30/06/2011 (Business Times) - Palm oil will be in greater demand in the season starting in October as production of other oilseeds rises at a slower pace, Oil World said.

Growth of soybean, rapeseed and canola supplies in particular is expected to slow, which will increase dependence on rising imports of oils and fats, the Hamburg-based researcher said in a report yesterday.

Exports of 17 oils and fats will climb to 70.3 million metric tons in the year through September 2012 from 67.2 million tons in the prior period, Oil World said. Palm oil may account for almost 56 per cent of world shipments, compared with 47.5 per cent in 2001-02, it said.

“Palm oil should be available on the world market at sufficiently large discounts relative to soya oil and other oils and fats to facilitate the expected increase in exports,” Oil World said.

 
More palm oil may be exported as biodiesel, according to the report. Indonesia and Singapore have increased monthly shipments of biodiesel to a combined 150,000 tons, with potential for further growth, Oil World said.

“The increasing requirements of soya oil for biodiesel production in Argentina, Brazil and the USA will curb the growth in soya oil exports in 2011-12,” Oil World said.

U.S. soy-oil exports have dropped because of higher domestic requirements for biodiesel production, according to the researcher. It predicted combined biodiesel output in Argentina and Brazil will rise this year to 4.7 million tons from 3.9 million tons a year ago.

Soy-oil exports globally will come to 10.5 million tons at most for the next season, up from 10.2 million tons estimated for the 2010-11 year, the report showed.

World supplies of rapeseed and canola oils probably will be tight next season due to crop failure in the European Union and lower-than-expected production and export supplies in Ukraine, Oil World said. -- Bloomberg