Weather Conditions Limit EU-27 Oilseeds Production

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

Posted on: 15 Aug 2012

This report provides EU-27 production, supply, and demand forecasts for oilseeds, protein meals and related products.

THIS REPORT CONTAINS ASSESSMENTS OF COMMODITY AND TRADE ISSUES MADE BY USDA STAFF AND NOT NECESSARILY STATEMENTS OF OFFICIAL U.S. GOVERNMENT POLICY Voluntary Public - Date: 8/1/2012 GAIN Report Number: EU-27 Post: Vienna Unfavorable Weather Conditions Limit EU-27 Oilseeds Production Report Categories: Oilseeds and Products Biofuels Grain and Feed Approved By: Paul Spencer Prepared By: Roswitha Krautgartner, Marie-Cecile Henard, Leif Erik Rehder, Mila Boshnakova, Marta Guerrero and the group of FAS oilseeds specialists in the EU Report Highlights: This report provides EU-27 production, supply, and demand forecasts for oilseeds, protein meals and related products. 1 General Information: 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: Karin Bendz USEU/FAS Brussels covering EU policy Ornella Bettini FAS/Rome covering Italy and 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 Mira Kobuszynska FAS/Warsaw covering Poland, Estonia, Latvia, and Lithuania 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 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) FSU = Former Soviet Union f = Forecast (of a value/number for the next, not yet started, marketing year) 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 2 production or other technical uses such as lubricants or in detergents are included in "industrial use". The marketing years used in this report are: July-June Rapeseed complex October -September Soybean complex Sunflower complex November-October Olive Oil Table of Contents 1. Executive Summary 2. Total of Major Oilseeds 3. Soybean Complex 4. Rapeseed Complex 5. Sunflower Complex 6. Olive Oil 1. Executive Summary: Coordinator: Roswitha Krautgartner / FAS Vienna Production In MY 2012/13, overall production in the EU-27 of major oilseeds (rapeseed, sunflower and soybeans) is expected to reach 27.6 MMT, a decline of 3.8 percent compared to the previous year. Most significant is the lower production of rapeseed due to winterkill in Poland, Romania, Bulgaria and France. However, favorable weather conditions over the past weeks in Germany, France, and the Czech Republic will lead to better than expected yields. Total EU-27 rapeseed production is forecast to be 18.5 MMT. For sunflower seed, hot and dry weather has reduced yield potential in major sunflower producing countries such as Spain, Italy, Hungary, Romania and Bulgaria. Weather conditions in the coming weeks remain critical for the sunflower crop and some irreversible drought damage in Spain and Romania has already been reported. The current estimate for the EU-27 sunflower crop in 2012/13 is 7.98 MMT. EU-27 production of soybeans remains very low compared to consumption and is forecast to decline 15percent to 1.1 MMT. Consumption and Trade Total EU-27 consumption of major oilseeds meals (rapeseed, sunflower and soybeans) in feed is forecast to decline 1.3 percent in MY 2012/13. Lower demand for soybean meal in animal feed, especially in Germany and Italy due to high prices for soybean meal relative to wheat, increased use of DDGs (dried distillers grains) and lower production of rapeseed meal are all factors in the decline. Overall EU-27 industrial use of rapeseed, soybean and sunflower oil in MY 2012/13 is expected to increase by 1.3 percent to 8.2 MMT. This increase is driven by a 25 percent higher demand for soybean oil in the biofuels industry through a rebound in the Spanish production of biodiesel. The low domestic production of rapeseed will require record rapeseed imports to satisfy demand from the crushing industry. The rapeseed crush is slight lower than last year. The sunflower crush is expected to increase marginally over from last year with gains coming in the first half of MY 2012/13. There will be a gradually reduction of the crush in the second half in anticipation of a potentially record sunflower crop in Argentina. 3 Policy In late June 2012, the EU Commission presented its Working Document for an Action Plan to Support Olive oil producers, which included measures to prevent fraud as well as measures to improve the position of producers within the value chain through stronger producer organizations with enhanced bargaining power. Also, a better use of the market management tools and market promotion is foreseen in the Commission’s draft. Producing Member States are weighing in on the draft and the final plan will likely be released during the summer months. 2. Total of Major Oilseeds (Soybean, Rapeseed, Sunflower) Coordinator: Roswitha Krautgartner / FAS Vienna EU-27 Area of Major Oilseeds (in 1,000 ha) Area 2010 2011 2012e Rapeseed 6,986 6,637 6,128 Sunflower 3,718 4,200 4,250 Soybeans 381 452 392 Total 11,085 11,289 10,770 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) e = estimate Source: FAS EU-27 EU-27 Major Oilseed Production (in 1,000 MT) Production 2010 2011 2012e Rapeseed 20,760 19,103 18,500 Sunflower 6,933 8,270 7,980 Soybeans 1,092 1,289 1,096 Total 28,785 28,662 27,576 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) e = estimate Source: FAS EU-27 EU-27 Major Oilseed Crush (in 1,000 MT) Crush MY 2010/11 MY 2011/12e MY 2012/13f Rapeseed 22,300 21,500 21,000 Soybeans 12,398 11,900 11,200 Sunflower 6,100 7,050 7,100 Total 40,798 40,450 39,300 e= estimate, f = forecast Source: FAS EU-27 Feed, Waste Use of Major Oil Meals in the EU-27 (in 1,000 MT) Feed, Waste Use Meals MY 2010/11 MY 2011/12e MY 2012/13f Soybeans 29,491 29,000 28,500 Rapeseed 12,390 11,900 11,700 Sunflower 5,173 6,000 6,100 Total 47,054 46,900 46,300 4 e= estimate, f = forecast Source: FAS EU-27 Biofuels Use of Major Oils in the EU27 (in 1,000 MT): Biofuels Use MY 2010/11 MY 2011/12e MY 2012/13f Rape Oil 6262 6200 6100 Soy Oil 1042 750 940 Sunflower Oil 140 215 220 Total 0 0 0 e= estimate, f = forecast Source: FAS EU-27 Other Industrial Use of Major Oils in the EU27 (in 1,000 MT): Other Industrial Use MY 2010/11 MY 2011/12e MY 2012/13f Rape Oil 710 650 650 Soy Oil 200 200 200 Sunflower Oil 80 90 90 Total 0 0 0 e= estimate, f = forecast Source: FAS EU-27 3. Soybean Complex Coordinator: Marie-Cecile Henard / FAS Paris Oilseed, Soybean EU 2010/2011 2011/2012 2012/2013 -27 Market Year Begin: Oct Market Year Begin: Oct Market Year Begin: May 2010 2011 2012 USDA New USDA New USDA New Official Post Official Post Official Post Area Planted 375 381 425 452 425 392 Area Harvested 370 381 418 452 425 392 Beginning Stocks 543 543 555 282 329 201 Production 1,042 1,092 1,117 1,289 1,200 1,096 MY Imports 12,482 12,483 11,000 11,885 11,000 11,400 MY Imp. from U.S. 3,174 3,174 1,200 1,200 3,000 2,000 MY Imp. from EU 0 0 0 0 0 0 Total Supply 14,067 14,118 12,672 13,456 12,529 12,697 MY Exports 56 56 30 35 30 40 MY Exp. to EU 0 0 0 0 0 0 Crush 12,265 12,398 11,300 11,900 11,180 11,200 Food Use Dom. 117 145 120 140 120 140 Cons. Feed Waste Dom. 1,074 1,237 893 1,180 880 1,180 Cons. Total Dom. Cons. 13,456 13,780 12,313 13,220 12,180 12,520 Ending Stocks 555 282 329 201 319 137 Total Distribution 14,067 14,118 12,672 13,456 12,529 12,697 1000 HA, 1000 MT 5 Meal, Soybean EU- 2010/2011 2011/2012 2012/2013 27 Market Year Begin: Oct Market Year Begin: Oct Market Year Begin: May 2010 2011 2012 USDA New USDA New USDA New Official Post Official Post Official Post Crush 12,265 12,398 11,300 11,900 11,180 11,200 Extr. Rate, 1 1 1 1 1 1 999.9999 Beginning Stocks 495 495 552 1,492 341 1,850 Production 9,675 9,491 8,903 9,300 8,811 8,800 MY Imports 21,710 21,635 21,800 20,800 21,900 20,700 MY Imp. from U.S. 453 452 100 350 0 300 MY Imp. from EU 0 0 0 0 0 0 Total Supply 31,880 31,621 31,255 31,592 31,052 31,350 MY Exports 606 596 560 700 450 800 MY Exp. to EU 0 0 0 0 0 0 Industrial Dom. 10 10 10 10 10 10 Cons. Food Use Dom. 32 32 32 32 32 32 Cons. Feed Waste Dom. 30,680 29,491 30,312 29,000 30,220 28,550 Cons. Total Dom. Cons. 30,722 29,533 30,354 29,042 30,262 28,592 Ending Stocks 552 1,492 341 1,850 340 1,958 Total Distribution 31,880 31,621 31,255 31,592 31,052 31,350 1000 MT, PERCENT 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 12,398 11,300 11,900 11,180 11,200 Extr. Rate, 999.9999 0 0 0 0 0 0 Beginning Stocks 322 322 272 529 137 459 Production 2,236 2,240 2,065 2,150 2,043 2,000 MY Imports 907 905 530 520 500 550 MY Imp. from U.S. 1 1 1 1 1 1 MY Imp. from EU 0 0 0 0 0 0 Total Supply 3,465 3,467 2,867 3,199 2,680 3,009 MY Exports 456 456 400 460 350 350 MY Exp. to EU 0 0 0 0 0 0 Industrial Dom. 1,420 1,242 1,060 950 1,000 1,140 Cons. Food Use Dom. 1,227 1,190 1,200 1,280 1,116 1,220 Cons. Feed Waste Dom. 90 50 70 50 50 20 Cons. - 6 Total Dom. Cons. 2,737 2,482 2,330 2,280 2,166 2,380 Ending Stocks 272 529 137 459 164 279 Total Distribution 3,465 3,467 2,867 3,199 2,680 3,009 1000 MT, PERCENT MY 2012/13 With declining domestic demand for animal feed, lower than average world soybean supplies, high soybean prices relative to sunflower seed and wheat, and increasing feed use of dried distillers grains, EU consumption of soybean meal in animal feed is expected to decline by 1.5 percent to 28.55 MMT in MY 2012/13. The strongest declines in soybean meal feed use are expected to take place in Germany and Italy. Reduced domestic demand for soybean meal is anticipated to negatively impact soybean imports (with a 4 percent reduction to 11.4 million MT), more than soybean meal imports (0.5 percent drop to 20.7 million MT). This is in line with the long term trend of declining soybean shipments to the benefit of processed products, i.e., meal, oil, or biodiesel. The lower rapeseed supply, however, is anticipated to increase soybean crush at a slightly higher level than previously expected. The EU demand of soybean oil for biofuels use is expected to be up 25 percent to 940,000 MT, as a result of the rebound in Spanish demand. This is in line with recently adopted Spanish legislation to allocate biodiesel production quotas, expected to enhance biodiesel production. EU domestic production of soybeans is expected to remain marginal compared to demand (8.8 percent), at 1.1 MMT. Italy, Romania and France are the largest producers, accounting for almost 80 percent of EU production. While the EU is a minor exporter of soybean products, EU exports of soybean meal are anticipated to remain at a higher level than normal (800,000 MT), triggered by Turkish demand. MY 2011/12 Limited world supply and high soybean prices compared to wheat and sunflower seed and lower crush margins for soybean relative to other oilseeds, are pushing down soybean meal use in animal feed. There is also some reduced demand pressure for feed, mainly in the swine sector. EU imports of soybeans and soybean oil are also hampered by the implementation of the Renewable Energy Directive, which imposes stricter conditions on biofuel sources. More specifically, EU imports of soybeans from the United States collapsed to 971,000 MT in the first eight months of MY 2011/12 from over 3 million MT in the same period of the previous campaign. In the first eight months of MY 2011/12, the leading suppliers of soybeans were Brazil, Paraguay and Canada, with 76 percent of total EU imports of soybeans. In MY 2011/12, EU imports of soybean oil are estimated to sharply drop by 42 percent to 520,000 MT. Most of the decline can be attributed to imports from Argentina, which gradually replaces exports of soybean oil with exports of biodiesel to the European Union. During the first eight months of MY 2011/12, EU imports of soybean oil from Argentina (44,000 MT) declined by 277,000 MT from the same period of the previous year (322,000 MT), while EU imports of biodiesel increased by 301,000 MT (1.1 million MT up from 795,000 MT). Interestingly, EU exports of soybean meal are estimated to increase significantly to 700,000 MT, as a result of the increased demand from Turkey, which has become the EU’s primary destination in the first eight months of MY 2011/12, with 52 percent of the shipments. Turkey imports of soybean meal were almost as high in the first eight months of 2011/12 as they were in the entire MY 2010/11, with the European Union (and more specifically Germany) becoming the second largest supplier after Argentina. 7 4. Rapeseed Complex Coordinator: Leif Erik Rehder / FAS Berlin 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 0 7,000 6,900 Area Harvested 6,986 6,986 6,637 6,637 6,000 6,128 Beginning Stocks 1,809 1,809 1,792 1,730 1,700 1,537 Production 20,760 20,760 19,128 19,103 18,000 18,500 MY Imports 2,572 2,530 3,150 3,200 3,200 3,200 MY Imp. from U.S. 0 0 0 0 0 0 MY Imp. from EU 0 0 0 0 0 0 Total Supply 25,141 25,099 24,070 24,033 22,900 23,237 MY Exports 197 197 100 113 100 100 MY Exp. to EU 0 0 0 0 0 0 Crush 22,280 22,300 21,420 21,500 20,900 21,000 Food Use Dom. 0 0 0 0 0 0 Cons. Feed Waste Dom. 872 872 850 883 800 850 Cons. Total Dom. Cons. 23,152 23,172 22,270 22,383 21,700 21,850 Ending Stocks 1,792 1,730 1,700 1,537 1,100 1,287 Total Distribution 25,141 25,099 24,070 24,033 22,900 23,237 1000 HA, 1000 MT 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 22,300 21,420 21,500 20,900 21,000 Extr. Rate, 999.9999 1 1 1 1 1 1 Beginning Stocks 75 300 118 333 121 363 Production 12,827 12,450 12,331 12,000 12,032 11,700 MY Imports 224 224 280 230 200 230 MY Imp. from U.S. 3 0 0 0 0 0 MY Imp. from EU 0 0 0 0 0 0 Total Supply 13,126 12,974 12,729 12,563 12,353 12,293 MY Exports 251 251 270 300 200 260 MY Exp. to EU 0 0 0 0 0 0 Industrial Dom. 0 0 0 0 0 0 Cons. Food Use Dom. 0 0 0 0 0 0 Cons. 8 Feed Waste Dom. 12,757 12,390 12,338 11,900 12,056 11,700 Cons. Total Dom. Cons. 12,757 12,390 12,338 11,900 12,056 11,700 Ending Stocks 118 333 121 363 97 333 Total Distribution 13,126 12,974 12,729 12,563 12,353 12,293 1000 MT, PERCENT Oil, Rapeseed EU- 2010/2011 2011/2012 2012/2013 27 Market Year Begin: Jul Market Year Begin: Jul Market Year Begin: May 2010 2011 2012 USDA New USDA New USDA New Official Post Official Post Official Post Crush 22,280 22,300 21,420 21,500 20,900 21,000 Extr. Rate, 999.9999 0 0 0 0 0 0 Beginning Stocks 249 365 191 217 200 179 Production 9,258 9,300 8,901 9,000 8,685 8,800 MY Imports 488 488 630 620 500 500 MY Imp. from U.S. 70 70 15 50 15 50 MY Imp. from EU 0 0 0 0 0 0 Total Supply 9,995 10,153 9,722 9,837 9,385 9,479 MY Exports 214 214 250 258 150 150 MY Exp. to EU 0 0 0 0 0 0 Industrial Dom. 6,905 6,972 7,000 6,850 6,930 6,750 Cons. Food Use Dom. 2,680 2,700 2,267 2,500 2,110 2,400 Cons. Feed Waste Dom. 5 50 5 50 5 50 Cons. Total Dom. Cons. 9,590 9,722 9,272 9,400 9,045 9,200 Ending Stocks 191 217 200 179 190 129 Total Distribution 9,995 10,153 9,722 9,837 9,385 9,479 1000 MT, PERCENT MY 2012/13 The rapeseed harvest is well on its way in most member countries. Winterkill in main producing countries like Poland, Romania, Bulgaria and France will lead to a production decrease compared with the previous MY. However the production estimate has been increased due to favorable weather over the past few weeks. Yields will be better than expected, especially in Germany and Czech Republic. However, yields show a large variation across member states. Production estimates by member states are summarized in the table below. EU rapeseed production by country in 1000 MT COUNTRY 2011/12 2012/13 France 5360 5200 Germany 3870 4900 United Kingdom 2758 2640 Poland 1862 1650 Czech Republic 1077 1194 9 Total EU-27 19100 18500 Source: FAS/EU-27 posts Low EU production will require record rapeseed imports again to satisfy crushing demand. It’s expected that imports from the Ukraine will decrease due to lower production. Thus, majority of rapeseed imports will again come from Australia. Canada is expecting a bumper crop and their exports will continue to be strong. As a result of high imports, rapeseed crush will decrease slightly even though domestic rapeseed production is proportionally lower. The world market for soybeans is expected to stay tight and prices for products competing with rapeseed meal will remain high. Oversupply of rapeseed oil and weak markets for biodiesel are factors that will push down crushing capacity utilization. The slightly lower rapeseed crush will lead to reduced meal and oil production, as well as meal use in feed (to the benefit of sunflower meal) and oil use for biofuels (to the benefit of animal fats and recycled oils). 5. Sunflower Complex Coordinator: Mila Boshnakova / FAS Sofia Oilseed, Sunflowerseed EU 2010/2011 2011/2012 2012/2013 -27 Market Year Begin: Market Year Begin: Market Year Begin: Oct 2010 Oct 2011 May 2012 USDA New USDA New USDA New Official Post Official Post Official Post Area Planted 3,900 3,900 3,900 3,920 3,900 4,270 Area Harvested 3,739 3,718 4,235 4,200 4,400 4,250 Beginning Stocks 403 403 310 340 367 490 Production 6,919 6,933 8,215 8,270 8,250 7,980 MY Imports 379 379 280 280 350 315 MY Imp. from U.S. 55 0 40 0 50 0 MY Imp. from EU 0 0 0 0 0 0 Total Supply 7,701 7,715 8,805 8,890 8,967 8,785 MY Exports 555 555 620 620 600 630 MY Exp. to EU 0 0 0 0 0 0 Crush 6,114 6,100 6,960 7,050 7,150 7,100 Food Use Dom. Cons. 270 270 300 280 300 280 Feed Waste Dom. 452 450 558 450 550 420 Cons. Total Dom. Cons. 6,836 6,820 7,818 7,780 8,000 7,800 Ending Stocks 310 340 367 490 367 355 Total Distribution 7,701 7,715 8,805 8,890 8,967 8,785 1000 HA, 1000 MT Meal, Sunflowerseed EU 2010/2011 2011/2012 2012/2013 -27 Market Year Begin: Oct Market Year Begin: Oct Market Year Begin: May 2010 2011 2012 USDA New USDA New USDA New Official Post Official Post Official Post Crush 6,114 6,100 6,960 7,050 7,150 7,100 Extr. Rate, 999.9999 1 1 1 1 1 1 Beginning Stocks 223 83 296 286 515 426 10 Production 3,335 3,260 3,779 3,650 3,882 3,700 MY Imports 2,254 2,253 2,600 2,650 2,600 2,650 MY Imp. from U.S. 6 0 0 0 0 0 MY Imp. from EU 0 0 0 0 0 0 Total Supply 5,812 5,596 6,675 6,586 6,997 6,776 MY Exports 137 137 150 160 200 200 MY Exp. to EU 0 0 0 0 0 0 Industrial Dom. Cons. 0 0 0 0 0 0 Food Use Dom. Cons. 0 0 0 0 0 0 Feed Waste Dom. 5,379 5,173 6,010 6,000 6,410 6,100 Cons. Total Dom. Cons. 5,379 5,173 6,010 6,000 6,410 6,100 Ending Stocks 296 286 515 426 387 476 Total Distribution 5,812 5,596 6,675 6,586 6,997 6,776 1000 MT, PERCENT Oil, Sunflowerseed EU 2010/2011 2011/2012 2012/2013 -27 Market Year Begin: Oct Market Year Begin: Oct Market Year Begin: May 2010 2011 2012 USDA New USDA New USDA New Official Post Official Post Official Post Crush 6,114 6,100 6,960 7,050 7,150 7,100 Extr. Rate, 999.9999 0 0 0 0 0 0 Beginning Stocks 452 452 135 169 170 250 Production 2,563 2,560 2,918 2,950 2,997 2,960 MY Imports 768 768 1,130 1,000 1,400 1,050 MY Imp. from U.S. 0 0 0 0 0 0 MY Imp. from EU 0 0 0 0 0 0 Total Supply 3,783 3,780 4,183 4,119 4,567 4,260 MY Exports 166 166 180 194 160 160 MY Exp. to EU 0 0 0 0 0 0 Industrial Dom. 220 220 300 295 330 310 Cons. Food Use Dom. 3,259 3,200 3,530 3,360 3,750 3,450 Cons. Feed Waste Dom. 3 25 3 20 3 25 Cons. Total Dom. Cons. 3,482 3,445 3,833 3,675 4,083 3,785 Ending Stocks 135 169 170 250 324 315 Total Distribution 3,783 3,780 4,183 4,119 4,567 4,260 1000 MT, PERCENT Sunflower Seeds MY 2012/13 Persisting hot dry weather in major producing countries in June and July in South and South-East Europe (Spain, Italy, Hungary, Romania and Bulgaria) is reducing yield potential at an alarming rate. The period around the end- 11 July/ early August remains critical to crop development. In Spain and Romania, yield reductions are currently irreversible. At the same time, beneficial precipitation with moderate temperatures favored sunflower development in France, Germany and Poland. Yield expectations for EU are lower than USDA official numbers from 2.11 MT/HA to 1.87 MT/HA in line with newer yield estimates by member –states. Correspondingly, EU -27 sunflower production is revised down to 7.98MMT as a result of declines in major production countries: Spain (-26 percent as a combination of reduced plantings expectations and yields), Romania (- 10 percent); Italy (-4 percent), and Bulgaria (-3 percent). Prospects for MY12/13 imports are up 12 - 13 percent compared due to lower EU internal supplies, especially if yields in southern countries continue to decline. Imports will likely originate from Black Sea suppliers and will be concentrated in the first half of the marketing year. Still, imports are forecasted below USDA official data, mainly due to the latest developments in Black Sea export countries where exportable supplies are below previous expectations. In the second half of MY12/13, imports of sunflower seeds may be supplemented by imports of sunflower meal and sunflower oil. This is due to expected higher crush and availability in major exporters to the EU (Argentina, Russia, and Ukraine). In MY12/13, most EU member-states expect stable or slightly higher exports, especially earlier in the season, due to attractive prices in the region. Demand from traditional importers such as Turkey and the Western Balkans is expected to remain strong. Stable or slightly higher EU sunflower crush is anticipated in MY12/13. Demand is forecasted to be excellent in the first half of the marketing year, and to diminish gradually in the second half in anticipation of a potentially record crop in Argentina. Factors contributing to a stable or higher crush are the current deficit of hi-protein beans, meals and oils; expected attractive crush margins in the beginning of MY12/13; and increasing favorable feed/food demand for price competitive sunflower meal and oil. Stable or higher crush is forecast in Benelux, Bulgaria, France, Romania, Hungary, Portugal, Poland, and Slovakia while Spain, Italy, Austria, the UK and Germany expect slight declines. MY 2011/12 EU production is revised up 0.9 percent based on member-state final official production data. Thus far in MY11/12, through May, EU imports of sunflower seeds have slowed due to strong domestic use within major exporting countries. Imports to date are 58 percent of what EU imported last year at this time. Exports are strong, running 21 percent more than last year. Demand for competitively priced sunflower meal and oil, as well as good crush margins for sunflower seeds were high in the first half in MY11/12. Sunflower crush margins exceeded those for rapeseed, and were also higher than last year. In some member-states, crushers are substituting rapeseed for sunflower seed. Since February, sunflower seed demand and crush margins have been the same or slightly lower than for rapeseeds. The 16 percent higher EU-217 crush in MY11/12 is primarily attributable to increases in France, Italy, Spain, Benelux, Germany, Bulgaria, Hungary, and Romania. Sunflower Meal MY 2012/13 Sunflower meal output is forecasted to increase slightly as a result of projected stable or higher crush in MY12/13. Imports are likely to stay stable and to accelerate in the second half of the marketing year when domestic EU crush is projected to weaken and global supplies to improve. Exports are projected higher than in the current season due to favorable regional demand. Sunflower meal use in EU is likely to grow modestly in MY12/13 due to its competiveness versus other meals and better supplies in the first half of the marketing year. The situation may change in the second half, depending on exportable South America supplies as changes in EU feed demand. 12 MY 2011/12 In MY11/12, sunflower meal production was adjusted higher as a result of revised crush volume by member- states estimates but still below USDA official data. The meal use was revised upward to reflect higher meal use reported by major member states. Over the last several months, EU imports of sunflower meal have picked up. From January-May, imports rose by 60 percent compared to a year ago, and the growth in MY11/12 imports through may was 51 percent. The top four suppliers were Russia, Ukraine, Argentina and Moldova. Member-states have raised their previous estimates for imports by 15 percent. Current estimates for MY11/12 imports are at 2 percent above USDA official data but final trade figures may be even higher. Exports of sunflower meal up until May were 9 percent higher, with Egypt and Turkey accounting for half of all external export sales. Sunflower Oil MY 2012/13 Projected sunflower oil output in MY12/13 is only marginally higher than in the current year due to expected higher crush volumes. Imports are forecast to grow slightly for a number of reasons, such as good global supply and a deficit in competing vegetable oils in the first half of the marketing year. Member-states expect up to a 2 percent increase in imports compared to the current year. Consumption of sunflower oil in MY12/13 is currently projected to grow by 3 percent compared to the current year. Demand for sunflower oil is likely to be very favorable in the first half of the year due to its price competitiveness but it may fade when supplies of other vegetable oils become more available later in the year. MY 2011/12 The MY11/12 production estimate was revised upward to reflect member-states data showing a higher crush. Consumption estimate were also revised upwards; however, it still remains below USDA official data. 6. Olive Oil Coordinator: Marta Guerrero / FAS Madrid 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 0 Area Harvested 0 0 0 0 0 0 Trees 6,750 0 6,750 0 6,750 0 Beginning Stocks 530 530 331 454 291 504 Production 2,290 2,205 2,390 2,390 2,300 2,150 MY Imports 85 83 100 75 125 80 MY Imp. from U.S. 0 0 0 0 0 0 MY Imp. from EU 0 0 0 0 0 0 Total Supply 2,905 2,818 2,821 2,919 2,716 2,734 MY Exports 544 484 500 530 500 515 13 MY Exp. to EU 0 0 0 0 0 0 Industrial Dom. 50 50 50 50 50 50 Cons. Food Use Dom. 1,980 1,830 1,980 1,835 1,970 1,830 Cons. Feed Waste Dom. 0 0 0 0 0 0 Cons. Total Dom. Cons. 2,030 1,880 2,030 1,885 2,020 1,880 Ending Stocks 331 454 291 504 196 339 Total Distribution 2,905 2,818 2,821 2,919 2,716 2,734 1000 HA, 1000 TREES, 1000 MT MY 2012/13 The EU-27 is the world’s leading producer and consumer of olive oil. Olive oil production is concentrated in eight EU Member States: Spain, Italy, Greece, Portugal, Slovenia, Malta, Cyprus and France. Industry sources project a decline in olive oil production in MY2012/13, driven by a significant decline in Spain. The lack of winter precipitation, along with abnormally high temperatures at the beginning of summer, resulted in a poor blooming and ripening. Olive oil production in Italy is also projected to be lower in MY2012/13. Beyond the negative impacts that seasonal and weather elements had on the crop, growing and harvesting olives for olive oil production has become less and less profitable in Italy. Rising input costs and decreasing prices have forced many Italian oil olives growers to reduce production ― such as practices to reduce the effects of cyclical production, with trees bearing heavily in alternate years―to give up harvesting the crop or even to shut down. However, in Greece, the EU’s third largest olive oil producer, production is forecasted to increase slightly if weather remains stable. Despite the reduction in disposable income ―as a consequence of the economic crisis― consumption of olive oil remains steady in producing countries. With the internal EU demand for olive oil being stable, exports will be the key to maintain market balance. The pace of EU-27 exports could slow, driven by lower exportable supplies from Spain and because demand for high-priced vegetable oil remains weak amid ample supplies of alternative oils. Commission’s Olive Oil Action Plan In late June 2012, the EU Commission presented its Working Document for an Action Plan to Support Olive oil producers, which included measures to prevent fraud by strengthening quality controls and penalties in cases of non-compliance as well as measures to improve the position of producers within the value chain through stronger producer organizations with enhanced bargaining power. Also, a better use of the market management tools and market promotion is foreseen in the Commission’s draft. Producing Member States are weighing in on the draft and the final plan will likely be released during summer. In addition to the Commission’s plan, Member States can decide to include olive oil specific programs under the rural development pillar within the CAP post 2013 to assist with restructuring costs. 2011/12 MY 2011/12 is anticipated to finish with high ending stocks located mainly in Spain. High ending stocks and 14 growing competition from Northern Africa countries are seen as the major threats for EU olive oil producers. Olive oil production is becoming less profitable due to rising input costs and decreasing prices, which have triggered the Private Storage Mechanism. However, despite the low prices paid to farmers, current data show strong export markets and MY2011/12 exports are at record levels. Private Storage According to Regulation (CE) 1234/2007, the Commission may decide to authorize private storage aid, provided that the average price recorded on the market for more than two weeks is less than 1,779 Euros/MT for extra virgin olive oil, or 1,710 Euros/MT for virgin olive oil, or 1,524 Euros/MT for pomace olive oil having 2 degrees of free acidity. As a response falling prices, the EU Management Committee agreed to activate the Private Storage Aid (PSA) on several occasions. A summary of the tenders can be checked in the table below. Private Storage Aid Granted throughout MY2011/12 Tender Quantity Aid (Euros/MT and day) Period 10/27/2011 9,905 1.30 180 11/10/2011 34,432 1.30 180 02/23/2012 100,000 0.65 150 06/07/2012 86,281 0.65 180 06/21/2012 13,719 0.64 180 Related EU-27 and Country Reports: Oilseeds Reports Report Title | Select | Despite Winter Kill Modest Rebound in EU-27 Rapeseed Production | Oilseeds and Products | Vienna | EU-27 | 4/17/2012 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 decrease is mainly explained by 4 percent lower acreage of rapeseed due to unfavorable wet conditions during planting in Denmark, winterkill mainly in Bulgaria and Hungary, and drought in Romania. A marginal increase of sunflower area is projected due to re-sowing of winterkill areas almost offset by a decline due to drought in Spain. Soybean area is also expected to de... Oilseeds and Products Annual_Vienna_EU-27_4-5-2012 | Oilseeds and Products | Berlin | Germany | 1/13/2012 In recent years, the German Green Party has promoted policies designed to replace imported soybeans with domestically produced protein crops. Recognizing that an important political party is openly advocating an end to soybean imports - the largest U.S. agricultural export to Germany - we are providing updated analysis on the feasibility of this policy approach. We conclude that while it would be impracticable for Germany to produce enough plant protein to meet domestic demand, the campaign aga... Green Movement to End Soybean Imports – An Analysis_Berlin_Germany_1-6-2012 Related Topics Report Title | Corn and Sunflower crops Affected by Persistent Drought | Grain and Feed, Oilseeds and Products | Bucharest | Romania | 7/26/2012 Harvesting of winter crops is underway with yields lower than expected. Wheat quality is reported as very good, with a large percentage of the amount meeting milling criteria. Abundant rainfall in May improved soil moisture levels, but a persistent drought since June is affecting spring crops, namely corn and sunflower. Yields may drop further if no significant precipitation is received in the coming weeks. 15 Corn and Sunflower crops Affected by Persistent Drought _Bucharest_Romania_7-23-2012 | EU Biofuels Annual 2012 | Biofuels | The Hague | EU-27 | 7/10/2012 EU Member States (MS) are mandated to reach a minimum of 10 percent for renewable energy consumed in transport in 2020. In 2011, about a fifth of the domestic use of biofuels was imported from outside the EU. Despite a reclassification of bioethanol blends to a higher tariff rate, 2012 and 2013 imports from the United States are anticipated to remain at the same levels as last year, around 1 billion liters. Starting in the fourth quarter of 2012 and in 2013, overall EU imports of biodiesel ar... Biofuels Annual_The Hague_EU-27_6-25-2012 | Grains and Oilseeds Market Update | Grain and Feed, Oilseeds and Products | Sofia | Bulgaria | 5/14/2012 Bulgaria experienced challenging fall and winter weather that stymied seeding operations and brought record low temperatures and snowfall. Rapeseed recorded the greatest winterkill losses followed by some damage to barley, and minimal effect on wheat. Damaged rapeseed crops are expected to be replaced with corn and sunflower seed in 2012. Wet weather in May will be critical for crop development and, eventually, higher yield as spring to date has remained sparse of moisture. This follows M... Grains and Oilseeds Market Update_Sofia_Bulgaria_5-9-2012 Spain Enacts Biodiesel Production Quota System | Biofuels, Oilseeds and Products | Madrid | Spain | 4/30/2012 Right after Argentina announced the expropriation of 51% of YPF, a subsidiary of Repsol, the Spain's largest petroleum company, the Government of Spain decided to publish a Ministerial Order to establish a biodiesel production quota system. This Ministerial Order lays down the rules to allocate biodiesel production quotas to EU based biodiesel producers whose production would be eligible to meet consumption mandates. The implementation of this quota system would ultimately restrict third count... Spain Enacts Biodiesel Production Quota System _Madrid_Spain_4-24-2012 | Select | All eyes on the weather - again | Grain and Feed | London | EU-27 | 4/18/2012 The weather has already made its mark on the MY2012/13 crop and is likely to remain the focus over the coming months. A severe cold spell in late January and early February caused above average winter losses in some parts of the EU27, especially France, meaning some fields will need to be resown to spring crops. A prolonged dry period through March and into April will also become a concern if rains are not forthcoming ahead of harvest. In spite of this, 284MMT of grain is forecast to be harve... Grain and Feed Annual_London_EU-27_4-13-2012 | Preliminary Reports on Winterkill Loses in Poland | Grain and Feed | Warsaw | Poland | 4/4/2012 According to the preliminary evaluation significant loses in winter wheat and rapeseed plantations were reported in Western and Central Poland. Although detailed information about the damage are not available yet, two provinces already requested assistance from the central government to mitigate the effects of the winterkill loses. Preliminary Reports on Winterkill Loses in Poland_Warsaw_Poland_3-30-2012 | Portugal Biofuels Standing Report | Biofuels | Madrid | Portugal | 3/12/2012 There is no production of bioethanol for transport fuel in Portugal. Biodiesel production is dependent on diesel sales under a blending quota system and stands currently at around 340,000 MT per annum. Portugal transposed the Renewable Energy Directive in 2010 but the emission of Biofuel Entitlements (TdB) will only be dependent on the compliance with sustainability criteria from next 1 January 2013. Portugal Biofuels Standing Report_Madrid_Portugal_3-7-2012 | Bio-Fuels | Madrid | Portugal | 2/17/2012 There is no production of bioethanol for transport fuel in Portugal. The fossil fuel suppliers have managed to successfully lobby the Government into establishing mandates for liquid biofuels as a whole and to later introduce quotas for biodiesel only. Sales of biodiesel incorporated in gasoil diesel rose in 2010 to 375,000 tons as the share of biodiesel in road transport diesel is now 7% v/v, the maximum limit recommended by the Fuel Quality Directive EN 590 (FQD). However in the months to ... Portugal Biofuels Standing Report_Madrid_Portugal_11-10-2011 | Oilseeds and Products, Biotechnology, Biotechnology and Other New Production Technologies, Grain and Feed | Paris | France | 2/9/2012 Among European Union (EU) Member States, France ranks above average in being protein-independent. However, despite efforts to reduce dependence on imported North and South soybean meal as the number one source of proteins in animal feed, the amount of soybean meal used in France’s animal feed have remained relatively stable at 4 million metric tons (MT) for the past 25 years. At the same time, the use of rapeseed meal in animal feed has sharply increased from minor levels to more than 2 millio... Incentives and Plant Breeding Breakthroughs to Reduce Soy Imports_Paris_France_2-3-2012 | Bio-Fuels, Livestock and Products, Oilseeds and Products, Trade Policy Monitoring, Climate Change | The Hague | Netherlands EU-27 | 2/3/2012 During the last decade, the European retail sector has increasingly sourced sustainably produced food products. At the same time, food processors stepped into this market and increased their sourcing for sustainably produced raw materials. In this report, the movement towards sustainability in three commodity markets is briefly outlined, namely the biofuels market, the soya market and the market for meat products. Sustainability in the EU Commodity Markets_The Hague_Netherlands EU-27_1-31-2012 | Bio-Fuels | Rome | Italy | 1/13/2012 16 The Italian biofuels industry is slowly developing to meet the EU’s 2020 mandatory 10-percent biofuel use in transportation fuels. However, lack of support from the government, stiff competition from South America, and a complicated and uncertain EU and Italian legislative framework are severely hampering the industry’s growth. Italian biodiesel output is expected to fall some 32 percent to about 500,000 MT in 2011 while the bioethanol fuel production is still not relevant. Italian Biofuels 2011_Rome_Italy_12-29-2011 | Bio-Fuels, Oilseeds and Products | Madrid | Spain | 11/22/2011 This report provides an overview of Spain’s biodiesel sector including MS specific policy, production supply and demand data. Spain is among the three top MS in terms of biodiesel production capacity and consumption. However, industry sources report a very low use rate of installed capacity caused mainly by stiff competition from third-country biodiesel imports to Spain. The sustainability criteria provisions within the Renewable Energy Directive (RED) have recently been transposed to national regulation by... Spain's Biodiesel Standing Report_Madrid_Spain_11-7-2011 17
Posted: 15 August 2012

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