Record oilmeals production likely 

14/7/06 (Business Line)  - World oilseed output in the upcoming 2006-07 season is projected at 386.65 million tonnes (mt), marginally lower than previous year's 389.59 mt, the US Department of Agriculture (USDA) said in its latest report on world agricultural supply and demand estimate.

World oilmeals production is projected to reach a new high of 220.11 mt (212.63 mt), while production of major vegetable oils is expected to show a 4 mt increase to a record 120.07 mt (115.96 mt). Ending vegoil stocks are projected at decline to a recent low of 7.93 mt, from 9.01 mt of 2005-06.

In 2006-07, global soyabean output at 220.18 mt is expected to remain little changed from the previous year's 219.49 mt. For the second year in a row, US soyabean output is projected to decline. For 2006-07, it is currently forecast at 81.92 mt against 84 mt in the previous year.

Brazil, Argentina

On the other hand, both Brazil and Argentina are likely to harvest slightly larger volume. USDA has placed the numbers at 56 mt and 41.30 mt, respectively, against previous year's 55 mt and 40.50 mt. It must, however, be emphasised that soyabean planting in South America is several months away.

The agency has projected a sharp increase in China's soyabean import requirement. For 2006-07, it is placed at a record 31.50 mt (27.50 mt) to service the country's growing demand for animal feedstuffs and vegetable oil.

India's soyabean extraction production is projected at 4.40 mt and exports at 3.20 mt.

India's soyabean oil import is estimated at 1.75 mt and production at close to 1 mt.

Critical weeks ahead

The next 4-6 weeks are critical for the global vegetable oil market as weather aberrations, if any, during the growing period can affect yields and output. In addition, biodiesel demand, caused by high crude prices, is expected to result in increased diversion for vegetable oil for energy purposes.

World vegetable oil prices are, therefore, seen having a limited downside, notwithstanding a record 1.65 mt of crude palm oil stocks in Malaysia.