Despite Winter Kill, A Rebound in EU-27 Rapeseed Production

An Expert's View about Cereals, Leguminous Crops, Oil Seeds in France

Posted on: 23 Apr 2012

Despite a reduction in acreage, a modest rebound in rapeseed production is anticipated.

THIS REPORT CONTAINS ASSESSMENTS OF COMMODITY AND TRADE ISSUES MADE BY USDA STAFF AND NOT NECESSARILY STATEMENTS OF OFFICIAL U.S. GOVERNMENT POLICY Required Report - public distribution Date: 4/12/2012 GAIN Report Number: E70016 EU-27 Oilseeds and Products Annual Despite Winter Kill, Modest Rebound in EU-27 Rapeseed Production Approved By: Paul Spencer Prepared By: Roswitha Krautgartner, Marie-Cecile Henard, Leif Erik Rehder, Mila Boshnakova, Monica Dobrescu, Bob Flach, Jennifer Wilson, Asa Wideback, Ornella Bettini, Marta Guerrero, Karin Bendz, and the group of FAS oilseeds specialists in the EU Report Highlights: Total EU-27 oilseeds production is expected to be stable, reaching about 29 million metric tons (MMT) in marketing year (MY) 2012/13. Despite a reduction in acreage, a modest rebound in rapeseed production is anticipated. Total EU-27 oilseeds area is forecast to decrease by 1.8 percent and is expected to total 11.4 million hectares (ha). Total use of vegetable oils is forecast to increase by 0.7 percent mainly due to increased food use and stable biofuels use. Oilseeds meals will see marginally less use in animal feed due to ample domestic supplies of wheat and corn. Executive Summary: Coordinator: Roswitha Krautgartner, FAS/Vienna Consumption The EU -27 is dependent on imported oilseeds, oilseed (protein) meals and vegetable oils. This is especially true for palm oil (no domestic production) and soybeans (very limited domestic production). In addition about 70 percent of soybean meal and more than 40 percent of sunflower meal is imported. An exception is rapeseed, which is largely produced and consumed domestically. In MY 2012/13, total oilseed meal consumption is projected to decline somewhat (down 0.3 percent). Due to ample domestic supplies of wheat and corn, fewer oilseeds meals are expected to be used in animal feed. However, increased domestic supplies of sunflower seed and good sunflower seed crush margins will lead to increased use of sunflower meal in feed rations. Due to higher availability the use of rapeseed meal is also expected to rebound. The increased feed use of sunflower meal and rapeseed meal will come at the expense of soybean meal. Total use of vegetable oils is forecast to increase by 0.7 percent due to higher demand in the food industry. Biodiesel production is the major use of rapeseed oil and is expected to remain stable in MY 2012/13. Use of sunflower oil, palm oil, animal fats and recycled oils for biofuels production is anticipated to increase whereas soybean oils will decline. The use of palm oil for biofuel is forecast to increase particularly in The Netherlands, which has a new biofuel plant in Rotterdam. Production Expectations for total EU-27 oilseeds production in MY 2012/13 are for fairly stable production reaching about 29 MMT. Total oilseeds crush is forecast to fall by 0.6 percent to 40.8 MMT, which is in line with flat oilseed production and an expected decrease in imports of soybeans due to lower demand for soybean meal in animal feed. A smaller crush also lowers oilseed meal and oil production, which are estimated at 25.5 MMT and 16.5 MMT respectively. Total EU-27 oilseeds area in MY 2012/13 is forecast to total 11.4 million ha, a 1.8 percent decline over last year. The decrease is mainly due to a 4 percent decrease rapeseed acreage caused by unfavorably wet planting conditions (Denmark), winterkill (mainly in Bulgaria and Hungary), and drought (Romania). Although on reduced acreage, a modest overall rebound in rapeseed production is anticipated. A marginal increase in sunflower area is projected. Following last year?s high sunflower seed yields, more conservative expectations in MY 2012/13 point to a decrease of 4 percent in production. Policy Various popular social movements in the EU are finding their way into the political arena in ways that impact oilseeds policy and trade. For example, popular concern about ?sustainability? and ?food versus fuel? contributed to EU?s Renewable Energy Directive (RED), which lays out specific sustainability requirements for biofuels to be eligible for financial support. These include minimum greenhouse gas (GHG) emissions reductions and economic and social criteria. The RED entered into force on June 25, 2009 and was to be transposed into national legislation by December 5, 2010. In practice it is being implemented piecemeal by EU Member States (MS). Introduction This report presents the outlook for oilseeds in the EU-27. The data in this report is based on the views of Foreign Agricultural Service (FAS) analysts in the EU and is not official USDA data. This report was a group effort of the following FAS analysts: Stefano Baldi FAS/Rome covering Italy Karin Bendz USEU/FAS Brussels covering EU policy Ornella Bettini FAS/Rome covering Greece Mila Boshnakova FAS/Sofia covering Bulgaria Bob Flach FAS/The Hague covering the Benelux Countries Marta Guerrero FAS/Madrid covering Spain and Portugal Marie-Cecile Henard FAS/Paris covering France Monica Dobrescu FAS/Bucharest covering Romania Roswitha Krautgartner FAS/Vienna covering Austria and Slovenia Jana Mikulasova FAS/Prague covering the Czech Republic and Slovakia, Ferenc Nemes FAS/Budapest covering Hungary Leif Erik Rehder FAS/Berlin covering Germany Piotr Rucinski FAS/Warsaw covering Poland, Estonia, Latvia, and Lithuania Asa Wideback FAS/Stockholm covering Sweden, Finland, and Denmark Jennifer Wilson FAS/London covering the U.K. and Ireland The FAS EU-27 oilseeds reporting team would like to thank Yoonhee Macke from FAS/OGA for her valuable input and support. Abbreviations used in this report Benelux = Belgium, the Netherlands, and Luxembourg CAP = EU common agricultural policy CY = Calendar year e = Estimate (of a value/number for the current, not yet completed, marketing year) EU-27 = European Union of 27 member states (Austria, Belgium, Bulgaria, Cyprus, Czech Republic, Denmark, Estonia, France, Finland, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, United Kingdom) f = Forecast (of a value/number for the next, not yet started, marketing year) FSW Feed, Seed, Waste Ha = Hectares GE = Genetically engineered / Genetically engineered organisms GHG = Greenhouse gas MT = Metric ton (1000 kg) MMT = Million metric tons MS = EU Member State(s) MY = Marketing year NUTS2 = Nomenclature of Units for Territorial Statistics level 2 = code for regions within a country SME = Soybean meal equivalent U.K. = United Kingdom U.A.E. = United Arabic Emirates U.S. = The United States of America In this report "biofuel" includes only biofuels used in the transport sector. Biomass/biofuel used for electricity production or other technical uses such as lubricants or in detergents are included in "industrial use". The marketing years used in this report are: January - December Copra complex Palm Kernel complex Palm Oil Fish Meal July-June Rapeseed complex October -September Soybean complex Sunflower complex Cottonseed complex Peanut complex November - October Olive Oil Table of Contents 1. Total Oilseeds 2. Soybean Complex 3. Rapeseed Complex 4. Sunflower Complex 5. Palm Kernel Complex 6. Palm Oil 7. Peanut Complex 8. Fish Meal 9. Copra Complex 10. Cottons Seed Complex 11. Olive Oil 12. Policy 1. Total Oilseeds Coordinator: Roswitha Krautgartner, FAS/Vienna Total Oilseeds ? Seeds Commodity: Total Oilseeds (1000 HA / 1000 MT) Marketing Year MY 2009/10 MY 2009/10 MY 2010/11 MY 2010/11 MY 2011/12 USDA official Post New USDA official Post New Post New Area 11,414 11,378 11,700 11,609 11,403 Beginning Stocks 2,793 2,788 2,620 2,418 2,286 Production 29,049 29,099 28,879 28,998 29,006 Extra EU27 imports 16,264 16,254 15,995 16,124 15,723 TOTAL SUPPLY 48,103 48,141 47,494 47,540 47,015 Extra EU27 exports 871 862 644 823 861 Crush 41,002 41,451 40,405 40,996 40,765 Food Use 1,064 1,051 1,094 1,077 1,082 Feed, Seed, Waste 2,546 2,359 2,605 2,358 2,356 TOTAL DOMESTIC USE 44,612 44,861 44,104 44,431 44,203 Ending Stocks 2,620 2,418 2,746 2,286 1,951 TOTAL DISTRIBUTION 48,103 48,141 47,494 47,540 47,015 Source: FAS EU-27 EU-27 Total Oilseeds Area Total EU-27 oilseeds area in MY 2012/13 is forecast to decrease by 1.8 percent and is expected to total 11.4 million ha. The 4 percent decline rapeseed acreage is caused by unfavorably wet planting conditions (Denmark), winterkill (mainly in Bulgaria and Hungary), and drought (Romania). A marginal increase of sunflower area is projected due to re-sowing of rapeseed winterkill areas. Soybeans, which are not widely planted in the EU, are also expected to decline by 5 percent. Note: The years refer to the calendar year in which the harvest occurs (e.g. 2010 = harvested in CY 2010, marketed in MY 2010/11) Source: FAS EU-27 EU-27 Total Oilseeds Production Expectations for total EU-27 oilseeds production in MY 2012/13 are for stable production reaching about 29 MMT. Although on reduced acreage, a modest rebound in rapeseed production is anticipated. Last year?s high yields for sunflower seeds are not expected again this year and a 4 percent decline is forecast. Note: The years refer to the calendar year in which the harvest occurs (e.g. 2010 = harvested in CY 2010, marketed in MY 2010/11) Source: FAS EU-27 EU-27 Total Oilseeds Crush Total oilseeds crush in MY 2012/13 is forecast to fall by 0.6 percent to 40.8 MMT. The lower crush is in line with slightly smaller total oilseed production and an expected decrease in imports of soybeans due to lower demand for soybean meal in animal feed. Note: Crush for olive oil production is not included Source: FAS EU-27 Total oilseed meals PSD Commodity: Total Meals (1000 MT) Marketing Year MY 2009/10 MY 2009/10 MY 2010/11 MY 2010/11 MY 2011/12 USDA official Post New USDA official Post New Post New Crush 41,002 41,451 40,405 40,996 40,765 Extraction Rate Beginning Stocks 661 886 798 1,253 1,256 Production 26,503 26,043 25,986 25,770 25,545 Extra EU27 imports 26,872 26,711 28,051 26,705 26,745 TOTAL SUPPLY 54,036 53,640 54,835 53,728 53,546 Extra EU27 exports 1,195 1,206 1,100 1,070 1,080 Industrial 701 266 796 265 266 Food Use 32 32 32 32 30 Feed, Seed, Waste 51,224 50,883 52,010 51,105 50,940 TOTAL DOMESTIC USE 52,043 51,181 52,833 51,402 51,236 Ending Stocks 798 1,253 902 1,256 1,230 TOTAL DISTRIBUTION 54,036 53,640 54,835 53,728 53,546 Source: FAS EU-27 The marginally lower crush in MY 2012/13 will cause total oilseeds meal production to go down by about 0.9 percent to 25.5 MMT. The 0.3 percent decreased supply of 53.5 MMT is the result of lower production and almost flat total imports, which are driven by declining demand in the animal feed sector. The reason for reduced feed use of oilseeds meals is ample domestic supply and increased use of wheat and corn in feed rations. In MY 2011/12, oilseeds meal production is estimated to decline by 1 percent, a result of lower crushing due to lower oilseeds production and lower oilseeds imports compared to the previous marketing year. Source: FAS EU-27 Source: FAS EU-27 Total Oils PSD Commodity: Total Oils (1000 MT) Marketing Year MY 2010/11 MY 2010/11 MY 2011/12 MY 2011/12 MY 2012/13 USDA official Post New USDA official Post New Post New Crush 40,977 41,426 40,380 40,971 40,740 Extraction Rate Beginning Stocks 2,109 2,198 1,075 1,324 1,443 Production 16,424 16,538 16,376 16,650 16,484 Extra EU27 imports 8,404 8,109 9,718 9,221 9,211 TOTAL SUPPLY 26,937 26,848 27,170 27,195 27,138 Extra EU27 exports 1,560 1,562 1,285 1,424 1,419 Industrial 11,170 2,893 11,476 3,176 3,230 Biofuels 0 8,288 0 8,230 8,240 Food Use 12,727 12,351 12,851 12,492 12,589 Feed, Seed, Waste 404 430 389 430 430 TOTAL DOMESTIC USE 24,301 23,962 24,716 24,328 24,489 Ending Stocks 1,076 1,324 1,169 1,443 1,230 TOTAL DISTRIBUTION 26,937 26,848 27,170 27,195 27,138 Source: FAS EU-27 In line with reduced crush total oilseeds oil production in MY 2012/13 is expected to be down by 1 percent to 16.5 MMT. Food use is still the major use of oilseeds oils in the EU but biofuels and other industrial use are now almost as high. Total domestic use of oilseed oils is expected to increase by 0.7 percent to 24.5 MMT. While food use is forecast to increase by 0.8 percent, biofuels use will remain almost flat. The use of rapeseed oil for the production of biofuels is expected to remain stable whereas the biofuels use of sunflower and palm oil is forecast to rise at the expense of soybean oil. Rapeseed oil remains to be the primary feedstock for biodiesel processing, accounting for about 77 percent of raw plant oil feedstock, while the percentage of soybean oil is estimated at 11.2 percent, palm oil at 9.1 percent, and sunflower oil at 2.7 percent. Recycled waste oils of animal and plant origin are estimated to play an increasing role as biodiesel feedstock. Source: FAS EU-27 Source: Global Trade Atlas Note: HS code (38249091) was introduced in 2007. No specific trade data for biodiesel was available from previous years. Source: FAS EU-27 2. Soybean Complex Coordinator: Marie-Cecile Henard/FAS Paris The European Union is a marginal producer of soybeans, while soybean meal is the dominant source of proteins in livestock, dairy, and poultry feed rations. As the EU is a leading producer of meat and dairy products in the world, imports of soybeans and soybean meal are both massive and crucial for the European feed and food industry. Oilseed, Soybean EU 2010/2011 2011/2012 2012/2013 -27 Market Year Begin: Oct Market Year Begin: Oct Market Year Begin: Oct 2010 2011 2012 USDA New USDA New USDA New Official Post Official Post Official Post Area Planted 375 371 425 420 400 Area Harvested 375 371 420 420 400 Beginning Stocks 546 546 539 302 222 Production 1,048 1,044 1,220 1,120 1,110 MY Imports 12,465 12,483 11,000 12,000 11,700 MY Imp. from U.S. 3,174 3,174 700 3,000 3,000 MY Imp. from EU 0 0 0 0 0 Total Supply 14,059 14,073 12,759 13,422 13,032 MY Exports 55 56 30 60 60 MY Exp. to EU 0 0 0 0 0 Crush 12,265 12,343 11,300 11,800 11,300 Food Use Dom. 120 145 120 140 140 Cons. Feed Waste Dom. 1,080 1,227 980 1,200 1,200 Cons. Total Dom. Cons. 13,465 13,715 12,400 13,140 12,640 Ending Stocks 539 302 329 222 332 Total Distribution 14,059 14,073 12,759 13,422 13,032 1000 HA, 1000 MT Source: FAS EU-27 Soybeans The EU?s domestic soybean production stagnates at 8.5 percent of total use, and is mainly located in Italy (55 percent) and Romania (13 percent). Interestingly, Romania?s soybean production was significantly higher prior to its accession to the EU (137,000 ha in 2006, down to 75,000 ha projected in 2012). Previously, most of Romania?s production consisted of biotech herbicide tolerant varieties, which are allowed to be imported into the EU but not grown in the EU. As a result, Romania?s cultivation of the more profitable biotech varieties stopped and Romania?s planted soy acreage has not recovered. Source: FAS EU-27 Imports account for more than 90 percent of EU-27 soybeans use and 70 percent of the EU soybean meal use. There is little year on year fluctuation. Most of the supply originates from South America. Brazil is the EU?s leading supplier of soybeans (40-70 percent) and second largest supplier of soybean meal (40-45 percent). Argentina is the EU?s leading supplier of soybean meal (50-55 percent). The United States is the EU?s third leading supplier of soybeans, with 17-25 percent market share. Source: Global Trade Atlas MY 2012/13 Competition from South American soybean meal, and reduced demand for soybean meal in animal feed, will contribute to reductions in the EU-27 soybean imports and crush. MY 2011/12: Lower supplies and higher prices, partly a result of ongoing drought in South America, are forecast to reduce EU imports of soybeans almost 500,000 MT to 12 MMT. Imports of soybean meal are also forecast down by almost 500,000 MT to 21.2 MMT. During the first three months of MY 2011/12 (October-December 2011), EU imports of soybeans declined by 10 percent from the same period of the previous year, mainly due to reduced shipments from the United States. The largest soybean crushers in the EU are Germany (25 percent), Spain (25 percent), the Benelux (15 percent), and Italy (13 percent), with relatively stable shares. Source: FAS EU-27 The EU soybean crush will reach 11.8 million MT in MY 2011/12. Also, the share of soybeans in the total EU crush is expected to go down from 30 percent in MY 2010/11 to 29 percent in MY 2011/12, with the loss being made up in the sunflower seed crush. Soybean Meal Meal, Soybean EU- 2010/2011 2011/2012 2012/2013 27 Market Year Begin: Oct Market Year Begin: Oct Market Year Begin: Oct 2010 2011 2012 USDA New USDA New USDA New Official Post Official Post Official Post Crush 12,265 12,343 11,300 11,700 11,300 Extr. Rate, 999.9999 1 1 1 1 1 Beginning Stocks 496 496 557 560 518 Production 9,675 9,654 8,903 9,250 8,900 MY Imports 21,714 21,675 22,400 21,200 21,200 MY Imp. from U.S. 450 452 100 500 500 MY Imp. from EU 0 0 0 0 0 Total Supply 31,885 31,825 31,860 31,010 30,618 MY Exports 606 596 500 450 450 MY Exp. to EU 0 0 0 0 0 Industrial Dom. 10 10 10 10 10 Cons. Food Use Dom. 32 32 32 32 32 Cons. Feed Waste Dom. 30,680 30,627 30,912 30,000 29,800 Cons. Total Dom. Cons. 30,722 30,669 30,954 30,042 29,842 Ending Stocks 557 560 406 518 326 Total Distribution 31,885 31,825 31,860 31,010 30,618 1000 MT, PERCENT The largest users of soybean meal in animal feed are also leading producers of livestock, poultry and dairy. They principally include Spain (16 percent), Germany (15 percent), France (13 percent), Italy (11 percent), and the Benelux (10 percent). Again, these shares are relatively stable. Source: FAS EU-27 MY 2012/13: In MY 2012/13, despite a recovery in world soybeans availability, the forecast for the EU demand for soybean meal in animal feed is for a further decline to 29.8 million MT, offset by the higher feed use of both rapeseed meal and sunflower seed meal. MY 2011/12: Reduced imports of soybeans and soybean meal are anticipated to result in a 2 percent decline in soybean meal use in animal feed, to 30 million MT in MY 2011/12. The lack of soybean meal to feed animals relative to the previous year is expected to be mainly filled by higher utilization of wheat, corn and sunflower meal. The incorporation of all three into animal feed rations is favored by their ample domestic supply and associated low prices. During the three first months of the MY, EU-27 imports of soybean meal are significantly lower than in the previous seasons. Source: Global Trade Atlas Soybean Oil Oil, Soybean EU-27 2010/2011 2011/2012 2012/2013 Market Year Begin: Oct Market Year Begin: Oct Market Year Begin: Oct 2010 2011 2012 USDA New USDA New USDA New Official Post Official Post Official Post Crush 12,265 12,343 11,300 11,800 11,300 Extr. Rate, 999.9999 0 0 0 0 0 Beginning Stocks 262 262 153 371 371 Production 2,236 2,303 2,065 2,200 2,100 MY Imports 905 905 750 700 600 MY Imp. from U.S. 1 1 1 1 1 MY Imp. from EU 0 0 0 0 0 Total Supply 3,403 3,470 2,968 3,271 3,071 MY Exports 456 456 350 400 390 MY Exp. to EU 0 0 0 0 0 Industrial Dom. 1,447 1,306 1,279 1,160 1,120 Cons. Food Use Dom. 1,227 1,287 1,100 1,290 1,270 Cons. Feed Waste Dom. 120 50 90 50 50 Cons. Total Dom. Cons. 2,794 2,643 2,469 2,500 2,440 Ending Stocks 153 371 149 371 241 Total Distribution 3,403 3,470 2,968 3,271 3,071 1000 MT, PERCENT Source: FAS EU-27 Breakout of Industrial Uses for Soybean Oil in MT MY 2010/11 MY 2011/12 MY 2012/13 Biofuels Use 1,098 960 920 Other Industrial Uses 208 200 200 Total Industrial Use 1,306 1,160 1,120 Source: FAS EU-27 The primary use of soybean oil is in the EU is for food (approximately 50 percent), followed by biofuels (40 percent), and industrial use (8 percent). The components of the EU?s soybean oil supply from both domestic crush and imports. The largest suppliers are Argentina (30-50 percent), Brazil (15-36 percent) and Russia (10-20 percent). Interestingly, EU-27 imports of biodiesel have steadily increased in the past few years, mainly from Argentina and Indonesia. An increasing percentage of soybean oil imports is therefore estimated to be for food use. Source: Global Trade Atlas MY 2012/13 The same trends are expected in MY 2012/13 as in MY 2011/12, with reduced imports, stable food use, and reduced use in biodiesel, as the alternative oils indicated above continue to increase their market share at the expense of soybean oil. MY 2011/12 In MY 2011/12, the food use soybean oil is estimated to remain dominant and stable, while biofuels use is anticipated to decline, displaced by sunflower oil, palm oil, animal fats and recycled oils, which are increasingly used to process biodiesel in the European Union. Also, Argentina is anticipated to continue to increase its exports of biodiesel to the European Union, at the expense of soybean oil exports. Trade data in the first three months of the MY clearly indicate a significant decline in total soybean oil imports for the previous years. 3. Rapeseed Complex Coordinator: Leif Erik Rehder/FAS Berlin Less rapeseed was planted in MY 2012/13 but a slight recovery in European production is expected due to higher yields. Oilseed, Rapeseed EU 2010/2011 2011/2012 2012/2013 -27 Market Year Begin: Jul Market Year Begin: Jul Market Year Begin: Jul 2010 2011 2012 USDA New USDA New USDA New Official Post Official Post Official Post Area Planted 6,900 6,900 7,000 7,000 6,700 Area Harvested 6,985 6,986 6,750 6,637 6,400 Beginning Stocks 1,809 1,809 1,740 1,744 1,362 Production 20,706 20,760 19,100 19,128 19,500 MY Imports 2,572 2,572 3,000 2,800 2,800 MY Imp. from U.S. 0 0 0 0 0 MY Imp. from EU 0 0 0 0 0 Total Supply 25,087 25,141 23,840 23,672 23,662 MY Exports 197 197 100 110 100 MY Exp. to EU 0 0 0 0 0 Crush 22,280 22,700 21,420 21,700 22,100 Food Use Dom. 0 0 0 0 0 Cons. Feed Waste Dom. 870 500 826 500 500 Cons. Total Dom. Cons. 23,150 23,200 22,246 22,200 22,600 Ending Stocks 1,740 1,744 1,494 1,362 962 Total Distribution 25,087 25,141 23,840 23,672 23,662 1000 HA, 1000 MT MY 2012/13 The forecast for EU-27 rapeseed area is reduced by five percent or 350,000 ha, compared to 2011 USDA official number. This is a result of reductions in Romania, Bulgaria, Hungary and Denmark. These were mostly due to heavy rains during planting (Denmark), winterkill (Bulgaria, Hungary) and dryness (Romania). In France, Germany, Sweden, the United Kingdom and the Czech Republic farmers increased their rapeseed area but the increase is too small to fully compensate for the reductions that occurred elsewhere. Total EU-27 rapeseed production is forecast at 19.5 MMT, which is a two percent increase over 2011. Winterkill has also been reported for other countries like France, Germany and Poland but it is not expected that the impact will be as significant as in Hungary and Bulgaria. Only a limited acreage will be replanted with corn and sunflower seed in spring. In general, rapeseed plantings seem to be in good condition. Over all, yields are expected to return to average levels and be better than the very low levels of 2011. Rapeseed crush volumes are forecast to rebound slightly, driven by larger availability of domestic rapeseed production, the steady demand from the biodiesel sector, and improved crops in Canada, which will lead to significant EU imports. As the domestic rapeseed supply stays tight, it is expected that ending stocks will be reduced further. MY 2011/12 Preliminary final data shows EU-27 rapeseed production substantially lower than in MY 2010/11. Imports are estimated to increase compared to 2010/11 because of low domestic EU-27 production. Canada and Australia exported more, while Ukraine, the major regional source, had lower exportable supplies. Rapeseed crush is expected to be 1.4 MMT below the level of MY 2010/11. Higher imports of rapeseed could not compensate lower domestic availability. In crushing plants, rapeseed products were partly substituted by sunflower seeds. As a result, less rapeseed meal, more sunflower meal and also more wheat are expected to be used in animal feed rations. EU-27 Rapeseed Meal Meal, Rapeseed EU- 2010/2011 2011/2012 2012/2013 27 Market Year Begin: Jul Market Year Begin: Jul Market Year Begin: Jul 2010 2011 2012 USDA New USDA New USDA New Official Post Official Post Official Post Crush 22,280 22,700 21,420 21,700 22,100 Extr. Rate, 999.9999 1 1 1 1 1 Beginning Stocks 75 300 118 417 282 Production 12,827 12,550 12,331 12,100 12,300 MY Imports 223 224 150 220 210 MY Imp. from U.S. 0 0 0 0 0 MY Imp. from EU 0 0 0 0 0 Total Supply 13,125 13,074 12,599 12,737 12,792 MY Exports 252 251 250 250 260 MY Exp. to EU 0 0 0 0 0 Industrial Dom. 0 6 0 5 6 Cons. Food Use Dom. 0 0 0 0 0 Cons. Feed Waste Dom. 12,755 12,400 12,248 12,200 12,200 Cons. Total Dom. Cons. 12,755 12,406 12,248 12,205 12,206 Ending Stocks 118 417 101 282 326 Total Distribution 13,125 13,074 12,599 12,737 12,792 1000 MT, PERCENT MY 2012/13 Rapeseed meal production is projected to increase again in MY 2012/13 after a three percent decline in MY 2011/12. The popularity of rapeseed meal for animal feed varies among EU countries. Its use is most pronounced in countries that have a long rapeseed crushing history and high dairy production like Germany, France, the Benelux and the UK. EU-27 rapeseed oil Oil, Rapeseed EU- 2010/2011 2011/2012 2012/2013 27 Market Year Begin: Jul Market Year Begin: Jul Market Year Begin: Jul 2010 2011 2012 USDA New USDA New USDA New Official Post Official Post Official Post Crush 22,280 22,700 21,420 21,700 22,100 Extr. Rate, 999.9999 0 0 0 0 0 Beginning Stocks 249 365 191 259 129 Production 9,258 9,400 8,901 9,000 9,200 MY Imports 488 488 550 620 600 MY Imp. from U.S. 15 24 15 70 60 MY Imp. from EU 0 0 0 0 0 Total Supply 9,995 10,253 9,642 9,879 9,929 MY Exports 214 214 250 150 150 MY Exp. to EU 0 0 0 0 0 Industrial Dom. 6,905 7,110 7,150 7,000 7,000 Cons. Food Use Dom. 2,680 2,620 2,037 2,550 2,600 Cons. Feed Waste Dom. 5 50 5 50 50 Cons. Total Dom. Cons. 9,590 9,780 9,192 9,600 9,650 Ending Stocks 191 259 200 129 129 Total Distribution 9,995 10,253 9,642 9,879 9,929 1000 MT, PERCENT Biofuels production is the major use of rapeseed oil in the EU-27 and an important market driver. After a small dip in MY 2011/12, the use of rapeseed oil for biodiesel is expected to remain stable in MY 2012/13. Food use of rapeseed oil is expected to rebound. EU-27 rapeseed oil imports have shown a steady increase in recent years as the increasing demand had outpaced domestic rapeseed oil production. The United Arab Emirates, Canada and Russia were the main suppliers in MY 2010/11. The U.S. also become a major supplier and ranked fourth in 2010/11. However, data for the first half of MY 2011/12 indicate that U.S. exports to the EU-27 will decline. Breakout of Industrial Uses for Rapeseed Oil in MT MY 2010/11 MY 2011/12 MY 2012/13 Biofuels Use 6.400 6.350 6.350 Other Industrial Uses 710 650 650 Total Industrial Use 7.110 7.000 7.000 Source: FAS EU-27 4. Sunflower Complex Coordinator: Mila Boshnakova/ FAS Sofia and Monica Dobrescu FAS/ Bucharest Sunflower seeds Oilseed, Sunflowerseed EU 2010/2011 2011/2012 2012/2013 -27 Market Year Begin: Market Year Begin: Market Year Begin: Oct 2010 Oct 2011 Oct 2012 USDA New USDA New USDA New Official Post Official Post Official Post Area Planted 3,900 3,900 3,900 3,920 4,250 Area Harvested 3,741 3,718 4,160 4,200 4,250 Beginning Stocks 403 403 311 342 672 Production 6,920 6,900 8,100 8,200 7,880 MY Imports 379 379 650 500 400 MY Imp. from U.S. 55 0 40 0 0 MY Imp. from EU 0 0 0 0 0 Total Supply 7,702 7,682 9,061 9,042 8,952 MY Exports 555 555 450 600 650 MY Exp. to EU 0 0 0 0 0 Crush 6,114 6,100 6,960 7,000 6,900 Food Use Dom. Cons. 270 235 300 270 275 Feed Waste Dom. 452 450 558 500 500 Cons. Total Dom. Cons. 6,836 6,785 7,818 7,770 7,675 Ending Stocks 311 342 793 672 627 Total Distribution 7,702 7,682 9,061 9,042 8,952 1000 HA, 1000 MT MY 2012/13 The EU-27 expect to see stable or higher planted sunflower areas in MY2012/13 due to reseeding of winterkill areas in major producing countries or due to land availability (Romania, Bulgaria, France) which is likely to offset the expected decline in Spain because of the lack of soil and subsoil humidity caused by the current drought that is discouraging farmers from planting. At present, production is forecast conservatively to be 4 percent lower than in MY2011/12 due to bumper yields. Total supply is forecast to be about 1 percent less than in MY11/12, as a result of accumulated beginning stocks and projected slightly lower imports. Exports are expected to grow by 8 percent over the current year due to likely favorable export demand (Turkey). Crush use, which sharply increased during MY 2011/12, will decline 1.5 percent due to expected more abundant supply (and crush) of rapeseeds. Despite this, the crush level will stay high due to projected attractive crush margins and sunflower seeds price competitiveness versus other oilseeds. Ending stocks are projected to be reduced by 7 percent compared to estimated MY2011/12 figure, but still remain doubletheir level in MY10/11. MY 2011/12 Harvested area and production were estimated marginally and is the main reason for lower projected imports. Nonetheless, projected imports are still 32 percent higher than the previous season due to good global supplies. Exports are projected to be considerably higher than the previous estimates and above USDA official, mainly due to increased demand by Turkey. For example, exports in the first quarter of MY2011/12 more than doubled (222 percent) compared to the same period in the previous year, with Bulgaria and Romania being the main Member State exporters. Increased crush use is expected to be a major trend for this season, with about 15 percent growth compared to MY2010/11. Favorable price discounts for sunflower seeds and sunflower oil compared to other oilseeds and oils, good crush margins, and better demand by the poultry and livestock industries stimulated a demand growth. Crush increase are expected in France, the Netherlands, Hungary, Romania, and Italy, while a slight drop in crush is expected in Germany. Food and FSW uses were adjusted marginally lower based on Member States inputs. Ending stocks were revised lower due to higher estimates for exports and crush. MY 2010/11 Marginal adjustments were made based on the final data contributed by EU Member States. Sunflower Meal Meal, Sunflowerseed EU 2010/2011 2011/2012 2012/2013 -27 Market Year Begin: Oct Market Year Begin: Oct Market Year Begin: Oct 2010 2011 2012 USDA New USDA New USDA New Official Post Official Post Official Post Crush 6,114 6,100 6,960 7,000 6,900 Extr. Rate, 999.9999 1 1 1 1 1 Beginning Stocks 83 83 116 269 449 Production 3,335 3,220 3,779 3,680 3,620 MY Imports 2,254 2,253 2,700 2,500 2,550 MY Imp. from U.S. 0 0 0 0 0 MY Imp. from EU 0 0 0 0 0 Total Supply 5,672 5,556 6,595 6,449 6,619 MY Exports 137 137 150 150 150 MY Exp. to EU 0 0 0 0 0 Industrial Dom. Cons. 240 0 330 0 0 Food Use Dom. Cons. 0 0 0 0 0 Feed Waste Dom. 5,179 5,150 5,907 5,850 5,900 Cons. Total Dom. Cons. 5,419 5,150 6,237 5,850 5,900 Ending Stocks 116 269 208 449 569 Total Distribution 5,672 5,556 6,595 6,449 6,619 1000 MT, PERCENT MY 2012/13 Production of sunflower meal is likely to drop slightly as a result of a projected marginally lower crush. Due to expected stable demand for sunflower meal by the poultry and livestock industries, and likely favorable regional supply, imports are forecast to increase to compensate for the reduction in output. Price competitiveness may boost further feed use, but also leads to a more comfortable level of ending stocks. MY 2011/12 Production of sunflower meal in MY2011/12 is higher than in the previous year due to increased crush, but the estimate is 2.6 percent below USDA official due to reported lower conversion index by Member States. Despite revised higher beginning stocks, there is a trend towards increasing imports due to demand for feed use and abundant supply in the region. Imports are estimated higher compared to the previous season; for the first quarter of the marketing year they were 33 percent higher than a year before. At present, however, contributions from the Member States do not support imports as high as USDA official data. Feed use has increased substantially compared to the previous season as sunflower meal has been available and price competitive compared to other alternative meals (soybean and rapeseed meals) and its higher inclusion in feed formulas. Ending stocks will rise as a result of a major revision to prior MY ending stock estimates. MY 2010/11 Adjustments were made based on final data contribution by Member States. Due to reported lower conversion index, sunflower meal production is reported 3 percent lower than USDA official. Industrial use was revised down to zero due to newly available data from Poland. This change leads to a revision in ending stocks, which increase considerably. Sunflower Oil Oil, Sunflowerseed EU 2010/2011 2011/2012 2012/2013 -27 Market Year Begin: Oct Market Year Begin: Oct Market Year Begin: Oct 2010 2011 2012 USDA New USDA New USDA New Official Post Official Post Official Post Crush 6,114 6,100 6,960 7,000 6,900 Extr. Rate, 999.9999 0 0 0 0 0 Beginning Stocks 452 452 205 169 294 Production 2,563 2,560 2,918 2,950 2,900 MY Imports 768 768 1,630 1,000 1,100 MY Imp. from U.S. 0 0 0 0 0 MY Imp. from EU 0 0 0 0 0 Total Supply 3,783 3,780 4,753 4,119 4,294 MY Exports 166 166 130 150 150 MY Exp. to EU 0 0 0 0 0 Industrial Dom. 220 220 271 300 302 Cons. Food Use Dom. 3,189 3,200 4,111 3,350 3,425 Cons. Feed Waste Dom. 3 25 3 25 25 Cons. Total Dom. Cons. 3,412 3,445 4,385 3,675 3,752 Ending Stocks 205 169 238 294 392 Total Distribution 3,783 3,780 4,753 4,119 4,294 1000 MT, PERCENT Breakout of Industrial Uses for Sunflower Oil in MT MY 2010/11 MY 2011/12 MY 2012/13 Biofuels Use 140,000 220,000 220,000 Other Industrial Uses 80,000 80,000 82,000 Total Industrial Use 220,000 300,000 302,000 Source: FAS EU-27 MY 2012/13 Production of sunflower oil is projected to decline slightly as a result of a marginally lower crush but will still remain at a high level. Growing food demand and good regional supplies will help meet growing import demand and offset the reduction in output. Food use is likely to increase by 2.2 percent, more modest than the 4.7 percent growth in the current year. Stocks should rebuild to a more comfortable level. MY 2011/12 The major trend in the current year has been the growth (4.7 percent) in food use of sunflower oil. Demand was stimulated by price competitiveness and better availability. Member States report overall higher food use with a most substantial growth in the food and HRI industries, as well as substitutions of other oils with sunflower oil. Output of sunflower oil is revised slightly above USDA official data due to the bigger crush. Imports are also projected to be significantly above the previous year (30 percent). However, current contributions from Member States do not support the sharp increase in imports found in USDA official data. Imports in the first quarter of the marketing year were 18 percent below that a year ago but are likely to grow during the remainder of the year. MY 2010/11 Marginal adjustments were done based on final data contributed by the Member States with an increase in food and FSW use. This leads to lower ending stocks. 5. Palm Kernel Complex Coordinator: Bob Flach/FAS The Hague Meal, Palm Kernel EU 2010/2011 2011/2012 2012/2013 -27 Market Year Begin: Jan Market Year Begin: Jan Market Year Begin: Jan 2011 2012 2013 USDA New USDA New USDA New Official Post Official Post Official Post Crush 25 25 25 25 25 Extr. Rate, 999.9999 1 1 1 1 1 Beginning Stocks 0 0 0 0 0 Production 14 14 14 14 14 MY Imports 2,127 2,127 2,250 2,300 2,300 MY Imp. from U.S. 0 0 0 0 0 MY Imp. from EU 0 0 0 0 0 Total Supply 2,141 2,141 2,264 2,314 2,314 MY Exports 0 0 0 0 0 MY Exp. to EU 0 0 0 0 0 Industrial Dom. 451 250 451 250 250 Cons. Food Use Dom. 0 0 0 0 0 Cons. Feed Waste Dom. 1,690 1,891 1,813 2,064 2,064 Cons. Total Dom. Cons. 2,141 2,141 2,264 2,314 2,314 Ending Stocks 0 0 0 0 0 Total Distribution 2,141 2,141 2,264 2,314 2,314 1000 MT, PERCENT Oil, Palm Kernel EU 2010/2011 2011/2012 2012/2013 -27 Market Year Begin: Jan Market Year Begin: Jan Market Year Begin: Jan 2011 2012 2013 USDA New USDA New USDA New Official Post Official Post Official Post Crush 25 25 25 Extr. Rate, 999.9999 0 0 0 0 0 Beginning Stocks 54 54 27 53 37 Production 11 11 11 11 11 MY Imports 540 540 610 545 550 MY Imp. from U.S. 0 0 0 0 0 MY Imp. from EU 0 0 0 0 0 Total Supply 605 605 648 609 598 MY Exports 20 20 10 20 20 MY Exp. to EU 0 0 0 0 0 Industrial Dom. 203 320 201 320 320 Cons. Food Use Dom. 339 200 399 220 220 Cons. Feed Waste Dom. 16 12 11 12 12 Cons. Total Dom. Cons. 558 532 611 552 552 Ending Stocks 27 53 27 37 26 Total Distribution 605 605 648 609 598 1000 MT, PERCENT In 2012 and 2013, EU palm kernel meal use is expected to increase to about 2.1 MMT, from 1.9 MMT in 2011. This is a result of the increasing supply from Asia in combination with the lower supply of mainly soybean meal. About half of the palm kernel meal is used in the Benelux countries, predominantly as an ingredient in cattle feed. During the past five years, the use in cattle feed has been about twenty-five percent. Germany, the UK and Ireland also use palm kernel meal in livestock feed. The import and use of palm kernel oil stabilized in 2011, and is expected to increase slightly following the increasing supply from Asia. 6. Palm Oil Coordinator: Bob Flach/ FAS The Hague Palm Oil Oil, Palm EU-27 2010/2011 2011/2012 2012/2013 Market Year Begin: Jan Market Year Begin: Jan Market Year Begin: Jan 2011 2012 2013 USDA New USDA New USDA New Official Post Official Post Official Post Area Planted 0 0 0 0 Area Harvested 0 0 0 0 Trees 0 0 0 0 Beginning Stocks 542 542 162 113 163 Production 0 0 0 0 MY Imports 4,800 4,628 5,300 5,500 5,500 MY Imp. from U.S. 0 0 0 0 0 MY Imp. from EU 0 0 0 0 0 Total Supply 5,342 5,170 5,462 5,613 5,663 MY Exports 202 207 120 200 200 MY Exp. to EU 0 0 0 0 0 Industrial Dom. 2,090 1,850 2,280 2,250 2,350 Cons. Food Use Dom. 2,660 2,700 2,600 2,700 2,700 Cons. Feed Waste Dom. 228 300 270 300 300 Cons. Total Dom. Cons. 4,978 4,850 5,150 5,250 5,350 Ending Stocks 162 113 192 163 113 Total Distribution 5,342 5,170 5,462 5,613 5,663 1000 HA, 1000 TREES, 1000 MT During the past ten years, EU imports of palm oil increased from about 2 MMT to over 5 MMT per year. This growth is mainly attributable to the increased imports of crude palm oil through the port of Rotterdam. Currently, the refining capacity in this port is estimated at about 1.5 MMT per year. While EU imports of crude palm oil increased from 1.1 MMT to 4.0 MMT annually, refined palm oil imports fluctuated between 1.0 and 1.5 MMT since 2000. Although the price of palm oil has more than doubled since the beginning of 2009, the price relationship to soybean, rapeseed, and sunflower oil has generally remained intact. Currently, the FOB Rotterdam palm oil price is about fifteen to twenty-five percent lower than that of these other main vegetable oils. This margin makes palm oil an economical alternative in the EU oils and fats market. Official trade statistics reveal a reduction of palm oil imports in 2011, from 5.4 MMT in 2010 to about 4.6 MMT. However, not all trade data has been collected yet. Official customs data are expected to be low by 300,000 to 400,000 MT, of which about 200,00 MT is from a single company. EU exports of refined palm oil are expected to stagnate or decline slightly as more refined oil is be sourced directly from refineries in Asia. Palm oil use for industrial purposes, including combustion for combined heat and power (CHP) and production of biofuels, is currently estimated at about 1.9 MMT in 2011 but will likely be adjusted at a higher when new official trade data becomes available. As a result, imports of palm oil may also be adjusted up. Biofuel production is forecast to remain a growth market for palm oil. In 2011, the biodiesel sector increasingly sourced recycled vegetable oils instead of palm oil for the production of biodiesel. For 2011, the use of palm oil for biofuel production is estimated at 650,000 MT, but is expected to grow to about 750,000 MT in 2013. The use of palm oil for biofuel production is forecast to increase particularly in the Netherlands. In Rotterdam a new biofuel plant with an annual capacity of 800,000 MT of biofuel has been operational since December 2011. The plant applies the Biomass to Liquid (BtL) process and the company?s goal is to use fifty percent palm oil and forty percent waste oils and fats as feedstock. In the Dutch Renewable Energy Action Plan, the Dutch government is planning to use an ambitious 3 MMT of palm oil for renewable energy production by 2020. During the past ten years, palm oil use by the food processing and feed compound industry steadily increased, based mainly on price. The food industry also claims the low content of trans-fatty acids as an important factor. The use of palm oil for food and feed is expected to stagnate at 2.7 MMT. An important factor for further penetration of palm oil in the EU market is the sustainability certification. For palm oil to used as a qualified biofuels it must be certified as sustainable under the EU?s Renewable Energy Directive (RED) but there are some program complications. For example, the Dutch government acknowledged the program Round Table for Sustainable Palm Oil (RSPO) as being in compliance with the RED starting in July 2012. However, the European Commission does not acknowledge the RSPO but is evaluating the program. The Dutch Sustainable Palm Oil Task Force is also working to ensure that by the end of 2015, all palm oil destined for the Dutch market (food, feed and energy use) needs to be sustainably produced. The Dutch Government has pled for a zero import tariff (now 3.8 percent) for sustainable unrefined palm oil for the production of food. 7. Peanut Complex Coordinator Jennifer Wilson/ FAS London Peanuts Oilseed, Peanut EU-27 2010/2011 2011/2012 2012/2013 Market Year Begin: Oct 2010 Market Year Begin: Oct 2011 Market Year Begin: Oct 2012 USDA Official New Post USDA Official New Post USDA Official New Post Area Planted 0 0 0 0 0 Area Harvested 0 0 0 0 0 Beginning Stocks 10 10 8 8 8 Production 0 0 0 0 0 MY Imports 747 744 750 730 730 MY Imp. from U.S. 70 70 65 60 60 MY Imp. from EU 0 0 0 0 0 Total Supply 757 754 758 738 738 MY Exports 29 29 30 25 25 MY Exp. to EU 0 0 0 0 0 Crush 45 45 45 45 45 Food Use Dom. Cons. 672 669 672 657 657 Feed Waste Dom. Cons. 3 3 3 3 3 Total Dom. Cons. 720 717 720 705 705 Ending Stocks 8 8 8 8 8 Total Distribution 757 754 758 738 738 1000 HA, 1000 MT Peanut meal Meal, Peanut EU-27 2010/2011 2011/2012 2012/2013 Market Year Begin: Oct 2010 Market Year Begin: Oct 2011 Market Year Begin: Oct 2012 USDA Official New Post USDA Official New Post USDA Official New Post Crush 45 45 45 45 45 Extr. Rate, 999.9999 0 0 0 0 0 Beginning Stocks 0 0 0 0 0 Production 20 20 20 20 20 MY Imports 66 60 20 60 60 MY Imp. from U.S. 0 7 0 0 0 MY Imp. from EU 0 0 0 0 0 Total Supply 86 80 40 80 80 MY Exports 0 0 0 0 0 MY Exp. to EU 0 0 0 0 0 Industrial Dom. Cons. 0 0 0 0 0 Food Use Dom. Cons. 0 0 0 0 0 Feed Waste Dom. Cons. 86 80 40 80 80 Total Dom. Cons. 86 80 40 80 80 Ending Stocks 0 0 0 0 0 Total Distribution 86 80 40 80 80 1000 MT, PERCENT Peanut oil Oil, Peanut EU-27 2010/2011 2011/2012 2012/2013 Market Year Begin: Oct 2010 Market Year Begin: Oct 2011 Market Year Begin: Oct 2012 USDA Official New Post USDA Official New Post USDA Official New Post Crush 45 45 Extr. Rate, 999.9999 0 0 0 0 0 Beginning Stocks 5 5 5 5 5 Production 16 16 16 16 16 MY Imports 80 80 75 78 78 MY Imp. from U.S. 0 0 0 0 0 MY Imp. from EU 0 0 0 0 0 Total Supply 101 101 96 99 99 MY Exports 2 3 3 2 2 MY Exp. to EU 0 0 0 0 0 Industrial Dom. Cons. 0 0 0 0 0 Food Use Dom. Cons. 94 93 89 92 92 Feed Waste Dom. Cons. 0 0 0 0 0 Total Dom. Cons. 94 93 89 92 92 Ending Stocks 5 5 4 5 5 Total Distribution 101 101 96 99 99 1000 MT, PERCENT The European Union is the largest importer of peanut and peanut products in the world. Imports have historically been very stable, although current high prices may affect usage in the near future. Whole and shelled peanuts are forecast to be down nearly 2 percent over previous marketing years, due to harvest shortfalls in several key supplier nations, including the United States and India. EU requirements for very low aflatoxin levels are a major factor in sourcing peanuts. The U.S. is expected to have fewer peanuts available for export to the EU, and price is always a limiting factor to increasing sales of U.S. peanuts to this market. The main supplier of peanut meal to the EU, Senegal, has reportedly experienced a fall in production in the current marketing year due adverse weather conditions. The forecast for EU imports of peanut meal is held stable as it is unclear yet how trade may be affected. In recent years, Senegal has been the key supplier of peanut oil to the EU, along with Argentina and Brazil. Again, following trade reports of a reduced peanut harvest in Senegal, our forecast for EU imports of peanut oil is held stable until trade patterns become clearer. 8. Fish Meal Coordinator: Asa Wideback/ FAS Stockholm Meal, Fish EU-27 2010/2011 2011/2012 2012/2013 Market Year Begin: Jan Market Year Begin: Jan Market Year Begin: Jan 2011 2012 2013 USDA New USDA New USDA New Official Post Official Post Official Post Catch For 1,620 0 1,620 1,620 1,620 Reduction Extr. Rate, 999.9999 0 0 0 0 0 Beginning Stocks 7 7 7 7 7 Production 500 470 500 500 500 MY Imports 400 354 450 400 400 MY Imp. from U.S. 2 1 2 1 1 MY Imp. from EU 0 0 0 0 0 Total Supply 907 831 957 907 907 MY Exports 200 222 200 220 220 MY Exp. to EU 0 0 0 0 0 Industrial Dom. 0 0 0 0 0 Cons. Food Use Dom. 0 0 0 0 0 Cons. Feed Waste Dom. 700 602 750 680 680 Cons. Total Dom. Cons. 700 602 750 680 680 Ending Stocks 7 7 7 7 7 Total Distribution 907 831 957 907 907 1000 MT The EU is dependent on fishmeal imports to fulfill domestic demand. Imports in 2011 were lower than previously expected, resulting in lower feed use. Although imports from Peru have been decreasing for two years, more than half of EU imports still originate in Peru. Germany and the UK are the biggest markets for fishmeal in the EU. Together these countries account for about 75 percent of total EU imports. The major cause of the drop is the use of other feed proteins to replace fishmeal. The price of fishmeal is expected to remain high in 2012. Fishmeal usage is also moving from animal feed to aquaculture. EU exports are expected to remain stable. A major part of EU fishmeal exports go to Norway and its aquaculture industry. 9. Copra Complex Coordinator: Leif Eric Rehder/ FAS Berlin Copra is not produced and no longer processed in the EU-27. The EU-27 satisfies all its copra meal and coconut oil demand with imports. Meal, Copra EU-27 2010/2011 2011/2012 2012/2013 Market Year Begin: Jan Market Year Begin: Jan Market Year Begin: Jan 2011 2012 2013 USDA New USDA New USDA New Official Post Official Post Official Post Crush 0 0 0 0 Extr. Rate, 999.9999 0 0 0 0 0 Beginning Stocks 0 0 0 0 0 Production 0 0 0 0 MY Imports 18 18 35 25 25 MY Imp. from U.S. 0 0 0 0 MY Imp. from EU 0 0 0 0 Total Supply 18 18 35 25 25 MY Exports 0 0 0 0 MY Exp. to EU 0 0 0 0 Industrial Dom. 0 0 0 0 Cons. Food Use Dom. 0 0 0 0 Cons. Feed Waste Dom. 18 18 35 25 25 Cons. Total Dom. Cons. 18 18 35 25 25 Ending Stocks 0 0 0 0 Total Distribution 18 18 35 25 25 1000 MT, PERCENT Source: FAS EU-27 In CY 2011 EU imports of coconut oil dropped because of tight world supplies. In response to high prices consumers shifted towards palmkernel oil. It is expected that imports of coconut oil will recover slightly in CY 2012. Oil, Coconut EU-27 2010/2011 2011/2012 2012/2013 Market Year Begin: Jan Market Year Begin: Jan Market Year Begin: Jan 2011 2012 2012 USDA New USDA New USDA New Official Post Official Post Official Post Crush 0 0 0 0 0 Extr. Rate, 999.9999 0 0 0 0 0 Beginning Stocks 153 153 61 53 36 Production 0 0 0 0 0 MY Imports 620 617 725 700 700 MY Imp. from U.S. 0 0 0 0 0 MY Imp. from EU 0 0 0 0 0 Total Supply 773 770 786 753 736 MY Exports 12 12 12 12 12 MY Exp. to EU 0 0 0 0 0 Industrial Dom. 240 320 240 320 320 Cons. Food Use Dom. 450 380 460 380 380 Cons. Feed Waste Dom. 10 5 10 5 5 Cons. Total Dom. Cons. 700 705 710 705 705 Ending Stocks 61 53 64 36 19 Total Distribution 773 770 786 753 736 1000 MT, PERCENT Source: FAS EU-27 10. Cottonseed Complex Coordinator: Ornella Bettini/ FAS Rome EU-27 Cottonseed Cottonseed EU-27 2010/2011 2011/2012 2012/2013 Market Year Begin: Oct Market Year Begin: Oct Market Year Begin: Oct 2010 2011 2012 USDA New USDA New USDA New Official Post Official Post Official Post Area 313 303 370 352 353 Beginning Stocks 22 22 22 22 22 Production 375 395 459 550 516 MY Imports 76 49 70 59 58 MY Imp. from U.S. 5 7 5 7 7 MY Imp. from EU 0 12 0 12 12 Total Supply 473 466 551 631 596 MY Exports 35 25 34 26 24 MY Exp. to EU 114 118 114 118 118 Crush 273 238 255 426 395 Food Use Dom. 2 2 2 2 2 Cons. Feed Waste Dom. 141 179 238 155 153 Cons. Total Dom. Cons. 416 419 495 583 550 Ending Stocks 22 22 22 22 22 Total Distribution 473 466 551 631 596 1000 HA, 1000 MT Source: FAS EU-27 EU-27 Cottonseed Meal Cottonseed Meal EU- 2010/2011 2011/2012 2012/2013 27 Market Year Begin: Oct Market Year Begin: Oct Market Year Begin: Oct 2010 2011 2012 USDA New USDA New USDA New Official Post Official Post Official Post Crush 273 238 255 426 395 Extraction Rate 0.483 0.483 0.486 0.483 0.483 Beginning Stocks 5 5 5 5 5 Production 132 115 124 206 191 MY Imports 4 4 4 4 4 MY Imp. from U.S. 1 1 1 1 1 Total Supply 141 124 133 215 200 MY Exports 0 2 0 2 2 MY Exp. to U.S. 0 0 0 0 0 Industrial Dom. Cons. 0 0 0 0 0 Food Use Dom. Cons. 0 0 0 0 0 Feed, Seed Waste 136 117 128 208 193 Dom. Cons. Total Dom. Cons. 136 117 128 208 193 Ending Stocks 5 5 5 5 5 Total Distribution 141 124 133 215 200 1000 MT Source: FAS EU-27 EU-27 Cottonseed Oil Cottonseed Oil EU-27 2010/2011 2011/2012 2012/2013 Market Year Begin: Oct Market Year Begin: Oct Market Year Begin: Oct 2010 2011 2012 USDA New USDA New USDA New Official Post Official Post Official Post Crush 273 238 255 426 395 Extraction Rate 0.183 0.181 0.184 0.184 0.182 Beginning Stocks 5 5 5 5 5 Production 50 43 47 78 72 MY Imports 1 3 1 3 3 MY Imp. from U.S. 0 0 0 0 0 Total Supply 56 51 53 86 80 MY Exports 0 0 0 0 0 MY Exp. to U.S. 0 0 0 0 0 Industrial Dom. Cons. 0 0 0 0 0 Biofuels 5 5 5 6 8 Food Use Dom. Cons. 46 41 43 75 67 Feed, Seed Waste 0 0 0 0 0 Dom. Cons. Total Dom. Cons. 51 46 48 81 75 Ending Stocks 5 5 5 5 5 Total Distribution 56 51 53 86 80 1000 MT Source: FAS EU-27 Production The EU-27 is a minor producer of cotton. EU-27 cotton production has declined by more than 50 percent following Common Agricultural Policy (CAP) reforms effective in 2006 that decoupled payments and reduced support and market barriers for a number of crops, including cotton. Production may stabilize through 2013 when additional reforms are expected to be implemented that could further reduce incentives to produce cotton. The EU-27 does not permit farmers to cultivate modern biotech cotton varieties, further hurting competitiveness. Only two EU-27 Members States, Greece (80 percent) and Spain (20 percent), grow significant amounts of cotton commercially. Cotton is a major agricultural crop in Greece, accounting for more than 8 percent of total agricultural output. More than 75,000 farmers grow cotton, producing about 90 percent of the EU crop. Cotton is planted from March 1 to April 15; the harvest occurs from October 1 to November 30. Most cotton is irrigated and machine harvested. Thessaly, Macedonia, and Mainland Greece are the major cotton-producing areas. Spain?s cotton area is concentrated in the region of Andalusia, and it is progressively concentrating in the provinces of Seville and Cadiz. Cotton is grown on some of the best agricultural land, competing with other irrigated crops. Following the cotton reforms in MY 2009/10, the EU-27 planted area has progressively increased and is forecast to remain stable during MY 2012/13. MY 2012/2013 Greek cotton area and production are forecast to remain steady if weather remains stable. In Spain, the modification of the payment system in MY 2009/10, along with favorable prices paid to producers has enabled a progressive recovery of the area planted to cotton over the last three MY. Greek seed cotton prices have increased from ?0.52/kg at the beginning of the season to nearly $1.20/lb. in mid-November. In Spain seed cotton prices increased from ?0.48/kg at the beginning of the season to nearly ?0.59/kg in November. Crush In Greece, about 58 percent of cottonseed production is crushed for oil (and oilseed cake) or retained for seed. In Spain, cottonseed production is not crushed, but used directly as animal feed (mostly dairy cows). Trade Greece is a major cotton exporter. Italy continues to be the main destination for Greek cottonseed exports, accounting for 75 percent of the total. In Greece, small amounts of cotton are imported for blending in the domestic spinning industry. Spanish cottonseed domestic demand is also satisfied by imports. Cote d?Ivoire, Brazil, and Greece are the main suppliers to the Spanish cottonseed market. 11. Olive Oil Coordinator: Marta Guerrero/ FAS Madrid OLIVE OIL Oil, Olive EU-27 2010/2011 2011/2012 2012/2013 Market Year Begin: Nov Market Year Begin: Nov Market Year Begin: Nov 2010 2011 2012 USDA New USDA New USDA New Official Post Official Post Official Post Area Planted 0 0 0 0 0 Area Harvested 0 0 0 0 0 Trees 6,750 0 6,750 0 0 Beginning Stocks 419 419 229 343 438 Production 2,290 2,205 2,350 2,395 2,185 MY Imports 90 83 75 75 80 MY Imp. from U.S. 0 0 0 0 0 MY Imp. from EU 0 0 0 0 0 Total Supply 2,799 2,707 2,654 2,813 2,703 MY Exports 520 484 410 490 495 MY Exp. to EU 0 0 0 0 0 Industrial Dom. 50 50 50 50 50 Cons. Food Use Dom. 2,000 1,830 2,000 1,835 1,835 Cons. Feed Waste Dom. 0 0 0 0 0 Cons. Total Dom. Cons. 2,050 1,880 2,050 1,885 1,885 Ending Stocks 229 343 194 438 323 Total Distribution 2,799 2,707 2,654 2,813 2,703 1000 HA, 1000 TREES, 1000 MT MY 2012/13 Slightly lower production levels are anticipated for MY2012/13 driven by Spain?s lower production prospects due to the frosts and dry conditions that prevailed after harvest. Olive oil production is also expected to decline slightly since it has become less profitable in Italy due to rising input costs and decreasing prices that have forced many Italian oil olives growers to cut some cultivation practices or abandon production. Food use is expected to remain fairly stable in the EU-27 and exports to third countries are expected to continue their upward trend at the expenses of domestic stocks. MY2011/12 Overall olive oil production in the EU-27 is expected to grow in MY2011/12. The situation is different in the EU leading producing countries. Production remained fairly stable in Greece and Italy, while olive oil production grew in Spain and Portugal. Dry and mild weather in early fall and winter in Spain favored olive harvest, which was carried out earlier in the season than usual. Farmers and packers in Spain expect record production, which might have a negative impact in prices in the short term. Italian olive oil production declined about 6 percent due to the effects of the hot summer, resulting in the lowest harvest in the last decade. Hot temperatures and drought over the summer negatively affected the olive ripening, triggering a decline in yields especially in Central regions (Tuscany, Lazio, Umbria, Marche) where the olive oil production will likely decline by 30-40 percent. Nevertheless, the absence of rain did not allow for pathogens to spread (olive fruit fly) on the crop, thus quality is expected to be quite good. In Greece, olive oil production has been negatively affected by the freezing weather of March 2011. Qualitatively it has been a very good year for the whole country except for Crete where the presence of the fly and the freezing weather have had a negative impact not only on the quantity but also on the quality of the olive oil produced. Despite of the economic difficulties in Mediterranean countries ?leading producers and consumers- olive oil consumption remains steady and marginal growths in consumption are anticipated in the EU as a whole. High olive oil beginning stocks in MY 2011/12, located mainly in Spain along with an earlier than usual and abundant crop have pressured prices down triggering PSA twice this MY. Olive oil actors are currently calling for the opening of a third tender. Private Storage Aid In the past year the European Commission has opened Private Storage Aid (PSA) twice for virgin olive oil. The aim of the PSA scheme is to help stabilize the EU markets at times when prices are weak by removing surplus supplies. The removal can be either temporary, where the product is later released back onto the Community market after a predetermined storage period, or permanent, where the product is exported from the Community prior to the end of the storage period. PSA is only available for products produced within the EU. The decisions on PSA?s follow the price situation in Spain where the price for virgin oil dropped below the reference level as laid out in Council Regulation 1234/2007. The EU can provide aid for PSA?s if there are serious disturbances on the market in a certain region or the average price for one or more of the following products are recorded on the market during a period not less than two weeks: ? ?1,779/ton for extra virgin olive oil ??1,710/ton for virgin olive oil ?? 1,524/ton for lampante olive oil The two tenders were for 100 000 tons each and the first one was eligible in all EU Member States and the second one only in olive oil producing Member States ( Greece, Spain, France, Italy Cyprus, Malta Portugal and Slovenia) during a period of 180 and 150 days respectively. The EU farmers union, Copa-Cogeca, has been lobbying for the opening of PSA?s for olive oil for a long time, and welcomes the decision. However according to Copa-Cogeca, lampante oil prices are following the same trend in several producing countries and are already below the reference level in Greece and Portugal. Copa-Cogeca is also calling for a third opening of the PSA?s on Olive oil to handle the currently very low prices on olive oil. The union also says that with the severe drought in many olive producing regions that will most likely cut olive oil production this year and the stored quantities will enable a smoother transition into the new campaign to maintain the level of supply and ensure market balance. According to Eurostat data the olive oil sector is the only sector that have seen year on year decreases in producer income in 2010 (-5,7 percent) , and by 15.2 percent in 2009. Olive oil is an important crop in the Southern EU. In Spain, 21 percent of the farms specialize in olives, in Greece 29 percent and in Italy 21 percent. 12. Policy Coordinator: Karin Bendz/ FAS USEU Brussels The Common Agriculture Policy The EU is in the process of creating the latest version of the Common Agriculture Policy (CAP) due to be implemented starting January 1, 2014. On October 12, 2011, the Commission presented a set of legal proposals focusing on competition sustainability and improving economic activities in rural areas. The proposals are currently being discussed in the Parliament and by the Member States. The proposal will maintain the same with two pillars, one with direct payments and one for rural development. One important change in the proposal is the so called ?greening component? in Pillar 1, where the Commission suggests there should be three elements of greening that all farmers would have to comply with to receive direct payments. These three
Posted: 23 April 2012

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