Chart of the week (42)
More pulses in compound feed
The changes in agricultural aid have given a boost to the production of legumes. Pulses are mainly used in farm-made feeds as a major source of protein. However, the mixed feed industry has discovered home-grown pulses too. In view of the Greening requirements, German farmers planted around 160,400 hectares with legumes in 2015. The harvest of peas, field beans and sweet lupines amounted to around 450,000 tonnes. This was a level of quantity that also aroused the interest of the German mixed feed industry, which, according to the Federal Office for Agriculture and Food (BLE), used around 88,000 tonnes of pulses in compound feeds in 2015/16. Although this figure is small compared to that of cereals, it provides a clear signal after several years of decline. After all, the quantity processed was more than twice the previous year's volume. No other feed component has seen such growth rates. However, the chances are that this trend could soon end as the EU Commission plans to introduce more stringent requirements for receiving the Greening payment, Agrarmarkt Informations-Gesellschaft mbH reports. The tightening of conditions would include a ban on applying crop protection products in legume production, although control of pests and diseases is essential to maintaining crop yields and quality. As a result, growing pulses would become unattractive to farmers. Pulses would sink back into their tiny niche, delivering a heavy blow to the German government's protein plant strategy.
Chart of the week (41)
Strong demand for German rapeseed oil in 2015/16
German exports of rapeseed oil hit a three-year high in the 2015/16 marketing year. Order volumes from some EU member states and third countries grew substantially. German 2015/16 exports of rapeseed oil climbed significantly, according to figures published by the German Federal Statistical Office. At around 1.1 million tonnes, they were up almost 16 per cent from 2014/15. Around 91 per cent went to other EU countries, which was 3 per cent less than the previous period. The Netherlands, the hub of international trade, were again the main buyer, accounting for 484,000 tonnes (up 7 per cent). The Netherlands were followed by Poland, where imports were up by 53 per cent to 157,000 tonnes. Belgium occupied third place, despite a massive decline in imports to 87,000 tonnes. The EFTA states (Iceland, Norway, Switzerland), on the other hand, purchased a record volume of 78,000 tonnes, Agrarmarkt Informations-Gesellschaft mbH reports.
Chart of the week (40)
Strong increase in rapeseed imports in 2015/16
The German Federal Statistical Office reports significant increases in rapeseed imports in 2015/16, which reached a record peak at 5.4 million tonnes. In the 2015/16 marketing year, the oil mill industry imported 5.4 million tonnes of rapeseed. This was up just over 14 per cent from a year earlier and the highest quantity ever. Traditionally, the largest quantity came from the EU-28, although their share decreased considerably to 86 per cent. The main EU supplier, France, supplied 1.7 million tonnes, approximately 12 percent more than the previous year. In addition, German imports of non-EU rapeseed via the Netherlands rose to just under 672,500 tonnes. According to information published by Agrarmarkt Informations-Gesellschaft mbH, this quantity translates to a record high and double the 2014/15 figure. The largest third-country supplier, Australia, was overall third most important supplier despite substantial growth in exports to an all-time high of 636,000 tonnes.
Chart of the week (39)
Rapeseed meal remains competitive
Following the sharp slump in prices for soybean meal, prices for extracted rapeseed meal have reached the lower price threshold. Price support is derived from the fact that demand is still focussed on GM-free sources of protein, and extracted rapeseed meal is a preferred choice in this respect.
In Germany, prices for genetically modified (GMO) soybean meal have dropped significantly in light of a record world supply in 2016/17. At the end of September 2016, nearby supplies were at the lowest level since April 2016. Extensive global supplies and sluggish demand put pressure on asking prices in Germany. Buyers' interest in extracted rapeseed meal has nevertheless been growing, because extracted rapeseed meal is increasingly used in dairy farms as a domestic source of protein. The reason is that more and more dairies and, ultimately, retailers are demanding products labelled “GMO free” to meet consumer requirements. According to information published by Agrarmarkt Informations-Gesellschaft mbH, GMO-free soybean meal is also in strong demand, so that prices remain at their present level of EUR 100-110 per tonne above the price for GMO soybean meal. This price would be the actual reference price for extracted rapeseed meal, given that the meals are interchangeable.
Chart of the week (38)
Global 2016/17 vegetable oil production to hit record level
Palm oil, soybean oil, rapeseed oil and sunflower oil account for around 87 per cent of production. The remainder consists of coconut oil, olive oil and peanut oil, among others. Palm oil and sunflower oil are expected to see the biggest rise in production in 2016/17, with volumes up approximately 10 per cent from the previous year. Palm oil production is predicted to recover from its sharp slump in the wake of El Niño in 2015/16 and is headed for a record high. Soybean oil production is estimated to increase by 3 per cent over last year, which will also translate to a record level. Only rapeseed oil is anticipated to see a decline to around 26.6 million tonnes. The falloff is due to a significant drop in feedstock supply on a global scale, Agrarmarkt Informations-Gesellschaft mbH reports.
Chart of the week (37)
Reduced crop obliges mills to adjust purchasing plans
In their efforts to source rapeseed, oil millers accepted higher prices than the previous week. However, traders didn't always respond to bids, as supply from farmers was short. Overall, the rapeseed market picked up somewhat, but supply remained tight. Oil millers managed to keep their premiums stable, even as prices in Paris rose. Growing demand for rapeseed oil for use in biodiesel fuel production has improved margins for mills, enabling the millers to accept higher asking prices. According to information published by Agrarmarkt Informations-Gesellschaft mbH, bids ranging from EUR 385 - 390 per tonne free of all charges slightly stimulated trading. However, the German cash market remained undersupplied. Processors are expected to still see shortfalls even in September 2016. They had anticipated increased supplies of new-crop rapeseed and lower prices for the month. However, due to the poor rapeseed harvest, these prospects have not materialised. Now supply is short, and there is hardly any prospect of an improvement. One of the reasons is that farmers are still holding on to their produce, which is hardly surprising in view of current price trends. Buyers in the north agreed to EUR 363 per tonne, but that was only EUR 1 per tonne more than a week earlier. Although mark-ups reached up to EUR 5 per tonne in remote regions, producers still considered the higher levels on offer to be of little interest.
Chart of the week (36)
Biodiesel in blends rebounded to 6 per cent
The comparatively low purchase prices for biodiesel have stimulated demand appreciably. The June 2016 volume of biodiesel in blends surged to 6.22 per cent, the highest level since the beginning of the year. Total June 2016 consumption of diesel fuel shot up by just less than 5 per cent, to 3.3 million tonnes, from the previous month. Consequently, the volume amounted to around 18.6 million tonnes in the first half year. This translates to a 7 per cent rise year-on-year. The trend also drove up consumption of biodiesel - to a much lower degree - by one per cent, to 1.1 million tonnes. In other words, the volume of biodiesel in blends remained below the level of 6 per cent most of the time. Consumption figures did not rise substantially until June 2016. The Federal Office for Economic Affairs and Export Control (BAFA) reported that demand for biodiesel for blending amounted to 203,223 tonnes that month. The was the largest quantity in more than one year. If demand for mineral diesel continues to rise, it could also support sales of biodiesel. However, this outlook is dampened by the fact that over the past few weeks biodiesel prices have continuously increased compared to diesel, according to Agrarmarkt Informations-Gesellschaft mbH (AMI).
Chart of the week (35)
Biodiesel trade gap has narrowed
Demand for German biodiesel waned significantly in the first half of 2016. At just over 570,000 tonnes, exports to other European countries was down just about one fifth from the 2015 reference period. Above all, countries that absorbed only small amounts the previous year bought even less in 2016. By contrast, sales to the main destinations, such as the Netherlands and Poland, increased. At the same time, Germany imported more biodiesel from abroad. At 390,000 tonnes, the rise amounted to 46 per cent. More imports came via the European import ports in the Netherlands and Belgium, as well as from Poland and Austria. By contrast, direct shipments from Southeast Asia saw a slight dip. Agrarmarkt Informations-Gesellschaft mbH (AMI) indicated that the foreign trade statistics consequently reflect that nevertheless biodiesel exports continue to play an important role in the utilization of German biodiesel plants. There is currently no way of knowing whether this trend is going to continue in the second half year. The growing use of biodiesel from Used Cooking Oil Methyl Ester (UCOME) may be one factor explaining the current slump in foreign demand. UCOME may be counted double towards renewable quota obligations in countries like the Netherlands, Poland and Great Britain.
Chart of the week (34)
Wholesale fuel prices are on a firm trend
Wholesale prices for agricultural diesel, biodiesel and rapeseed oil have gone up considerably in August. Rapeseed oil fuel and biodiesel hit record levels. Agricultural diesel continued to be the lowest-priced alternative despite the price rise. Prices for agricultural diesel and biodiesel were raised massively in mid August 2016 as manufacturers' feedstock costs surged. In other words, WTI crude oil prices shot up by around 9 per cent within a single week. Prices of vegetable oils used in biodiesel fuel production also rallied in the wake of poor yields. Rapeseed oil for nearby delivery most recently cost just less than 69 euro cents per litre, a price not seen since mid December 2015. As a result, the selling price for standard biodiesel with an around 60 per cent potential for reducing greenhouse gas emission compared to fossil fuels rose to 75 euro cents per litre. According to Agrarmarkt Informations-Gesellschaft mbH (AMI), this price not only translates to an eight-month high, but has also increased the gap over agricultural diesel to almost 13 euro cents per litre.
Please find further Charts of the week in our Archive.