalconsumption so far without sizably reducing stocks.Palm oil stocks declined in Malaysia and Indonesiafrom the record levels established in the last fewmonths of 2018, but are still comparatively large.Although palm oil consumption is accelerating, there iscurrently no supply concern.

This could change, however, in the months ahead ifproduction slows down and if consumption continues toincrease. Additional measures to promote biodiesel areplanned in Indonesia and Malaysia for next season.India will probably need to import larger quantities ofpalm oil for food in 2019/20 due to insufficient domesticvegetable oil production.

The outlook for Oct/Sept 2019/20 is for a consider-able slowing-down of the growth in world production ofpalm oil to 1.9 Mn T compared with year-on-yearincreases of 4.2 Mn T in 2018/19 and 5.2 Mn T in2017/18. We estimate production in Indonesia to rise by2.0 Mn T, while we forecast production in Malaysia tovirtually stagnate and in Thailand to decline by 0.1 MnT. Due to reduced plantings in recent years, there willbe a slowing-down in the growth of the mature area inIndonesia and Malaysia next year.

Palm oil consumption is likely to exceed productionin 2019/20, enforcing a decline in palm oil stocks.Demand is partly price-sensitive, primarily in the biofuelmarket. The required demand-rationing will have to beaccomplished via price adjustments. Higher prices willbe needed to reduce the competitiveness of palm oilrelative to fossil fuels.

In our current forecast we estimate world consump-tion of palm oil at around 79.0 Mn T in Oct/Sept2019/20, up by approximately 3.0 Mn T from a yearearlier. With our current estimates on world productionand trade, this requires a reduction of palm oil stocks by0.9 Mn T next season. For details see page 371.

World imports of palm oil will increase steeply to53.0 Mn T in Oct/Sept 2018/19, according to our currentforecast. This is up 3.9 Mn T from a year earlier. Wemade a slight upward revision from our previousforecast last month. In the table within this text we havesummarized palm oil exports of 9 major countries forSept/May 2018/19 as well as for the two precedingyears. These 9 countries account for 95% of worldexports. It is obvious that the biggest increases inexports have occurred to India and China. But in-creases were also noted to several other countries inAsia and Africa.

SOYA OILOutlook 2019/20: Ample supplies are in prospect

next season, given an expected production increase of1.8 Mn T, based on our tentative soybean crop andcrush estimates.

This should allow a further increase of global soyaoil exports by 0.3 Mn to a 4-year high of around 11.9Mn T. In Argentina the volumes required for biodieselproduction will remain a key swing factor for exportsupplies of soya oil.

We currently expect a growth in global soya oilconsumption in the vicinity of 1.8 Mn T in 2019/20,reflecting a normalization from the below-averageincrease of only 0.3 Mn T shaping up this season.

Update 2018/19: Following a stagnation inJan/March, world production of soya oil increased by0.2 Mn T from a year ago in April/June, but a decline ofthe same magnitude is anticipated in July/Sept, mainlyon account of China. Chinese soybean crushings weretemporarily quite large but low stocks and insufficientimports of soybeans will probably curtail soya oil outputin the near-term.

In the USA soya oil output declined by 2% inApril/June, partly reversing the pronounced year-on-year growth seen in the first half of the season. Lowerthan expected crushings were only partly offset by anuptrend of oil yields.

In Argentina crushings exceeded expectations andsoya oil output in Oct/Sept 2018/19 will probably be

9 Key Countries: Exports of Palm Oil (1000 T)Jan/May Sept / May

Exports of: 2019 2018 18/19 17/18 16/17Ivory Coast . 136 85 205 145 113Costa Rica . 106 91 175 151 100Guatemala . 259 226 635 534 485Honduras . . 147p 115 396p 366 320Colombia . 371 341 544 620 329Ecuador . . . 97 157 144 219 244Indonesia . 11086 10314 21713 19709 20199Malaysia . . . 7994 7105 13950 12946 11987Thailand . . . 223 294 248 539 30Total . . . . . . 20419 18728 38011 35229 33808

of which to:EU-28 . . . . . 2807 2835 5220 5407 5383

Russia . . . . 247 286 520 499 429Ukraine . . . . 151 144 243 275 214

Africa 2809 2577 5360 4884 4973Egypt . . . . . 507 418 856 929 1078Kenya . . . . . 183 170 494 346 257Nigeria . . . . 223 152 405 337 384S.Africa.Rep. 243 203 401 370 384

America 1298 1287 2296 2319 2103U.S.A. . . . . . 648 638 1177 1197 1055Mexico . . . . 225 253 375 403 387

Asia 12971 11450 24108 21578 20438Bangladesh 652 783 1228 1319 1082China, PR . . 2739 1986 4998 4263 3729India . . . . . . 4000 3378 7423 6461 6764Iran . . . . . . . 189 155 421 321 382Japan . . . . . 329 303 589 540 496South Korea 327 341 537 493 447Malaysia . . . 606 275 1146 473 661Pakistan . . . 1300 1404 2710 2563 2350Philippines . 485 451 947 915 792Singapore . . 370 376 555 637 598Turkey . . . . 377 463 612 812 564Vietnam . . . 360 305 679 635 560


boosted by 0.5–0.6 Mn T from last season’s low level.This set the stage for a steep increase of Argentinesoya oil exports to 1.5 Mn T in April/June, up 46% onthe year. Exports in the full season are pegged at 5.3Mn T, up 1.0 Mn T or 24%. Domestic soya oil use isseen increasing in April/Sept owing to recoveringbiodiesel exports to the EU-28, but supplies are suffi-ciently large to keep soya oil exports in the vicinity of1.4 Mn T in July/Sept.

The strong competition from Argentina led to adownward revision of US soya oil exports to 0.88 Mn Tfor the current season, 21% less than a year ago.

The large Argentine shipments resulted in a majorincrease of soya oil imports in April/June, primarily inthe five North African countries where this season’stotal import volume is now seen approaching athree-year high of 1.7 Mn T. In India we expect apronounced uptrend of soya oil imports in July/Sept,raising arrivals above the year-ago level to an esti-mated 3.15 Mn T in Oct/Sept.

Chinese soya oil imports trailed expectations andthe year-ago level at 120 Thd T in April/June. Assumingan uptrend this quarter, China may raise soya oilimports from 0.5 Mn in 2017/18 to 0.9 Mn T this sea-son.

In Bangladesh booming imports and crushings ofsoybeans and rapeseed are somewhat curtailing thegrowth of soya oil imports which are still pegged at arecord 1.02 Mn T this season.

SUNFLOWER OILOutlook 2019/20: World sun oil supplies are likely

to turn out smaller than assumed hitherto but will still berecord high and up 0.3 Mn on the year, benefiting fromhuge stocks to be carried over from 2018/19.

We have increased our forecast of sun oil productionin the EU but reduced it for Ukraine and Argentina. Thisnecessitated a downward revision of world exports to11.0 Mn T in 2019/20, still the second largest volumeon record.

The recent further increase of old-crop sun oil priceshas pulled up new-crop quotations at the Black Seaports. Yet, the old/new-crop inverse has widened to US-$ 50-70, stimulating additional purchases for shipmentin the last quarter of 2019 and even in early 2020.

Sharply above-average supplies shaping up nextseason imply that sun oil will again have to compete fordemand with rape oil, soya oil and palm oil and will thusfollow global veg. oil price trends. We now see worldsun oil consumption in the vicinity of a record 20.0 MnT in 2019/20, which can only be attained if prices staycompetitive throughout most of 2019/20.

Update 2018/19: Very strong import demand fromseveral countries resulted in higher than expected worldsun oil production and exports in May and June, con-tributing to the recent price rally on the world market.

We now assume that Russian sun oil shipments willreach a new high of 2.6 Mn T in Oct/Sept 2018/19, up0.3 Mn on the year, whereas ending stocks of bothsunflowerseed and oil will be smaller than estimatedthus far, albeit probably still up sizably from a yearbefore.

Russian large- and medium-sized crushers pro-duced 431 Mn T of sun oil in June, implying the fourthconsecutive year-on-year increase and contrasting withthe 4% reduction in Oct/Febr 2018/19.

Russian exports of sun oil were impressive at 250-300 Thd T in June, according to preliminary data, andthus not far below the monthly record of 320 Thd Tregistered in May 2019. The shipment pace reportedlystayed robust in the first half of July. The neighbouringCIS countries as well as Iran and Turkey are the keygrowth markets this season.

For Ukraine we have left our estimate of this sea-son’s sun oil exports unchanged at a record 6.1 Mn T,up 0.8 Mn on the year, the bulk of which is probablyalready marketed.

Sun oil production of Ukrainian large- and medium-sized crushers continued to exceed the year-earliervolume in June, boosting the cumulation since Oct2018 by 0.5 Mn T. Shipments also stayed robust albeitdeclining seasonally to 467 Thd T in June. The year-on-year increase in exports of Ukrainian sun oil narrowedfrom 0.3 Mn T each in Oct/Dec 2018 and Jan/Mar 2019to 0.1 Mn T in Apr/June.

In today’s analysis we estimate world exports of sunoil at a new high of 11.3 Mn T in Oct/Sept 2018/19,reflecting a boost by 1.4 Mn from 2017/18. Larger thanpreviously assumed increases are now likely to occurin shipments to the EU (curtailing domestic processingof sunflowerseed), Iran, Iraq, China and a few othercountries this season. However, exports to India will fallshort of expectations and decline on the year asconsumers in the world’s largest veg. oil importingcountry are increasingly shifting to palm oil.

RAPESEED OILOutlook 2019/20: We have reduced our estimate of

global rapeseed oil output to 25.2 Mn T for 2019/20,implying a decline by 0.1 Mn T, the second in a row.Primarily crop losses in Europe were responsible for thedownward revision. Owing to the further decline ofdomestic rapeseed production and probably insufficientimport supplies, a significant further reduction ofrapeseed oil production is shaping up primarily in theEU-28, tightening supplies for biodiesel producers andfor the food sector.

The ongoing reduction of global rapeseed oil stocksin 2018/19 will additionally squeeze supplies nextseason. As a result, world consumption may decline by0.2–0.3 Mn T in 2019/20.

Update 2018/19: World production of rapeseed oilis estimated at 25.3 Mn T in Oct/Sept 2018/19, 0.3 MnT less than a year ago. Production is expected to turnout somewhat larger than expected in Canada, viz. at4.0 Mn T, but is curtailed by the year-on-year decline ofcanola oil exports. Our rapeseed oil production estimate

RUSSIA & UKRAINE: Sun Oil Output (a) & Exports(1000 T) J u n e April/June Oct/June

Production 2019 2018 2019 2018 18/19 17/18

Russia . . . . 431 351 1303 1102 3998 3805Ukraine . . . . 421 350 1440 1240 4504 3982Total . . . . . . 852 701 2743 2342 8502 7787

ExportsRussia . . . . 270* 203 834* 648 2118* 1857Ukraine . . . . 467 435 1552 1456 4949 4272Total . . . . . . 737 638 2386 2104 7067 6129

(a) Industrial output, considered incomplete.


has also been increased slightly for the EU-28 where arecovery to the year-ago level occurred in April/June.

In China dwindling rapeseed imports are curbingproduction of rapeseed oil, which is now seen decliningby 0.2 Mn T on the year this season. We lifted ourestimate of Chinese rapeseed oil imports to a record1.43 Mn T, roughly one third more than last season.While Chinese imports from Canada declined inMarch/May, those from Russia, Kazakhstan and theUAE increased significantly.

Rapeseed oil output was also revised downward inIndia. The pronounced year-on-year increase inOct/March appears to be followed by a decline inApril/Sept 2019. Indian rapeseed oil imports were at astandstill in recent months. This curtailed rapeseed oiloutput in UAE but the decline was mitigated by theuptrend of exports to China.

Our estimate of world consumption remains un-changed at 25.6 Mn T, 0.1 Mn T less than a year ago.Consumption is seen rising by 40 Thd to 180 Thd T inBangladesh which recently took advantage of ampleCanadian export supplies of canola, resulting from thetrade conflict with China.

PALMKERNEL OILOutlook 2019/20: The effect of diminishing growth

in the mature oil palm area will be increasingly felt nextseason. The growth of world production is expected todiminish to around 4%, versus 5–11% in the mostrecent three seasons. The production growth will slowdown primarily in the key countries Indonesia andMalaysia.

The palmkernel oil market is characterized by ampleto burdensome stocks so far in 2018/19 and this factorwill still be felt at least at the beginning of next season.With record stocks expected as of Oct 1, supplies willbe sufficient for a consumption growth in the vicinity of0.5–0.6 Mn T, the largest increase since 2012/13.

Update 2018/19: Prices of crude palmkernel oil inRotterdam this week rallied by 13%, probably indicatingthat the downtrend seen in recent weeks has come toan end. The price competitiveness of palmkernel oil hasbeen outstanding with the premium over crude palm oilnarrowing to only around US-$ 50 per tonne in Juneand July, versus around $ 250–260 a year ago. How-ever, palmkernel oil stocks are still quite large and up0.2 Mn T on the year at the end of June, probablylimiting the prospective further recovery of palmkerneloil prices at least in the near-term.

The growth of palmkernel oil output is seen slowingdown from 7% in Jan/March to 4–5% each in April/Juneand July/Sept 2019. Cumulative output is expected toincrease by 0.4 Mn to a record 8.0 Mn T this season.Together with ample carry-in stocks and rather sluggishdemand this contributed to the decline of prices tomulti-year lows earlier this month.

World imports had still declined on the year inJan/March 2019. However, the trade volume picked upsignificantly last quarter and is expected to exceed theyear-ago level by roughly 0.2 Mn T in April/Sept 2019,reducing the supply surplus in the producing countries.In April/June, imports of palmkernel oil increased byabout 50 Thd T in China and by an estimated 30 Thd Tin the EU-28.

In Malaysia palmkernel oil stocks declined in thepast two months owing to a pick-up of exports, butinventories were still unusually large at 439 Thd T onJuly 1. We expect Malaysian exports of palmkernel oilto increase by 3.2% to 1.01 Mn T and domestic use by3.7% to 1.55 Mn T in 2018/19. In Indonesia the ex-pected increases of exports and domestic use are inthe vicinity of 16% and 9%, respectively.

COCONUT OILThe growth of production, trade and consumption of

coconut oil in 2019 appears to be larger than previouslythought. The decline of coconut oil prices in Rotterdamto only an average US-$/T 643 in June, a 10-year low,has promoted demand primarily in the EU-28. Thenagain, the price premium versus palmkernel oil haswidened in recent weeks, pointing to subsiding supplypressure.

World exports of coconut oil rocketed by 0.3 Mn T or20% to 1.6 Mn T in Oct/June 2018/19 according topreliminary data. In particular the Philippines boostedexports in April/June and their exports are now seenreaching 1.04 Mn T in Oct/Sept 2018/19, up from 0.86Mn T each in the preceding two seasons. However,Philippine copra meal exports were at least 10% lowerthan a year ago in Oct/June, suggesting that the boostin oil exports came partly at the expense of domesticuse and did not necessarily reflect larger than expectedproduction. This is supported by the further uptrend ofpalm oil imports which are seen rising to a record 1.2Mn T this season.

The large volumes reported so far have promptedan upward revision of our EU coconut oil import esti-mate to 660 Thd T in Oct/Sept 2018/19, 12% more thana year ago. This contrasts with a further year-on-yeardecline of US imports in Oct/May. US palmkernel oilimports also declined pronouncedly, resulting in asignificant reduction of US lauric oil consumption.

It is interesting to note that Indonesian coconut oilimports more than doubled to 26 Thd T in Jan/May2019, confirming rising domestic use and probablyfading growth in Indonesian coconut oil output.

We peg world consumption of coconut oil at 2.87 MnT in 2018/19, up 0.2 Mn T or 7–8%.

COCONUT OIL : World Supply & DemandO c t / S e p t

(Mn T) 18/19F 17/18 16/17 15/16 14/15 Opening stocks .44* .34* .34* .42* .36*Production 2.91* 2.75* 2.48* 2.59* 2.97*

Imports 2.01* 1.77 1.64 1.66 1.95 EU-28 . . . . . . . .66* .59 .49 .54 .55 U.S.A. . . . . . . . .47* .45 .47 .52 .57 China . . . . . . . . .16* .14 .13 .14 .14

Exports 2.03* 1.76 1.67 1.64 1.96 Philippines . . . . 1.04* .85 .85 .69 .86 Indonesia . . . . . .65* .64 .52 .63 .78

Disapp. . . . . . . 2.87* 2.67* 2.45* 2.69* 2.89* .Ending stocks .46* .44* .34* .34* .42*


8 OILMEALS

World Soya Meal Production Revised Downward But Still LargeEnough To Cover Demand

Diminishing growth in output of seven other oilmeals is likely to contrast with a pronounced recovery of soyameal production in 2019/20

SOYA MEALOutlook 2019/20: World production is forecast to

increase to 243.5 Mn T next season, driven by thepronounced recovery in Argentina. Yet, this is 0.8 Mn Tbelow our June assessment because of the downwardrevision on account of the US. We now estimate worldexports of soya meal at 67.7 Mn T in Oct/Sept 2019/20,0.2 Mn below our June forecast but still up 1.5 Mn onthe year.

We assume that Argentine production and exportsof soya meal will rise further in Oct/Sept 2019/20 evenif the soybean crop to be harvested in early 2020 issomewhat smaller than a year before. Large Argentinesupplies will therefore continue to undercut producersin many soya meal consuming countries and result instiff competition with US and Brazilian suppliers.

The reaction of the Chinese livestock industry to theongoing African Swine Fever disease is one of the keyuncertainties in 2019/20. We currently assume that thesituation in the Chinese pig sector will stabilize, whilethe growth in beef, poultry and aquaculture industrieswill probably accelerate, but the timing is a majorvariable to watch. Following a setback of 3.2 Mn T thisseason, we tentatively peg world consumption of soyameal at 243.0 Mn T in 2019/20, up 8.9 Mn on the year.

Update 2018/19: We have reduced our estimate ofworld soya meal production to 233.1 Mn T, implying a5.4 Mn setback from 2017/18. The US, Brazil and Indiaaccount for the bulk of the downward revision, contrast-ing with higher output in Argentina, China and a fewother countries. Worth noting is that we have raised ourassessment of Chinese soya meal production also forthe period from 2014/15 until 2017/18, so that the year-on-year reduction in 2018/19 is now seen at 9.8 Mn T(compared with 6.9 Mn T estimated in June).

With sizable downward revisions on account of theUS and India, we now peg this season’s world exportsof soya meal at 66.3 Mn T, down 0.3 Mn from our Juneassessment but still implying a growth from 65.2 Mn Tin 2017/18. We have raised our estimates of Argentineand Chinese shipments this season.

7 OTHER OILMEALSWorld production of seven oilmeals other than soya

meal is likely to rise further in 2019/20, but the growthrate will probably diminish to only 0.4 Mn T (vs. 0.8 MnT in 2018/19, 3.7 Mn T in 2017/18 and 4.4 Mn T in2016/17). The bulk of next season’s increase is ex-pected to be on account of cotton meal and palmkernelmeal, while output of groundnut meal and sun meal isforecast to stagnate and that of rape meal, copra mealand fish meal to even decline.

We estimate world exports of 7 oilmeals at 27.5 MnT in 2019/20, up 0.1-0.2 Mn on the year compared withan increase of 1.7 Mn T shaping up this season. The

considerable slowing-down is primarily due to the factthat global sun meal shipments are likely to decline,following a boost of 1.0-1.1 Mn T in 2018/19.

World consumption of 7 oilmeals other than soyameal will probably rise from 98.6 Mn T to 99.0 Mn T inOct/Sept 2019/20, implying the smallest increase sincethe reduction in 2015/16.

Sunflower meal: World production is likely to beslightly smaller than assumed hitherto in 2019/20 withhigher output in the EU more than offset by downwardrevisions on account of Ukraine and Argentina. At anestimated 21.1 Mn T output will stay at the record2018/19 level, while the huge carry-over stocks willprobably even allow a further, albeit insignificant,increase of world sun meal consumption.

The world trade volume of sun meal is expected tobe constrained in 2019/20 by the prospective smallersunflowerseed crops in Russia and Ukraine, even moreso if the Russian poultry sector starts to recover,supporting domestic usage of sun meal. Our updatedestimate of next season’s world sun meal exports is at

8 OILMEALS: World Supply & Demand ( Mn T )Forecast October / September

Grand total 19/20F 18/19 17/18 16/17 15/16

Op. stocks 11.04* 12.18 11.08 10.07 10.37 Production 342.41* 331.54* 336.21 319.59 306.95 Change +3.3% -1.4% +5.2% +4.1% +1.0%

Imports 94.97* 93.55* 90.46 89.73 88.93 Exports 95.18* 93.58* 90.85 89.91 89.26

Consumption 341.96* 332.65* 334.72 318.41 306.90 Change +2.8% -0.6% +5.1% +3.7% +1.7%

End’g stocks 11.27* 11.04* 12.18 11.08 10.07

Soya mealOp. stocks 8.79* 9.97 9.06 8.35 8.16 Production 243.52* 233.06* 238.50 225.57 217.28 Change +4.5% -2.3% +5.7% +3.8% +4.4%

Imports 67.50* 66.07* 64.87 64.79 66.02 Exports 67.70* 66.25* 65.21 64.82 66.43

Consumption 243.00* 234.06* 237.25 224.84 216.68 Change +3.8% -1.3% 5.5% +3.8% +5.1%

End’g stocks 9.11* 8.79* 9.97 9.06 8.35

7 oth. mealsOp. stocks 2.25* 2.21 2.02 1.72 2.21 Production 98.89* 98.48* 97.71 94.02 89.67 Change +0.4% +0.8% +3.9% +4.9% -6.3%

Imports 27.47* 27.48* 25.59 24.94 22.91 Exports 27.48* 27.33* 25.64 25.09 22.83

Consumption 98.96* 98.59* 97.47 93.57 90.22 Change +0.4% +1.2% +4.2% +3.7% -5.7%

End’g stocks 2.16* 2.25* 2.21 2.02 1.72


7.8 Mn T down 0.2 Mn on the year but still implies thesecond largest volume on record.

Due to higher than expected crushings and sun oilimport demand we have raised our estimate of worldsun meal production to 21.1 Mn T in 2018/19. Whileoutput in the EU is now seen trailing our June assess-ment, this is more than offset by upward revisions onaccount of Russia, Ukraine and Turkey, the latterbenefiting from higher than previously assumed importsof sunflowerseed.

As a result of the smaller production we havereduced our estimate of EU sun meal exports whileimports are now seen recovering pronouncedly from ayear before in Apr/July (following the reduction inOct/Mar 2018/19). While the cumulation since Oct 2018is still below the year-earlier volume, we expect EU sunmeal imports for the full season to rise by 0.1 Mn froma year before to 3.6 Mn T.

Exports of Ukrainian sun meal to China were at 102Thd T in June again high and up sharply from compara-ble 2018, leading us to revise our Chinese importestimate in the full season to a record 1.0 Mn T. At thesame time, we have made downward revisions forseveral CIS countries, Morocco and Saudi Arabia.

Rapeseed meal: The EU rape meal balance willcontinue to tighten in 2019/20 and the productionsetback in the EU will probably account for the bulk ofthe assumed reduction in world output of rapeseed &canola meals. Besides, the level of Chinese productionis highly uncertain at the moment owing to the stillunresolved trade conflict with Canada curtailingChinese imports and crushings of canola.

EU rape meal import demand is likely to rise furthernext season, benefiting rapeseed crushers and rapemeal exporters in the CIS countries. The prospectivegrowth of the trade flows between Russia, Belarus andUkraine on the one hand and several EU memberstates on the other is expected to help prevent asetback in global exports and imports of rape meal in2019/20. At an estimated 7.0 Mn T the world tradevolume will be up slightly, while production and con-sumption are forecast to decline by 0.2 Mn T and 0.3Mn T, respectively.

We have reduced our estimate of rape meal produc-tion in China and India but raised it for Canada in2018/19, resulting in almost unchanged output on aworld basis. Production is seen rising seasonally inJuly/Sept 2019 but is likely to continue to fall short ofthe year-ago volume, primarily due to low outputshaping up in China and India, more than offsetting theassumed growth in the CIS countries (includingUkraine).

While we have raised our assessment of Canadiancanola meal exports, the sizable downward revision inIndian shipments is expected to reduce the global tradevolume below our June estimate this season. SmallerIndian exports will reduce imports of several countriesin Asia, with South Korea, Thailand and Vietnam thekey buyers of Indian rape meal.

At the same time, Chinese imports of rape meal willprobably stay elevated unless restrictions are imposedon arrivals from Canada. We also expect large vol-umes of rape meal to reach EU ports in July/Sept 2019.

INDIAExports of oilmeals suffered a major blow and

probably dwindled to only around 0.3 Mn T in April/June2019, down from 1.1 Mn T in Jan/March and 0.7 Mn Ta year ago. Exports of soya meal were curbed to onlyaround 100 Thd T, the smallest quarterly volume inmore than two years.

Indian soya meal prices rallied in February andMarch, driven by large exports to Iran. With growingcompetition from South America the price premium ofIndian soya meal versus Argentine widened to US-$120–150 in recent weeks, making Indian meal uncom-petitive. Iran, the key customer for India at the start ofthe year, shifted to soya meal from Argentina and Brazilin recent months.

Under these conditions, Indian oilmeal exports willstay small in the foreseeable future and reach at best0.4 Mn T in July/Sept 2019, a three-year low.

Declining exports have squeezed the crush volumesin India in recent months, contributing to low vegetableoil stocks and raising Indian import requirements in thenear-term.

Indian soybean production prospects havedeteriorated. The 2019 crop will probably declinesizeably as a result of partly insufficient rainfall as wellas growing competition for acreage from corn.

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