4/11/2005 - Global stocks of soybeans continue to rise after a draw-downin recent years, with production to reach 52.6 million tonnes in 2004/05,15.2 million tonnes more than in 2003/04.

Forecasts from the US department of agriculture predict global soybeanproduction to reach 219.2 million tonnes.Soybeans represent the starting point for a range of food ingredients -oil, proteins, isoflavones, even milk: products that are enjoying growingpopularity on the back of consumer demand for health-positioned foods.

This small increase in production could contribute to less pricevolatility for soy, which witnessed 15-year highs in recent years.

Investment bank Goldman Sachs predicts the high inventory levels willlimit any ‘upside price’ for soybeans in the near term, despiteindications that production may suffer over the next few years.

The bank cites the recent discovery of soy rust in the US, and earlyindications that the Brazilian 2005/2006 crop may fail expectations, asvulnerabilities to global production.

"However, the record high level of global soybean stocks suggests it wouldtake several years of bad harvests to run down inventories to the pointwhere prices would be significantly pressured to the upside," says GoldmanSachs.

Soy oil and palm oil are, currently, the two most popular vegetable oilson the global food market. Palm oil, second only to soybean oil in termsof global demand, accounts for 28 per cent of total edible oil sales.