Chart of the week (09 2024)

EU rapeseed imports tumbled to one third below previous year's level

 

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UFOP: development of producer prices requires change in double counting of biofuels from wastes and residues

EU-27 rapeseed imports in the current crop year 2023/24 (July-February) amount to 3.5 million tonnes, falling as much as one third short of the previous year's volume. However, imports rose substantially the previous season. Also, the somewhat larger EU rapeseed harvest reduced import demand. The import volume exceeds that of the 2021/22 season by 6 per cent.

According to information published by Agrarmarkt Informations-Gesellschaft (mbH) (AMI), Ukraine has maintained its top position among the key rapeseed suppliers to the EU in the current crop year despite the continuing war. With 2.4 million tonnes, just under 13 per cent down on the same period a year earlier, the country accounts for 67 per cent of EU rapeseed imports. This share compares to 52 per cent in 2022/23. Australia contributed much less due to a smaller harvest, but nevertheless ranks second most important supplier to the EU with 768,000 million tonnes and a share of 22 per cent. A year earlier, the country delivered 2.0 million tonnes - more than twice the amount supplied in the current crop year. Imports from Canada also plummeted. At 42,500 tonnes, the EU received only a fraction of the previous year’s amount of 230,800 tonnes. In other words, Canada's share in total EU imports dropped 3 percentage points to 1.2 per cent. Moldova and Serbia gained noticeably in importance as rapeseed suppliers to the EU and increased their imports many times over to 233,100 tons and 107,200 tons respectively. Taking Moldova as an example, it can be assumed that most rapeseed exported to the EU originates from Ukraine, as Moldova itself produced approximately 75,000 tons of rapeseed in 2023.

The Union zur Förderung von Oel- und Proteinpflanzen e. V. (UFOP) has noted that Ukraine is a key supplier of rapeseed and must continue to be in the future in order to cover EU oil mills' rapeseed requirements. The UFOP has emphasised this need in view of the current critical debates and responses relating to imports from Ukraine. According to the association, the issue of currently low producer prices for rapeseed is first and foremost due to the strong rise in biodiesel imports from China, which imports can be counted double towards greenhouse gas quota obligations in Germany. Biodiesel based on rapeseed or waste oils in accordance with Annex IX, Part B, of the Renewable Energy Directive (Red II), on the other hand, can only be counted once. What is more, these volumes are subject to a cap (4.4 per cent cultivated biomass / 1.9 per cent waste oils). The biodiesel imports from China result in physical commodity being squeezed out of the market due to the crediting of virtual quotas. Consequently, demand for biodiesel feedstock is in decline and price pressure on the rapeseed and vegetable oil market is increasing.

The UFOP has called on the Federal Ministry for the Environment to use its regulatory powers in a forward-looking manner for the purposes of complying with climate change mitigation commitments by raising greenhouse gas quota obligations prematurely. Otherwise, a cap will also have to be introduced for biofuels from Annex IX, Part A, of the Directive. The biodiesel imports from China, which are suspected of being fraudulent, have clearly revealed the shortcomings in regulation and enforcement with regard to on-site inspections. This needs to be tightened up urgently, for example by amending trade agreements. The UFOP has emphasised the need for action in view of the implementation of RED III, in the process of which implementation other member states, such as Austria, will introduce a greenhouse gas quota obligation.

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Chart of the week (08 2024)

IGC expects lower production of dry peas in Canada - UFOP calls for more support for domestic protein crops

 

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Whereas in Russia more dry peas were presumably harvested than a year earlier, Canada's harvest fell well short of the previous year's output. Against this background, global production will probably only just exceed the previous year's level. 

The International Grains Council (IGC) assumes that world dry pea output will amount to 13.9 million tonnes in the marketing year 2023/24. According to investigations conducted by Agrarmarkt Informations-Gesellschaft (mbH), this would translate to a 0.5 per cent increase on the previous season. The forecast is mainly based on a raised harvest estimate for Russia, where the harvest grew around 400,000 tonnes on the previous year to 4 million tonnes. This means that Russia remains the largest dry pea producer worldwide. Canada ranks second with production amounting to 2.6 million tonnes and a decline of 800,000 tonnes or 23.8 per cent. The historically low output of 2.2 million tonnes recorded in the 2021/22 season was only just surpassed.

With production amounting to 2.0 million tonnes and an increase of around 100,000 tonnes, the EU-27 follows in third place, especially based on a larger crop in Romania. In contrast, dry pea production in Germany declined around 59,000 tonnes to 264,000 tonnes. Poor weather conditions with high temperatures and lack of rain in spring, followed by excessive rainfall in the main growing season, played a vital role.

The US recorded an increase of around 100,000 tonnes on 2022 to 800,000 tonnes. The Ukrainian feed pea harvest in 2023 is projected at 400,000 tonnes, up around 100,000 tonnes on the previous year's level.

In view of the EU's large demand for feed protein imports, the Union zur Förderung von Oel- und Proteinpflanzen e. V. (UFOP) has once more underlined the great exploitable potential for growing dry peas and other large-grained pulses in Europe. To unlock this potential in Germany, the German Ministry of Agriculture would have to provide stronger and reliable support to the protein plant strategy in terms of product development and sales promotion, providing economic incentives for expanding crop rotation with grain legumes in the long term.

The association has said that the option recently launched by the EU Commission to meet the so-called GAEC 8 requirements (non-productive areas and landscape elements) by growing protein crops is basically also a good approach to expanding production. The war in Ukraine has once again clearly shown the importance of food security. Instead of taking land out of production, preference should be given to taking production-integrated measures to conserve biodiversity. According to the UFOP, the production of protein crops in particular has numerous positive effects on the environment and agricultural soils, such as biological nitrogen fixation and the provision of food and habitat for flower-visiting insects.

However, the application of crop protection products is essential for stable and reliable harvests of field beans, grain peas, sweet lupins and soybeans in Germany. The UFOP has stressed that, therefore, if the suspension of GAEC 8 is also to result in extensive and beneficial production of grain legumes, the ban on chemo-synthetic plant protection products will have to be lifted.

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Chart of the week (07 2024)

Argentina's soybean harvest back to its old size

 

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Brazil and Argentina are set to maintain their shares in the global soybean market this crop year. Whereas Brazil's harvest is likely to fall just short of the previous year's bumper crop, Argentina is expected to double its soybean production. 

Brazil, the US and Argentina are the world's main soybean producing countries, collectively accounting for 80 per cent of global soybean output. China follows a long way behind with a share of 5 per cent. According to estimates provided by the US Department of Agriculture (USDA), Brazil is set to harvest around 156 million tonnes of soybeans in the current crop year. This compares to the previous year's record volume of 162 million tonnes. Brazil is consolidating its number one position ahead of the US based on a 1.3 million hectare expansion in soy production area to 45.9 million hectares. In the US, the soybean harvest was already complete by the end of the year 2023. It amounted to around 113.3 million tonnes, which translates to a decline of around 2.9 million tonnes year-on-year.

In Argentina, the world's third biggest producer, the harvest is seen to be significantly larger than in the historically weak previous year, when persistent drought and heat significantly diminished yield potential. More specifically, the output is even likely to double on the previous year to 50 million tonnes, as investigations conducted by Agrarmarkt Informations-Gesellschaft (mbH) suggest. Alongside significantly higher yields, an expansion in soy area is also having an impact. On the other hand, according to the latest USDA estimate China anticipates an increase in harvest volume of around 556,000 tonnes on the previous year to 20.8 million tonnes.

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Chart of the week (06 2024)

Global vegetable oil prices stabilized

 

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The FAO vegetable oil price index averaged 122.5 points in January, which was marginally up on the previous month, but still 12.8 per cent below the January 2023 level. 

In January, higher palm oil and sunflower oil prices contrasted with, and practically offset, lower soybean and rapeseed oil prices. The rise in palm oil prices was first and foremost due to seasonally lower production in the most important Southeast Asian palm oil-producing countries. Another reason was concerns about poor growing conditions in Malaysia. Prices for sunflowerseed oil also climbed somewhat. Investigations conducted by Agrarmarkt Informations-Gesellschaft (mbH) suggest that the main factor driving the increase was higher demand, especially from Turkey. In contrast, prices for soybean and rapeseed oil declined because the soybean harvest that has started in South America is set to increase supply of South American soybeans in the near future. Moreover, continued large rapeseed stocks in the EU weighed prices down. 

International grain prices weakened across the board in January 2024. The FAO cereal price index was at 120.1 points, which was down 2.2 per cent from the previous month's level. Year on year, the decline amounted to as much as 18.6 per cent. Wheat prices were weighed down by continued strong competition between the main exporters and dwindling demand. International prices for maize also fell sharply on the previous month. They main reasons were better growing conditions in Brazil and prospects of an abundant maize harvest in Argentina, which is expected to generate large export volumes for both countries. Also, the US has large maize stocks following the 2023 harvest.

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Chart of the week (05 2024)

German exports of oilseed meal increased

 

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Exports of both rapeseed and soybean meal rose sharply in the period from July to November 2023 compared to the previous year. The commodities were mainly sold to other EU countries.

According to information published by the German Federal Statistical Office, Germany exported a total of 783,000 tonnes of rapeseed meal in the period July to November 2023. This translates to a 30 per cent rise on the same period in 2022. Exports of soybean meal also increased during this period, though less strongly. At 738,000 tonnes, Germany delivered around 8 per cent more than in the period July to November 2022.

According to investigations conducted by Agrarmarkt Informations-Gesellschaft (mbH), the largest share of German rapeseed meal went to other EU countries. The Netherlands was the main buyer, as it was in previous years. From the Dutch ports, the commodities are then shipped around the world. From July to November 2023, Germany sold around 333,900 tonnes to this neighbouring country. This was up around 32 per cent year-on-year. Denmark ranked second among the most important recipients, with shipments growing just less than 8 per cent to around 92,000 tonnes. German deliveries to Finland rose as much as 45 per cent to 78,800 tonnes on the first five months of the 2022/23 marketing year. Rapeseed meal exports to Spain, Sweden and Ireland also grew.

Soybean meal exports also went mostly to other EU countries. The largest recipient of soybean meal from Germany was Denmark. The country is one of the leading producers of pork and therefore uses large volumes as feedstuff. In the period from July to November 2023, Germany delivered 163,600 tonnes, approximately 5 per cent less than in the same period a year earlier. Exports to Austria and Poland also declined, whereas shipments to the Czech Republic, Lithuania and Turkey increased.

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Chart of the week (04 2024)

Germany ranks third among EU biodiesel exporters - UFOP calls for inclusion of HVO in official statistics

 

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According to recent information published by EUROSTAT, Germany delivered around 9 per cent more biodiesel (FAME) to other EU member states in the first nine months of the 2023 calender year than in the same period in 2022. This is the conclusion Agrarmarkt Informations-Gesellschaft mbH (AMI) has reached after analysing the official statistics.

With intra-Community exports amounting to 1.6 million tonnes, Germany ranks third among the biggest biodiesel exporters of the European Union. As before, the Netherlands is the main market, as the country acts as the central hub for trade within the EU and with non-EU countries. Not only did the Netherlands receive by far the largest tonnage – 742,000 tonnes – but it also took around 34 per cent more than in the period January until September 2022. It is followed by Belgium and Poland. Whereas Poland increased its imports 18 per cent to 227,000 tonnes, Belgium reduced its imports around 32 per cent to 349,000 tonnes. Exports to Austria saw the biggest rise with shipments tripling to 72,000 tonnes. France, in turn, doubled its imports on the previous year to 73,000 tonnes. There were also changes in German biodiesel imports. More specifically, 2023 imports from the Netherlands in the period January until September rose 12 per cent to 706,000 tonnes year-on-year. By contrast, Belgium only delivered 164,000 tonnes, which translates to a drop of around 38 per cent. Imports from Poland virtually remained unchanged from the previous year's level at 66,000 tonnes. 

German exports of UCOME, biodiesel made from used cooking oil, rose markedly in the period from the first to the third quarter of 2023. At 228,000 tonnes, Germany delivered around 17 per cent more to other EU member states than in the same period 2022. Again, the Netherlands was the largest recipient country, taking 182,000 tonnes – a 9 per cent rise year-on-year –, followed by Belgium with 25,000 tonnes and a 43 per cent increase. In contrast, during the same period German UCOME purchases from other EU member states dropped 19 per cent to 199,000 tonnes year-on-year. Although the Netherlands delivered the lion's share of 128,000 tonnes, this was still down 7 per cent on the same period a year earlier. 

The Union zur Förderung von Oel- und Proteinpflanzen e. V. (UFOP) has pointed out that EUROSTAT does not record the share of hydrotreated vegetable oil (HVO), which is important for the German market. The association has therefore urged to cure this flaw in the official statistical documentation. HVO has become an important option for meeting quota obligations not only in Germany, but also in other member states. The UFOP has noted that the number of HVO producers is increasing both in the EU and worldwide. According to the association, this trend is set to continue, given the technical blending rate limits for biodiesel (B7 / B10) and rising demand for biokerosene. 

The UFOP has insisted that import and export volumes within the EU and with third countries should be documented in a timely manner in order to ensure market transparency and assess volume trends. Since no statistics are kept for HVO, the UFOP has referred to the Evaluation and Progress Report of the German Federal Office for Agriculture and Food (BLE). For 2022, the report identifies an HVO import volume – HVO is not produced in Germany – of 385,000 tonnes from waste oils and 90,000 tonnes from palm oil for crediting towards GHG reduction quotas. Just how much of this can be counted double a result of being classified as waste in accordance with Part A of Annex IX of the RED II is not known and/or has not been published. 

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Chart of the week (03 2024)

IGC sees decline in global rapeseed area for the 2024 harvest

 

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The world rapeseed area in the coming crop year is expected to be smaller than the previous year. Especially in Ukraine, the International Grains Council (IGC) expects the production area to decrease. 

High global availability of rapeseed led to a sharp drop in prices and futures market quotations in the past year. The International Grains Council (IGC) therefore expects the world rapeseed area to decline in 2024/25. The area planted with rapeseed is estimated to drop 1.5 per cent year-on-year to 42.4 million hectares, which still clearly exceeds the long-term mean.

The IGC provisionally anticipates the EU rapeseed area to decrease 2.7 per cent to 6.0 million hectares, but the decline will probably be slightly smaller given the continued strong demand for rapeseed products from the feedstuff, food and industrial sectors. Furthermore, in recent years a number of harvests produced high yields despite unfavourable growing conditions. Against this background, the average share of rapeseed area in EU farms' crop rotation is set to remain unchanged. 

Following a year with a record area sown with rapeseed, the production area in the Black Sea region will probably be reduced in the 2024/25 season. The decline is almost exclusively due to a decrease in rapeseed area in Ukraine. With the growing area currently estimated at 1.6 million hectares, it will probably fall 22.5 percent on the current crop year. Russia is seen to grow rapeseed on an area of 2.0 million hectares in 2024, which translates to an 8.2 per cent reduction on the year. 

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Chart of the week (02 2024)

Assessing land use for biofuels properly - UFOP: feedstock production for biofuels buffers supply to safeguard global nutrition

 

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According to investigations conducted by Agrarmarkt-Informations-Gesellschaft (mbH), the total world area planted with cereals, oilseeds and protein, sugar and fibre crops as well as fruit, vegetables and nuts amounted to approximately 1.2 billion hectares in 2022. The largest share was used directly or indirectly, via livestock feeds, for human nutrition. Only around 6 per cent of the area was used to produce biofuels.

At the same time, biofuel production is in most cases very obviously located in places where there is a surplus of feedstock anyway (mainly maize, palm oil and soybean oil). If the option of using the surplus to produce biofuels did not exist, it would have to be placed on the global market, where it would weigh heavily on feedstock costs. The conversion of agricultural feedstock to biofuels reduces the production overhang, generates extra value added and reduces the need for foreign currency for imports of crude oil or fossil fuels. The latter is primarily a problem in poorer countries.

Another advantage of biofuel production is that it also yields high-quality protein feedstuffs, which are in high demand. The share and quality of these protein feeds have a strong influence on commodity prices and consequently on the size of the area planted. This applies especially to soybeans. Biofuels are by no means the price drivers in the commodities markets. In an emergency situation, the feedstocks required in biofuel production will be available for food supply (for example, rapeseed/sunflowerseed oil during the Ukraine crisis). If arable farming were to be extensified for political reasons – an aim the EU Commission is pursuing with the reduction strategy for fertilisers and plant protection products under the Green Deal – this option of  "buffering" food demand would no longer be available.

The Union zur Förderung von Oel- und Proteinpflanzen e.V. (UFOP) has pointed out that high-quality protein is obtained as a by-product of biofuel production and used for livestock feeding purposes or directly in the human diet. This aspect is not given sufficient consideration in the debate about global changes in land use. According to the UFOP, the percentage of area used for rapeseed-based protein production should be subtracted and accounted for in the calculation of land required for biofuel production – a figure frequently referred to. The association has therefore urged that this supply and buffer effect in terms of land pressure in third countries should also be taken into account in the assessment of the crop biomass potential as part of the National Biomass Strategy (NABIS). With rapeseed having a share of 60 per cent feed protein, only 40 per cent of the crop area should be allocated to the production of biofuels, the UFOP has argued. From the UFOP's perspective, this would be a fair and proper approach, because missing protein volumes would have to be made up for by imports that would require additional land use.

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Chart of the week (51 2023)

Record year of oilseed production - UFOP: proof of origin creates acceptance

 

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According to current USDA estimates, global production of oilseeds in the crop year 2023/24 is set to hit a peak of around 661.0 million tonnes, which would be up around 4 per cent year-on-year. 

Global processing of oilseeds is also set to rise to a record high of 542.5 million tonnes, according to the most recent USDA outlook. This would be up around 19.1 million tonnes on the crop year 2022/23. Global ending stocks will presumably amount to 131.7 million tonnes, which would exceed the previous year's level by 11.5 tonnes. Nevertheless, ending stocks are seen to be clearly below the 2018/19 season's 134.0 million high. World trade in oilseeds will presumably drop 5 million tonnes to 196.8 million tonnes.

At 398.9 million tonnes, the current crop year's soybean harvest is expected to be larger than ever before. Global output of sunflower seed is also seen to increase on the year, 8 per cent to 56.8 million tonnes. By contrast, world rapeseed production is expected to decline 2 per cent to 87.0 million tonnes. According to Agrarmarkt Informations-Gesellschaft (mbH), this outlook is based on declines in key rapeseed-producing countries, especially Australia. It should be noted that the USDA oilseed estimate also includes peanuts (approximately 50.4 million tonnes) and cottonseed (approximately 41.4 million tonnes), among other oilseeds.

The adequacy of global supply with soy protein is limited by the availability of cropland. China alone imported more than 100 million tonnes in 2022, which was one fourth of the global harvest  and translates to a virtual area import of approximately 29 to 30 million hectares. In the same period, Germany imported approximately 3.4 million tonnes, mainly from the US. The increase in soybean production and the associated rise in forest clearings, especially in Brazil, led the EU to the introduce the EU regulation on deforestation-free products. The Union zur Förderung von Oel- und Proteinpflanzen e.V. (UFOP) has welcomed this regulation as a further step towards improving requirements relating to biotope conservation and climate protection. The UFOP has emphasised that the new regulation should, however, not lead to shift effects to other regions, such as the Cerrado, a region vital for biodiversity and climate change mitigation.

According to the UFOP, proof of deforestation-free sourcing was already introduced in the Renewable Energy Directive (2009/28/EC – Red I) in 2009, based on the status land had in 2008. The association regrets that these documentation obligations for biofuels were not used at the time to define limits on arable farming in tropical rain forests irrespective of final uses. After all, it is not the production of soybean oil for biofuel production that is driving the expansion in area, but the 80 per cent share of soybean meal which is the decisive factor for pricing. From this perspective, if the EU Commission were to classify soybean oil, like palm oil, as an iLUC feedstock, cause and effect of the iLUC impact (iLUC = indirect land use changes) would be negligently ignored. The UFOP has emphasised this as the review by the EU Commission is currently underway. 

The regulation on deforestation-free supply chains, which came into force on 30 June 2023, has a transition period of 18 months. This means that the farms in question are required to implement the regulation a year from now – from 30 December 2024 onwards. Small farms are allowed a transition period of 24 months. The UFOP has reminded that the required proof of crop area origin also applies to soybean production in the EU.

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Chart of the week (50 2023)

Oilseed production area in Ukraine: more soybeans, less rapeseed expected

 

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Ukraine is a major producer of oilseeds and an important supplier to the EU. The war has presented Ukrainian farmers with some huge challenges, with a multitude of factors having already impacted the sowings of winter rapeseed in the autumn. Recent forecasts anticipate a stable sunflower area. On the other hand, the soybean acreage is expected to expand.

The situation of agriculture in Ukraine continues to be difficult. Due to the war, supply of seed, fertilizers, crop protection products and fuels is inadequate and costly. Also, there is a shortage of workers to operate agricultural machinery. At the same time, producer prices for cereals and oilseeds have fallen significantly due to higher freight charges. Moreover, some neighbouring countries have closed their borders for agricultural products. Countless smaller and medium-sized farms have given up business because of the poor financial situation. Some of the land was bought up is not yet back under cultivation. This complicates the production area forecast for oilseeds, legumes and cereals significantly.

Latest estimates by the Ukrainian authorities and the USDA project a decline in rapeseed area on the previous year. Producer prices are clearly below the previous year's level, with expectations of an increase being low. What is more, lack of rain hampered sowings. However, investigations conducted by Agrarmarkt Informations-Gesellschaft (mbH) suggest a brighter outlook for sunflower and soybean production. The profitability of these crops is expected to be higher than that of rapeseed. The reason is lower input costs, especially in the case of the legume soybean, and better income possibilities. The expected steady demand for sunflower oil suggests that the production area will remain stable. How much rapeseed, sunflowers and soybeans and their respective processed products will then go into exports depends on numerous factors, above all the big uncertainty in transport costs, which means that there is currently no way to estimate these quantities with any certainty.  

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Chart of the week (49 2023)

Larger sunflower seed harvest in the EU

 

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In the EU-27, the 2023 harvest of sunflower seed came in considerably larger than the previous year. It also exceeded the long-term average.

According to EU Commission estimates, EU sunflower seed production in 2023 amounted to just less than 10 million tonnes. This was just over 7 per cent more than in 2022,  but clearly below the 10.4 million tonne bumper harvest recorded in 2017. Although the area planted was reduced around 2.7 percent to 4.8 million hectares, yields were nearly 10 per cent higher than those recorded in 2022, reaching 20.7 decitonnes per hectare. Whereas dry spells and extreme heat had diminished the yield potential significantly the previous year, crop development in 2023 benefited from mild temperatures and rainfall in some regions. Romania remained by far the most important sunflower-producing region in the EU-27, the sunflower area hitting a new record at 1.2 million hectares. However, despite the significant expansion in area, yields fell around 12 per cent short of the previous year's level, resulting in a marginally smaller Romanian harvest of 2.1 million tonnes compared to 2022.

The German sunflower area declined somewhat in 2023, while still being well above the level before the start of Russia's attack on Ukraine. The Union zur Förderung von Oel- und Proteinpflanzen e. V. (UFOP) regards sunflowers as a regional crop alternative in order to expand crop rotations and minimise risks. The UFOP therefore recommends that farmers take sunflowers into account when planning their crop areas for the 2024 sowings. The annual variety trials that are funded by the UFOP and conducted in cooperation with the responsible regional authorities confirm the high yield potential of both conventional and high-oleic varieties, also in terms of oil content. The latest results are available for download from the UFOP website at https://www.ufop.de/medien/downloads/agrar-info/ufop-schriften/  (in German only).

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Chart of the week (48 2023)

Soy with higher-than-average yields

 

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Although the German soybean area 2023 was smaller than the previous year, the harvest is seen to clearly exceed the previous year's figure. 

According to information published by Agrarmarkt Informations-Gesellschaft (mbH), soybean farming did not play an appreciable role in Germany until 2015. Since then, the area has grown continually and significantly. However, in 2023 it was reduced 6,700 hectares to 44,800 hectares. 

According to preliminary information by the German Federal Statistical Office, 122,100 tonnes of soybeans were probably harvested from this area, around 1,600 tonnes more than a year earlier. The increase is mainly based on growth in yield. At 27.3 decitonnes per hectare, the previous year's average yield was exceeded by 3.9 decitonnes per hectare. As a result, the decline in area was more than offset. Bavaria and Baden-Wuerttemberg remained the most important production regions.

The Union zur Förderung von Oel- und Proteinpflanzen e. V. (UFOP) has used the 2023 decline in soy production area as an opportunity to highlight the continued need for consultation on, and promotion of, crops like leguminous plants. The UFOP believes that there is still room for refining the German Ministry of Agriculture's arable farming strategy in a holistic manner. The association has emphasised that arable farmers are basically strongly interested in diversifying crop rotations to enhance resilience against climate change.

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Chart of the week (47 2023)

More soybeans from the US

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Soybean is the most important oilseed crop imported into the European Union, ahead of rapeseed. EU-27 soy imports in the first four and a half months of the running marketing year amounted to just less than 4.0 million tonnes. This was up around 75,000 tonnes on the same period in the 2022/23 season. 

Brazil and the US remained the top suppliers with almost identical shares. By mid-November, the EU had imported just less than 1.8 million tonnes of soybeans from the US, around 0.3 million tonnes more than in the year-earlier period. In other words, the US increased their share of total EU soy imports 6 percentage points to 44 per cent. On the other hand, volumes from Brazil nearly remained at the previous year's level at just under 1.7 million tonnes. By contrast, imports from Canada and Ukraine saw a significant decline.

Soybean meal is another important oilseed commodity imported by the EU. According to investigations conducted by Agrarmarkt Informations-Gesellschaft (mbH), import volumes fell marginally short of the previous year’s level.

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Chart of the week (46 2023)

More rapeseed from Russia and the EU-27

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In its latest report, the US Department of Agriculture (USDA) slightly raised its forecast of global rapeseed production and consumption. Ending stocks were also revised up.

The USDA estimates global rapeseed production for the 2023/24 crop year at around 85.6 million tonnes, up 0.5 million tonnes from the October outlook. This translates to an expected 3.6 per cent decline on the previous year's bumper crop. The main reason for the upward revision is an adjustment of the Russian harvest which was raised 0,5 million tonnes to 4 million tonnes. Nevertheless, the harvest will likely fall 0,3 million tonnes short of the previous year's level. The USDA estimates the harvest in the EU-27 at 20.1 million tonnes, around 0.1 million tonnes larger year-on-year.

The USDA also raised its forecast of global rapeseed consumption in 2023/24 from October by 0.5 million tonnes to 85.7 million tonnes. This would be up as much as 0.5 million tonnes on the previous marketing season. Investigations conducted by Agrarmarkt Informations-Gesellschaft (mbH) suggest that the increase in harvest will likely boost consumption, especially in Russia.

Since the forecast of global rapeseed production was raised slightly more than that of global consumption, 2023/24 ending stocks are seen to slightly exceed previous expectations. More specifically, the USDA currently estimates supplies at 6.5 million tonnes, 0.3 million tonnes larger than anticipated in October. Ending stocks would nevertheless fall well short of the volume of 7.8 million tonnes recorded the previous year.

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Chart of the week (45 2023)

FAO vegetable oil price index continued downslide

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Trends in global vegetable oil prices were mixed in October. Whereas palm oil was offered at much lower prices, soybean, rapeseed and sunflowerseed oil saw a slight rise.  

The October FAO vegetable oil price index averaged 120.0 points. This was down only 0.7 per cent on the previous month but translates to an around 20.7 per cent decline on the past year. Above all, the marginal decline over the previous month reflected the lower bids for palm oil which more than offset the higher asking prices for soybean, sunflower and rapeseed oil. In other words, palm oil prices continued their downward slide in October, which was mainly due to the seasonal production increase in leading palm oil-producing countries and continued dampened global demand. In contrast, soybean oil prices rose after having declined for two months running.

According to investigations conducted by Agrarmarkt Informations-Gesellschaft (mbH), support came from healthy demand from the biodiesel sector in the US and South America. In contrast, October demand for rapeseed oil from biofuel producers was comparatively low in the European Union. The anticipated impact of the seasonal production of winter biodiesel on demand and prices did not materialize. Orders were only placed for smaller volumes to cover nearby demand. According to the AMI, the mineral oil companies had already earlier stocked up on the volumes required for blending in the fourth quarter.

The FAO cereal price index averaged 125.0 points in October 2023. This was down 1.0 point on the previous month and as much as 18 per cent on a year earlier. At the same time, all of the main cereal crops saw a decline in prices.

 

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EU rapeseed imports declined

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August 2023 use of biodiesel/HVO increased substantially month-on-month. At 233,000 tonnes, the amount of biodiesel blended in diesel fuel was not just around 2.5 per cent larger in August 2023 than the previous month, but also the biggest volume since March 2023. According to preliminary information published by the Federal Office for Economic Affairs and Export Control (BAFA), a total of 1.733 million tonnes of biodiesel and hydrotreated vegetable oil (HVO) was blended in diesel fuel in the period January to August 2023. Based on previous months' figures, the Union zur Förderung von Oel- und Proteinpflanzen e. V. (UFOP) has estimated total consumption in 2023 at approximately 2.552 million tonnes. The association has pointed out that raising the greenhouse gas quota obligation from 7 per cent to 8 per cent on the previous year has helped stabilize demand for biodiesel, although at the expense of the German biodiesel commodity chain. The UFOP has drawn attention to biodiesel imports from China, which imports continue to be under suspicion of fraud.

The association fears that the pressure on supply and prices for rapeseed oil-based biodiesel will continue in 2024 due to the leverage of double counting, although the GHG quota obligation will increase to 9.25 per cent. This effect also compensates the fact that palm oil-based biodiesel or HVO can no longer be credited since the beginning of 2023. Due to triple counting, other compliance options such as e-mobility in the private, commercial and municipal sectors, which is subsidized with substantial amounts of tax money, significantly enhance the displacement effect and thus the plunge in prices in GHG quota trading.

The UFOP has urged the German government to review GHG quota levels for the coming years and raise them reasonably at an earlier stage by virtue of the power to issue statutory instruments provided for in section 37(h) of the Federal Control of Pollution Act (BImSchG). According to the association, trading in greenhouse gas reduction quotas has become a major market-based incentive for all players to drive the energy transition in the vehicle tanks of the existing fleets or switch to electric drives. The UFOP has emphasised that the increases to 9.25 per cent scheduled for 2024 and higher in the following years as provided for in the law will not be high enough to meet the climate mitigation targets in the transport sector set for 2030.

Referring to the more than 3 million tonne share of biodiesel in the diesel market that was reached without quota trading in 2020, the UFOP has emphasised that the share of biodiesel in diesel fuel should be raised from 7 to 10 per cent by volume at public petrol stations as soon as possible in accordance with the amended regulation on fuel quality (10th Ordinance on the Implementation of the Federal Control of Pollution Act). According to the UFOP, this would be the fastest possible and also most cost effective contribution towards meeting greenhouse gas quota obligations. In this context, the UFOP has called attention to the fact that German biodiesel producers and traders exported approximately 823,000 tons of biodiesel in the first half of 2023 alone. The share of HVO has remained comparatively low and is still not recorded separately by the Federal Office for Economic Affairs and Export Control (BAFA). 

The UFOP has underlined that what applies to all biofuel options is that proof of sustainability is the passport to market access, crediting and product confidence.

 

 

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EU rapeseed imports declined

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In the first quarter of the running crop year rapeseed imports to the EU were lower than a year earlier. The end of the grain export agreement and the import ban EU neighbouring countries imposed on imports of Ukrainian goods are obviously making an impact.

Since the beginning of the crop year, rapeseed imports to EU-27 states have amounted to 1.23 million tonnes, which was down just less than 38 per cent on the same period last year. Ukraine remains the most important country of origin, with exports amounting to 683,000 tones (1 July to 15 October) and a 55 per cent share in imports. According to Agrarmarkt Informations-Gesellschaft mbH (AMI), EU imports are set to fall well short of last year's level of 1.3 million tonnes in total. This is due to Russia's withdrawal from the grain export agreement in mid-July 2023. Since then, Ukrainian goods have to be exported via alternative routes such as road, rail or the Danube river. Consequently, freight charges have risen significantly. The alternative routes are being expanded continuously, and Brussels supports speedy completion. But at the same time, the import ban imposed by some EU countries prevents more extensive deliveries.

The second most important supplier of rapeseed in the above-mentioned period was Australia, after Ukraine. Supply typically dwindles seasonally, but during the above-mentioned period imports actually dropped by more than half to 283,000 tonnes. In other words, Australia covered 23 per cent of EU rapeseed imports. Moldova took third place, delivering 181,716 tonnes. The country quadrupled its shipments on the previous year's period. Most of the rapeseed probably came from Ukraine, since Moldova's own rapeseed harvest in 2023 was only 65,000 tonnes. This allowed Ukraine to circumvent the EU neighbouring countries' ban on imports.

 

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Argentine soybean stocks are running low

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After the disastrous 2023 soybean harvest, the processing industry in Argentina is short of feedstock to maintain production.

The small 2023 crop presents the processing industry in Argentina with some major challenges. Low domestic feedstock supplies have led to significantly lower utilization levels at oil mills. Oil mills are currently only utilizing two thirds of their available capacity. Utilization levels could decline further if domestic soybean supplies continue to dwindle. The first new-crop batches will not be available to the industry until May 2024.

In the months January to August 2023, soybean processing dropped 27 per cent compared to the same period the previous year to 19.6 tonnes, a level not seen since 2015. The oil mills depended on imports to fulfil their delivery obligations. More specifically, in the period January to August 2023 soy imports amounted to around 8.2 tonnes, the highest quantity ever over this period. Total soybean imports in the calendar year 2023 could reach 10 million tonnes.

According to Buenos Aires Cereal Exchange (BDBA) estimates, after the disastrous soybean harvest in 2023, production will probably revert to old levels in the coming season. BCBA analysts project the 2024 harvest, which will commence in March next year, at around 50 million tonnes. This would be clearly up on the around 21 million tonnes of soybeans that were brought in from the fields in 2023. The US Department of Agriculture (USDA) is somewhat more cautious in its expectations, anticipating the next harvest to yield 48 million tonnes.

 

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More sunflower seed from Ukraine

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According to recent information published by the International Grains Council (IGC), global production of sunflower seed will probably amount to 56.1 million tonnes in 2023/24. In other words, the IGC lowered its previous month's forecast by 300,000 tonnes. The previous year's output is seen to be exceeded by only 2.6 per cent.

The downward adjustment is mainly due to a prospective smaller crop in the EU-27. The sunflower seed harvest in the Union, the world's third most important supplier, is expected to reach around 10.3 million tonnes, which is 100,000 tonnes less than projected in August. Nevertheless, the previous year's figure will presumably be exceeded by 12.4 per cent.

The harvest area in Ukraine is seen to have been expanded significantly for 2023. Due to favourable growing conditions, yields are expected to increase on 2022. The IGC projects production to reach 15.3 million tonnes. This translates to an 8.9 per cent rise on the past year. Especially the sunflower acreage in the currently "uncontrolled areas" account for a significant share in the overall output. In Russia, where harvesting commenced at the end of September 2023, output of sunflower seed is expected to remain at the previous year's level of 16.4 million tonnes. In other words, the previous month's forecast remained unchanged.

 

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Foreign trade with biodiesel on the increase

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In the past six years, both German imports and exports of biodiesel increased steadily. The Netherlands was by far the most important trading partner, followed by Belgium and Poland.

German exports of biodiesel grew steadily in the past years with the exception of 2021. More specifically, exports rose from 1.61 million tonnes in 2017 to 2.72 million tonnes in 2022. This translates to an increase of around 69 per cent. The Netherlands remained the largest country of destination throughout the entire period. Exports to this neighbouring country almost doubled between 2017 and 2022. Whereas in 2017 exports were at 583,289 tonnes, they amounted to just less than 1.2 million tonnes in the past calendar year. Belgium ranked second most important importer in the previous years, but with a much lower share. The country's exports also multiplied. Poland and Sweden followed in third and fourth place respectively. 

On the other hand, German biodiesel imports also rose steadily with the exception of the year 2021. More specifically, imports doubled between 2017 and 2022 to around 1.54 million tonnes. Again, the Netherlands was the biggest trading partner with the Rotterdam port being Europe's primary hub for supplies. Germany received around 782,896 tonnes of biodiesel from the Netherlands in 2022. This compares to 300,959 tonnes in 2017. Belgium and Poland followed as second and third biggest suppliers of biodiesel to Germany.

The Union zur Förderung von Oel- und Proteinpflanzen e. V. (UFOP) considers global per capita supply of vegetable oils for the human diet, including processed products, to be sufficient. The association has predicted that – with fuel consumption tending to decline in the wake of increasing electrification of road traffic – the introduction of the cap on biofuels from cultivated biomass in the EU will not cause demand in the EU to rise further. In fact, global demand for the energy-related uses is defined outside the EU.

The UFOP has drawn attention to the Global Biofuel Alliance, which was recently founded on the initiative of the Indian government by the heads of government of the US, Brazil, Argentina and the United Arabian Emirates, among other countries, on the edges of the G 20 summit. The UFOP regrets that Italy is the only EU member of this Alliance, not Germany or the EU Commission. The association holds that the EU is indeed the global leader in legal requirements for proof of sustainability and certification obligations. However, the UFOP expects that future global sustainability requirements in trade in goods will be defined by the Alliance.

 

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2023/24 vegetable oil production to hit record levels

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According to USDA estimates, global production of vegetable oils is set to grow for the third consecutive year and reach new record highs.

The US Department of Agriculture (USDA) estimates that global output of vegetable oils will reach 222.8 million tonnes in 2023/24. This would be a 6.5 million tonne rise compared to 2022/23. In other words, production will probably cover the estimated demand of 217.5 million tonnes more than adequately. This means that global ending stocks of vegetable oils will increase approximately 0.1 million tonnes to 30.6 million tonnes.

Palm oil remains the most important vegetable oil on the world market. According to investigations conducted by Agrarmarkt Informations-Gesellschaft (mbH), global palm oil production will likely grow for the third consecutive year, reaching 79.5 million tonnes. This translates to a 1.9 million tonne increase over 2022/23. In other words, palm oil accounts for 35.7 per cent of total global vegetable oil production. Indonesia remains the largest producer with an output of 47 million tonnes, followed by Malaysia with 19 million tonnes and Thailand with just less than 3.5 million tonnes.

Production of soybean oil is expected to grow 2.9 per cent to 61.6 million tonnes in the coming crop year and could hit a new record. China remains the primary producer with production amounting to 17.2 million tonnes – based, however, on large soybean imports. The US ranks second with 12.2 million tonnes.

Production of sunflower oil is also projected to grow, based on larger availability due to expansions in area planted. Global output is seen to reach 21.7 million tonnes, 0.6 million tonnes more than in 2022/23. Russia alone is expected to contribute 6.6 million tonnes, around 0.3 million tonnes more. Production in the EU and Ukraine is also anticipated to increase, whereas Argentina, Turkey and the US are forecast to see a decline. Rapeseed oil is set to exceed the previous year's volume by an estimated 400,000 tonnes in 2023/24, reaching 33 million tonnes.

The Union zur Förderung von Oel- und Proteinpflanzen e. V. (UFOP) considers global per capita supply of vegetable oils for the human diet, including processed products, to be sufficient. The association has predicted that – with fuel consumption tending to decline in the wake of increasing electrification of road traffic – the introduction of the cap on biofuels from cultivated biomass in the EU will not cause demand in the EU to rise further. In fact, global demand for the energy-related uses is defined outside the EU. 

The UFOP has drawn attention to the Global Biofuel Alliance, which was recently founded on the initiative of the Indian government by the heads of government of the US, Brazil, Argentina and the United Arabian Emirates, among other countries, on the edges of the G 20 summit. The UFOP regrets that Italy is the only EU member of this Alliance, not Germany or the EU Commission. The association holds that the EU is indeed the global leader in legal requirements for proof of sustainability and certification obligations. However, the UFOP expects that future global sustainability requirements in trade in goods will be defined by the Alliance.

 

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Germany a major rapeseed oil supplier to the EU

GDW_3823_EN_2048.jpgGerman shipments of rapeseed oil increased again in the 2022/23 crop year, following a significant decline a year earlier.

At just less than 1.3 million tonnes, Germany exported just over 19 per cent more rapeseed oil in 2022/23 than in the previous season. Nevertheless, exports fell 6 per cent short of the volume reached in the 2020/21 marketing year.

The Netherlands remained the largest recipient country of German rapeseed oil in 2022/23. The country took just over 710,400 tonnes which where, however, destined for onward export to destinations worldwide. In the previous season, exports to the Netherlands were just about 19 % lower. Belgium ranked second, taking 110,800 tonnes. The country received around 28 per cent more than in 2021/22. It was followed by Denmark, France and Norway as major destinations. France purchased around 58,400 tonnes (-10 per cent), remaining an important market. Denmark received around 72,100 tonnes (+12 per cent). Shipments to Norway showed the biggest increase. They nearly doubled over the previous year's volume to 53,600 tonnes. China, Sweden, the UK, Finland and Brazil also received significantly more than in 2021/22, whereas deliveries to Poland, the Czech Republic and Switzerland declined.

The development exports have taken underlines the importance Germany has for the supply of rapeseed oil and, at the same time, the high-protein animal feed rapeseed meal to the European Union. The UFOP expects the importance of European rapeseed production for climate change mitigation – and consequently that of rapeseed oil as an iLUC free feedstock – to become more visible as the EU database will be introduced towards the end of the year, as announced by the EU Commission. Similar to Nabisy, the database system of the German Federal Office for Agriculture and Food (BLE), the EU database will record the sustainability certificates for volumes of biodiesel and HVO that can be counted towards quota obligations. 

 

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EU legume harvest higher than average

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UFOP: calls for attractive funding options for domestic production and marketing

EU output of legumes from the 2023 crop is expected to exceed the previous year's figure by 5 per cent and also the average of the past five years. Field peas and soybeans are seen to show the biggest increase.

The EU Commission has estimated the EU legume harvest at a full 6.3 million tonnes in 2023. This would be up 5 per cent year-on-year, but remain far short of the 6.9 million tonne record harvest in 2017. Above all, the harvest of field peas is set to grow 11 per cent compared to the previous year to 2.1 million tonnes. According to Agrarmarkt Informations-Gesellschaft (mbH), the increase is due to both the expansion in area planted and a presumed growth in yields.

The most important legume crop in the EU-27 remains soybean, which accounts for a slightly larger share of 44 per cent of the legume crop. Producers are expected to harvest around 2.3 million tonnes in 2023, 14 per cent more than the previous year, despite a 99,000 hectare year-on-year reduction in area planted.  On the other hand, the EU field bean crop is set to remain below the previous year's output of 1.3 million tones, at 1.2 million tonnes. The biggest decline is expected for sweet lupins. At 332,000 tonnes, the harvest is seen to fall around 26 per cent short of the previous year's level, mainly due to an expected drop in yields.

The Union zur Förderung von Oel- und Proteinpflanzen (UFOP) has emphasised that the production area and output of grain legumes are basically on an upward trend. This growth in legume crops underlines farmers' interest in opening up new markets and making crop rotation systems more resilient and less risky by growing legumes.

In view of the ongoing negotiations on the budget of the German Federal Ministry of Agriculture in the German Bundestag, the UFOP has urged that the accompanying and incentive measures relating to the protein plant strategy (EPS) be made sufficiently attractive in order to support this development. According to the association, the toolbox is in place and all that is needed is a forward-looking bold approach. With regard to the common agricultural policy (CAP), the UFOP has renewed its call for an adequate premium scheme in the first and second pillar of grain legume production in varied crop rotation systems. Together with proper protein plant strategy funding, these steps would create essential overall conditions for a future arable farming strategy that deserves the name and is also appreciated by consumers.

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German biodiesel exports at a high level

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UFOP: exports take pressure off rapeseed market

Foreign trade in biodiesel is poised to be brisk in 2023. German exports in the first six months rose 16 per cent on the year-earlier period. Imports declined 11 per cent. The export surplus amounted to approximately 0.81 million tonnes. From the perspective of the Union zur Förderung von Oel- und Proteinpflanzen e. V. (UFOP), exports are an extremely important outlet that takes pressure off the rapeseed oil market. They are therefore highly significant for oil mills' capacity utilization. The UFOP assumes the main imports to be biodiesel and HVO from waste oils which HVO is accounted for the in the statistics, but not shown separately. This forecast is confirmed by the Evaluation and Progress Report that is published annually by the German Federal Office for Agriculture and Food (BLE).

According to figures published by the German Federal Statistical Office, Germany exported around 1.5 million tonnes of biodiesel in the first half year of 2023. On the other hand, imports amounted to 686,117 tonnes. The Netherlands continued to be the primary trading partner, accounting for 46 per cent and 58 per cent of total exports and imports respectively. Rotterdam is the largest EU port for biodiesel imports and also the EU's largest location for HVO production. The import volume increased for the second consecutive year. According to investigations conducted by Agrarmarkt Informations-Gesellschaft (mbH), larger shipments also came from Malaysia, Austria and Finland, whereas imports from Belgium and Poland fell short of the previous year's volumes.

The main recipient countries of German biodiesel also were EU countries (76 per cent), headed by the Netherlands, Belgium, Poland, Sweden and France. The most important non-EU country was the USA. The country even moved up to second place in the first half of 2023 because imports more than doubled year-on-year to just under 242,000 tonnes.

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Brisk rapeseed imports despite large harvest

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In the crop year 2022/23, Germany imported around 5.74 million tonnes of rapeseed. This was 2 per cent more than in the previous marketing season, although the 2022 rapeseed harvest was more abundant than a year earlier.

Australia remained the number one supplier country, delivering 1.4 million tonnes. A year earlier, Germany had received around 12,000 tonnes more. At 3.4 million tonnes, the majority of imports came from EU countries, according to investigations conducted by Agrarmarkt Informations-Gesellschaft (mbH). This figure is however misleading, because according to official statistics, Belgium delivered about 323,000 tonnes to German oil mills and traders despite a national harvest of only 32,000 tonnes. As in previous years, the largest share of these shipments was probably Ukrainian commodity since Ghent is a delivery location for contract commodity at the Paris stock exchange. From there, the deliveries are directly transported on to the Rhine River. Unlike in previous marketing years, imports from the Netherlands did not play any significant role in 2022/23.

France supplied around 1.1 million tonnes of rapeseed to Germany, which was up around 388,000 tonnes on the previous year. This tonnage was probably actually produced in France. In the case of rapeseed imported from Poland, the Baltic countries, Bulgaria and Romania, the origins are not always evident from the foreign trade figures. Poland had a large rapeseed harvest in 2022 indeed, but this is probably not the reason why the country's shipments to Germany rose 230,000 tonnes to just less than 540,000 tonnes. Instead, most of this was likely rapeseed from Ukraine. The same applies to the Baltic rim. For example, Sweden delivered five times the amount in 2022/23 and Denmark one-and-a-half times the amount. Larger volumes also came from the EU's eastern border, more specifically Slovakia. The country's deliveries to Germany more than doubled. About 705,000 tonnes came from Ukraine itself, which translates to an increase of about 90,000 tonnes.

As a consequence of the brisk import activities for rapeseed from Ukraine, analogue effects on import volumes are expected to occur in the 2023/24 marketing year, especially because the German 2023 rapeseed harvest was smaller than in the previous year.

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Soybean supply set to hit record high

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According to recent information published by the US Department of Agriculture (USDA), global soybean production in the running season is likely to amount to round 403 million tonnes, with Brazil, Argentina and the US accounting for 81 per cent of that figure.

Around 402.8 million tonnes of soybeans are expected to be produced worldwide in 2023/24. In other words, the USDA lowered its July forecast by 2.5 million tonnes. Nevertheless, this translates to a big increase of almost 33 million tonnes on the previous marketing year. Above all, the harvest outlook for the US was revised downward. The US soybean crop is now seen at only 114.5 million tonnes, 2.6 million tonnes less than previously expected. This figure would fall just under 117 million tonnes short of the previous year's level.

The USDA put global consumption at just less than 384 million tonnes, slightly down on the previous month's forecast, but nevertheless up 20.7 million tonnes on the tonnage consumed in 2022/23. On the other hand, there were no adjustments for the world's largest consumers China (118 million tonnes), the US (66 million tonnes), Brazil (60 million tonnes) and Argentina (43 million tonnes).

Global soybean ending stocks are seen to hit a record high in 2023/24, although the forecast was lowered 1.6 million tonnes to 119.4 million tonnes based on adjustments in production figures. According to investigations conducted by Agrarmarkt Informations-Gesellschaft (mbH), supplies in the US, but also in the EU and Brazil are expected to drop from the previous month. However, there would still be a significant 16.3 million tonne increase compared to 2022/23.

 

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Ukrainian 2022/23 oilseed exports up on previous year - EU was primary trading partner

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Exports of oilseeds grown in Ukraine increased despite the war that has been going on since February 2022 and the associated restrictions.

Ukraine maintained its global position as main producer of sunflower seed in the 2022/23 season. Although the 12.2 million tonne harvest was 5.3 million tonnes smaller than that of the previous season, Ukraine remained the world's second most important producer after Russia and ahead of the EU. At the same time, the share of commodity exports increased considerably in the year-on-year comparison. Between September 2022 and May 2023, most exports were destined for the EU (79 per cent), because access to the world market was limited due to the fragile grain deal. Despite the challenging conditions, around 2 million tonnes of sunflower seed were still exported, slightly more than in the previous season.

The Ukrainian APK-Inform analytical agency has estimated that soybean exports in 2022/23 amounted to around 3 million tonnes, which compares to 1.4 million tonnes the previous marketing year. Above all, exports to the EU and Turkey multiplied.

Ukrainian rapeseed exports in the 2022/23 marketing year are seen to have reached 3.4 to 3.6 million tonnes. This would be both a significant increase on the previous year's level of 2.7 million tonnes and a record volume. The most important destination was the EU, receiving just less than 3 million tonnes, with rapeseed imports from Ukraine accounting for just under 41 per cent of total imports. APK-Inform has ambitiously projected exports for the coming marketing year 2023/24 at the level of the past marketing year, although implications of the war, especially the impact of Russian attacks on storage and loading facilities, can hardly be predicted at present.


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Consumption of biodiesel and bioethanol fluctuated moderately

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In the first four months of 2023, consumption of B7 diesel fuel amounted to just over 9.6 million tonnes, which was down just under 7 per cent on the previous year's volume. Above all, March 2023 outstripped the previous sales quantities in the calendar year. April 2023 biodiesel consumption declined just less than 5 per cent to 209,300 tonnes on the same month the previous year.

 

At around 831,000 tonnes, the quarterly consumption of biodiesel was just over 2 per cent below the previous year's figure. Since diesel consumption in the first four months declined more sharply than over the same period a year earlier, the volumetric incorporation rate rose from 7.5 per the previous year to 7.9 per cent, according to investigations conducted by Agrarmarkt Informations-Gesellschaft (mbH).

April 2023 use of bioethanol including ETBE remained just below the 100,000 tonne mark. Bioethanol and ETBE recorded a rise of 13 per cent and 5 per cent, respectively, on the previous month. Nevertheless, the monthly total of 99,400 tonnes showed a decline of just over 12 per cent on the same month the previous year. At the same time, petrol consumption increased 4 per cent to 1.3 million tonnes on April 2022.

As a result of this, the percentage of biodiesel contained in blends dropped to 7.1 (previous year: 8.2) per cent in April 2023. Since both more fossil fuel and more biofuel was consumed in the first four months, total consumption reached just over 5.5 million tonnes. This translates to a 4 per cent rise year-on-year. Statistics of several years are available on https://www.ufop.de/biodiesel-und-co/biodiesel-preis/ (in German only).


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German rapeseed meal exports on the decline

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UFOP: biodiesel production chain supports protein strategy

German rapeseed meal exports fell short of the previous year's volume. Main buyers, such as Denmark, Spain and France, imported considerably less, whereas the Netherlands, Sweden and Switzerland ordered more.

Germany exported a total of just over 1.5 million tonnes of rapeseed meal from July 2022 to May 2023. This was down about 4 per cent on the same period a year earlier. According to Agrarmarkt Informations-Gesellschaft (mbH), this was the smallest quantity imported in four years. German rapeseed meal is mainly delivered to EU member states. They received round 1.3 million tonnes in the period stated. The largest share, 685,000 tonnes, went to the Netherlands. This means that the volume decreased just over 5 per cent on the same period a year earlier. Denmark, the second largest trading partner in the rapeseed meal business, also reduced its imports from Germany 5 per cent, to 182,000 tonnes. Deliveries to France dropped more than one third, whereas those to Spain plummeted as much as 52 per cent. Due to larger domestic rapeseed harvests, both countries had less demand for meal deliveries from abroad.

On the other hand, according to information published by the German Federal Statistical Office, deliveries to Sweden showed an increase of almost one third. Switzerland was once more the most important recipient outside the European Community, boosting its imports just less than 12 per cent to a record of 78,000 tonnes.

The Union zur Förderung von Oel- und Proteinpflanzen e. V. (UFOP) has highlighted the amounts of rapeseed meal generated in the processing chain of rapeseed oil-based biodiesel. The association holds that rapeseed meal is by far the most important source of protein for animal feed, but in future potentially also the human diet. The UFOP has emphasised that the importance of this sector for value creation and climate change mitigation can be deduced from Germany's rapeseed processing capacity of more than 9 million tonnes and biodiesel production capacity of more than 4 million tonnes.

The UFOP has therefore expressly welcomed the decision taken by the Conference of the German Ministers of Economics held on 21/22 June 2023, unanimously calling on the German government not to pursue the planned annual reduction of the cap on biofuels from cultivated biomass. The UFOP has pointed out that the war has once again revealed the dependence of Germany as an industrial location on imports of fossil energy sources. The suitability of rapeseed oil for a large variety of uses in human nutrition, for energy-related uses and, in the future, possibly increased material use in an integrated bioeconomy is a prerequisite to secure supply of protein from German or European production.


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Canada set to be the world's largest producer of rapeseed in 2023/24

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The EU-27 is likely to harvest less rapeseed due to the drought-stricken spring, sliding down to second biggest producer of rapeseed in the world behind Canada.

According to data from the USDA, the global rapeseed harvest in the 2023/24 crop year is set to amount to around 87.4 million tonnes. In other words, the previous month's forecast was raised marginally around 200,000 tonnes. However, in the previous season the harvest came in 900,000 tonnes larger at 88.3 million tonnes. The USDA's upward revision is based on an expected 800,000 tonne harvest increase to 4 million tonnes in Ukraine. By contrast, rapeseed output in the EU-27 is seen to be lower than forecast in June. According to investigations conducted by Agrarmarkt Informations-Gesellschaft (mbH), the USDA left its outlook for the other globally important producers unchanged relative to June.

The USDA sees global consumption in the 2023/24 season at around 85.7 million tonnes, which is up 0.5 million tonnes from the previous month's estimate and up 0.4 million tonnes on the previous year.

Stocks as at end of the crop year that recently started are expected to amount to 6.4 million tonnes. In other words, the USDA expects ending stocks at a level around 500,000 tonnes lower than it did in June. However, there would still be a 200,000 tonne increase on the previous year. The reduction from the previous month is mainly based on the projected drop in EU-27 ending stocks, which are estimated at around 1.4 million tonnes, down 500,000 tonnes from the June forecast. The forecast of China's ending stocks was also lowered 100,000 tonnes to 1.6 million tonnes.


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Chart of the week (29 2023)

EU-27 imported less palm oil

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EU member states imported significantly less palm oil in the marketing year 2022/23 than the previous year. The decline in imports was especially strong in the Netherlands, Italy and Belgium.

In the period from July 2022 through the end of June 2023, the EU-27 imported just under 4 million tonnes of palm oil. This was around 934,000 tonnes or 19 per cent less than the year before. The main importing country in the EU was Spain, receiving 1.2 million tonnes, which was up around 4 per cent on the 2021/22 marketing season. It was followed by the Netherlands as second most important importer with 1.2 million tonnes. However, the country's imports were just less than 19 per cent short of the previous year's volume of 1.4 million tonnes. With regard to Dutch imports, it should be noted that ports such as Rotterdam or Amsterdam are central destinations for overseas imports and serve as ports of entry into the EU from where palm oil is shipped on to other EU member states. Also, the Netherlands is an important European location for the production of biofuels.

According to investigations conducted by Agrarmarkt Informations-Gesellschaft (mbH), the decline in palm oil imports to Italy was more pronounced. At 803,000 tonnes, the country's imports were around 38 per cent smaller than in the 2021/22 reference period. The slump in Belgian palm oil imports was even sharper, with imports falling 42 per cent to 100,000 tonnes. By contrast, Germany imported significantly more palm oil from abroad. At 359,000 tonnes, imports were up just less than one fourth in 2022/23 compared to the previous crop year. 

The Union zur Förderung von Oel- und Proteinpflanzen (UFOP) has welcomed the general decrease in palm oil imports. The association attributes this trend mainly to the decline in using palm oil as a feedstock in biodiesel fuel and hydrotreated vegetable oil (HVO) production. However, it is critical of the fact that in the same period imports of questionable biofuels from China to the EU saw a massive increase. Such biofuels were declared to be so-called advanced biofuels, but there were strong doubts about the correctness of the certifications and required proofs of raw material origin.

EU member states are all required to phase out the crediting of biofuels from palm oil towards national blending mandates or greenhouse gas reduction quotas no later than 2030. In Germany, such crediting has already been disallowed since January 2023; imports for the purpose of processing for export are still possible. Alongside Germany, there are other member states that have also already excluded crediting of palm oil-based biofuels, including France, Italy, Austria, Belgium and Sweden.

The UFOP expects that in the future the domestic "oil source" rapeseed oil will gain importance as an "iLUC free" feedstock alternative, because rapeseed is grown in crop rotations in traditional agricultural regions. According to the outcome of the trialogue negotiations to amend the Renewable Energy Directive (Red III), the EU Commission has to present a report no later than 1 September 2023, which report is to investigate whether soybean oil should also be classified as "iLUC feedstock".


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Chart of the week (28 2023)

Australia remained primary rapeseed supplier to the EU in 2022/23

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At 7.3 million tonnes, EU-27 rapeseed imports from non-EU countries clearly exceeded the previous year's volume of 5.5 million tonnes. This translates to a 33 per cent rise. On the other hand, European soybean imports fell short of the previous year's level.

EU soybean imports declined to around 13.0 million tonnes in 2022/23. Brazil and the USA remained the most important suppliers, accounting for 41 and 40 per cent of total soybean imports to the EU, respectively. Ukraine delivered 1.3 million tonnes, more than double the previous year’s amount of 435,000 tonnes.

Unlike soybean imports, imports of rapeseed grew significantly compared to the previous year. With regard to origins, two trading partners stood out: Ukraine and Australia. Australia was the most important trading partner in 2022/23, accounting for around 49 per cent of the total imports. Also, at 3.6 million tonnes, imports were up 24 per cent on the previous year's level. Ukraine delivered 3.0 million tonnes of rapeseed, which translates to a 40 per cent share of total imports. A year earlier, the EU had received only 1.6 million tonnes from Ukraine. Around 283,500 tonnes came from Uruguay, compared with only 9,000 tonnes a year earlier.


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Chart of the week (27 2023)

Sunflower seed output set to hit record level

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In light of presumably larger harvests in the EU-27 and Ukraine, global sunflower seed output will probably hit a new record high in 2023/24.

The International Grains Council (IGC) projects a global sunflower seed harvest of 56.9 million tonnes in 2023/24. This would not only be up around 5 per cent on the previous year, but also 1.6 million tonnes more than previously expected. In other words, the previous record high of 56.2 million tonnes reached in the 2021/22 season will probably be exceeded by 700,000 tonnes. According to investigations conducted by Agrarmarkt Informations-Gesellschaft (mbH), the main reason for the upward revision is expected larger harvests in the EU-27 and Ukraine. Recent favourable growing conditions in parts of the EU are seen to have enhanced yield potential considerably. With 10.5 million tonnes currently forecast, the EU harvest is likely to be just about 15 per cent larger than the previous year.

According to latest information, the sunflower seed area in Ukraine amounts to 5.3 million hectares. Taking into account potential land in currently embattled areas, the Council estimates the production area at 6.5 million hectares, which would be an 8 per cent increase on the previous year. Against this background the harvest, which is currently estimated at 15.3 million tonnes, is set to exceed the previous year's level by just less than 9 per cent. However, the forecast is vague considering the continued war in eastern Europe. Russian production in the marketing season 2023/24 is seen to peak at 16.4 million tonnes for the second consecutive year. In other words, the country is set to remain the world's number one supplier of sunflower seed.


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Chart of the week (26 2023)

Oil mills sold more rapeseed oil

 

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Rapeseed oil sales by German oil mills remained well below the figures in the same months of the previous year at the beginning of the crop year, stagnated around the turn of the year and then really picked up pace in the second half of the crop year.

According to the German Federal Office for Agriculture and Food (BLE), German oil mills sold around 583,800 tonnes of rapeseed oil to the retail sector and commercial bottlers from July to April of the current crop year 2022/23. This was a 7 per cent rise on the 2021/22 reference period and up 11 per cent on 2020/21. In the same period, 202,200 tonnes of rapeseed oil went to the food industry. This was, however, down 2 per cent on the reference period.

On the other hand, according to investigations conducted by Agrarmarkt Informations-Gesellschaft (mbH), foreign trade in rapeseed oil from oil mills in Germany came up trumps. The tonnage rose 13 per cent to 303,800 tonnes compared to the same period a year earlier and as much as 29 per cent compared to 2020/21.

Rapeseed oil sales reached around 108,200 tonnes in April 2023, after peaking at 121,100 tonnes in March 2023.


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Chart of the week (25 2023)

Vegetable oil production in 2023/24 expected to be up on previous year

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Global output of vegetable oils is set to increase to new record highs in the 2023/24 crop year. Production of both rapeseed and soybean oil as well as palm oil will rise. However, production of sunflower oil will probably decline.

According to the latest outlook published by the US Department of Agriculture (USDA), 2023/24 global production of vegetable oils will amount to 222.8 million tonnes. This would be a 6.1 million tonne rise compared to 2022/23. In other words, production could fully cover demand of presumably 217.9 million tonnes. Ending stocks are seen to increase only insignificantly.

According to investigations conducted by Agrarmarkt Informations-Gesellschaft (mbH), palm oil is set to remain the world's most important vegetable oil in terms of manufacture and consumption, with global output estimated at 79.3 million tonnes. This translates to a 1.6 million tonne increase over 2022/23. In other words, palm oil accounts for just over 36 per cent of global vegetable oil production. Indonesia remains the largest producer with an output of 47 million tonnes, followed by Malaysia with 19 million tonnes and Thailand with just less than 3.5 million tonnes.

Production of soybean oil is expected to grow 3.7 per cent to 62.4 million tonnes in the coming crop year and could hit a new record. China remains the primary producer with production amounting to 17 million tonnes - based, however, on large seed imports. The US ranks second with 12.3 million tonnes. Rapeseed oil production is also expected to increase compared to 2022/23, by 200,000 million tonnes to 32.9 million tonnes. On the other hand, production of sunflower oil will probably decline around 10,000 tonnes to 20.8 million tonnes in 2023/24, although global supply of sunflowerseed is expected to exceed the previous year's figure due to expansions in area planted. Above all, this estimate reflects production declines in Argentina and Ukraine. The expected increase in sunflower oil production in the EU-27 is unlikely to offset these decreases.

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Chart of the week (24 2023)

Australia: rapeseed harvest expected to remain well below previous year

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In its latest estimate of 2023/24 rapeseed production, the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) anticipates a sharp slump in output on the previous year to 4.9 million tonnes. In the 2022/23 season, the country saw a bumper crop of 8.2 million tonnes.

The latest estimate is based on sowing operations, which are nearing completion, and the current drought, which is set to end the series of three consecutive bumper crops. An output of 4.9 million tonnes would translate to a 41 per cent decline from the 2023 record.

According to Agrarmarkt Informations-Gesellschaft (mbH) (AMI), the main reason for the sharp decline is lower per hectare yields due to the expected El Niño weather phenomenon, along with reductions in area planted. Although in the key production regions early autumn rains replenished sub-soil water supplies and ensured favourable growing conditions, the necessary autumn rain post sowing remained sub-standard in the northern production regions.

The AMI has pointed out the special harvest situation in 2023. The bumper crops overwhelmed storage capacities, which resulted in quality issues and storage losses. Nevertheless, prospects of attractive returns offered enough incentive for producers to grow rapeseed, with the result that only marginal land in dry areas was taken out of production.

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Chart of the week (23 2023)

2023 EU soybean output set to increase year-on-year

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UFOP: sustained grain legume production requires sustained support

EU-27 soybean supply is expected to rise again this year, although the soy area is seen to decline compared to 2022.

The soybean output of the European Union more than tripled over the past ten years. According to latest information from the EU Commission, the 2023 soybean harvest is expected at around 2.8 million tonnes, just under 16 per cent more than 2022. In other words, the European Union is set to see the largest soybean crop in six years. Italy is seen to remain the largest producer within the EU in 2023, with just over 1 million tonnes currently projected. This would translate to a 15.6 per cent rise year-on-year. The Commission also expects other member states' soy supply to exceed the previous year's level. France, the second largest EU supplier, is projected to see a 17 per cent increase to 438,000 tonnes. Romania's harvest, which is currently forecast at 394.000 tonnes, will probably rise even more strongly, by 63 per cent compared to 2022. Production in Croatia and Hungary is forecast to reach 251,000 tonnes and 171,000 tonnes respectively, which translates to an increase of 30 per cent and 35 per cent respectively.

By contrast, producers in Germany will probably harvest around 24.8 per cent less than 2022 – 91,000 tonnes – from a significantly reduced area. Likewise, Austria's harvest, which is currently forecast at 212,000 tonnes, will probably fall just under 14 per cent short of the previous year's level.

According to investigations conducted by Agrarmarkt Informations-Gesellschaft (mbH), the main reason for the EU-27's larger overall soybean supply is expected higher yields, since at 994,000 hectares, the soybean area will be 98,000 hectares smaller than in 2022.

The Union zur Förderung von Oel- und Proteinpflanzen (UFOP) has ascribed the decline in German production area to the 2021 level to the positive price development of other crops, such as wheat, at the time of last year's sowings. The association has pointed out that for the purposes of climate change mitigation and biodiversity conservation there is a need for early and reliable price incentives through forward contracts for all grain legume crops. According to the UFOP, such incentives are necessary in order to consolidate and further develop regional supply chains. The association holds that for the time being, they should be provided by area-based support during the development phase of the protein strategy, which support would need to be complemented by measures to promote product and hence value-added development. With a view to climate change, the UFOP has emphasised the need for considerable investment in crop breeding in order to sustainably establish these value chains. The new breeding techniques such as CRISPR/Cas could go a long way towards this aim. The association has suggested that it is now up to the EU Commission to propose a new regulation.

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Chart of the week (22 2023)

Sharp decline in rapeseed prices

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UFOP: reasons include questionable UCOME imports from China and double-counting

Stock exchange prices for rapeseed have been falling almost continuously since the beginning of the year.
Temporarily, they even slid below the level of EUR 400 per tonne for the first time since November 2020. According to the Union zur Förderung von Oel- und Proteinpflanzen (UFOP), this development is partly due not only to expected good global market supply of rapeseed, but also to imports of used waste oils and fats from China and biodiesel produced from them (UCOME - Used Cooking Oil Methyl Ester) in the amount of approximately 500,000 tonnes since the end of 2022.

Doubts have been raised in industry circles about the correctness of the certifications and required proofs of raw material origin. The UFOP has explained that if these biofuel volumes are counted double against quota obligations in Germany and other EU member states, such virtual crediting to meet GHG quota obligations reduces physical demand accordingly, especially for rapeseed oil-based biodiesel. The association fears that this puts a fundamental question mark over the credibility of sustainability certification. Consequently, the German government and EU Commission should take vigorous action. The UFOP has also underlined the need for more on-site inspections.

In line with the complex market situation, Paris futures market quotations for rapeseed have been falling virtually unchecked for several months. European rapeseed also lost in value based on slipping crude oil and palm oil prices and a temporary decline in US soybean prices. Both the US Department of Agriculture (USDA) and the International Grains Council (IGC) recently forecast that supply of rapeseed and soybeans will be more than adequate in the coming season 2023/24. Above all, the EU could see the largest rapeseed harvest in five years with an expected 20.0 million tonnes. The current favourable weather conditions and good field crop development indicate that this might actually happen. Conditions are forecast to be favourable also in the weeks ahead, especially in France, Germany and Romania.

The August 2023 nearby closed at EUR 385 per tonne on 30 May 2023. At the same time a year ago, the close was more than double at EUR 814.75 per tonne as Russia's invasion of Ukraine drove prices to unprecedented heights.


The situation of soybean prices in Chicago is different. Having firmed temporarily, they recently also slipped. The focus in the soybean market has been on growing and harvesting conditions in South America and the US. Lack of rain and excessive heat have diminished the yield potential of the ongoing soybean crop in Argentina noticeably. By contrast, Brazil is set to harvest a bumper crop. Another reason for the decline in soy prices is dwindling demand for US deliveries. Brazilian competition currently dominates the export market, outstripping the US batches.

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Chart of the week (21 2023)

IGC expects 2023/24 dry pea output higher than the previous year

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More dry peas are expected to be harvested both in Russia and the US and EU-27 in 2023/24 than the previous season. Consequently, global production will probably also exceed the previous year' level.

According to recent information published by the International Grains Council (IGC), global dry pea production in the 2023/24 season is set to reach 14.0 million tonnes. This would not only be up 0.3 million tonnes on the previous season, but also the largest volume in the past three years. The main reason for the projected increase is larger harvests in Russia and the US. For the Russian dry pea output, the estimate of 3.7 million tonnes translates to a rise of 1.4 per cent on the year. In other words, Russia is top of the list of dry pea producers for the third consecutive year. The US harvest, expected at 700,000 tonnes, is seen to be up as much as 45.6 per cent on the previous year. The IGC's upward revision is based on an expansion in area planted in Montana, North Dakota and Idaho and expected average crop yields. Production of dry peas in the EU-27 is also seen to rise 4.1 per cent to 1.9 million t tonnes.

By contrast, Canada's 2023/24 dry pea harvest is set to decline 5 per cent on the year to 3.3. million tonnes, according to investigations conducted by Agrarmarkt Informations-Gesellschaft (mbH). The main reason is a decrease in area planted. Large ending stocks and waning export demand led Canadian farmers to reduce the dry pea area.

The Union zur Förderung von Oel- und Proteinpflanzen (UFOP) has said that the potential for dry pea production is far from being fully exploited, especially in Europe. The association holds that the success of the European protein plant strategy is also judged by increases in production area. Grain legumes, specifically dry peas, could go a long way towards enhancing biodiversity, climate change mitigation and the economic resilience of crop rotation in a comparatively short time. The UFOP has emphasised that to this end funding should be improved under the common agricultural policy (CAP) – along the lines of the benefits and targets of the Commission's "Farm to Fork" strategy.

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Chart of the week (20 2023)

Bumper soybean crop expected for 2023/24

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The US Department of Agriculture (USDA) expects the global soybean harvest to hit a record at 410.6 million tonnes in 2023/24. This would be a rise of 11 per cent or 40.2 million tonnes from 2022/23.

If this forecast were to come true, soybean production would see the sharpest year-on-year rise in ten years. The forecast is mainly based on significantly higher yield expectations in Argentina following this year's historic drought. Argentina accounts for more than half of the expected harvest increase, with production reaching 48.0 million tonnes (+21 million tonnes on the previous year). Brazil, Uruguay and Paraguay account for more than a quarter, which is due to both an expansion in area planted and yield increases. Brazil will probably remain the world's number one soybean producer with 163.0 million tonnes (+8 million tonnes). Although the US soybean area is likely to remain unchanged, the USDA sees US production up 6.4 million tonnes (to 122.7 million tonnes) on the previous year. The main reason is anticipated yield increases.

At the same time, the USDA presents the prospect of an increase in global soybean consumption in 2023/24. According to the latest estimate, soy consumption is set to reach 386.5 million tonnes, around 21.4 million tonnes more than the previous year. According to investigations conducted by Agrarmarkt Informations-Gesellschaft (mbH), with world production at 410.6 million tonnes, this would mean an expected supply surplus of 24.1 million tonnes. As a consequence, ending stocks 2023/24 would likely rise for the second year running, to 122.5 million tonnes, thus exceeding the previous year's volume by 21.5 million tonnes and setting a new record high.

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Chart of the week (19 2023)

France remains primary EU-27 rapeseed producer

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The vegetable oil index declined for the fifth time running in April 2023, reaching a level of 130 points. This was down 1.8 points, or 1.3 per cent, on the previous month. Only prices for palm oil remained unchanged from the previous month, whereas sunflower oil, soybean oil and rapeseed oil traded lower.

After a brief upswing in March 2023, palm oil prices virtually remained unchanged in April, as the downward pressure from weak demand was almost offset by limited supply. In contrast, according to investigations conducted by Agrarmarkt Informations-Gesellschaft (mbH), asking prices for soybean oil continued to move downwards. The main factor driving the slide was the expected bumper crop of soybeans in Brazil, whereas drought and extreme heat limited the Argentine yield potential enormously, thus dampening the decline. At the same time, prices of rapeseed oil and sunflower oil continued their downward slide, especially as a consequence of the continued worldwide abundance of supply of exportable oils and seeds combined with restrained demand.

The FAO cereal price index averaged 136.1 points in April 2023. This was down 2.4 points (1.7 per cent) on the previous month and down as much as 33.5 points (just less than 20 per cent) from a year earlier. The decline in world market prices for important cereals outweighed the increase in prices for rice.

The Union zur Förderung von Oel- und Proteinpflanzen e. V. (UFOP) has noted that the price indices for vegetable oil and cereal have reached the level they had before Russia's war against Ukraine began. The same applies to the April 2023 level of price increases for energy, fuels and fertilisers. The UFOP sees producer prices hitting a level that is economically critical for agriculturists in the European Union, given the current index level. As a consequence of the stabilisation of energy prices, producer prices for field crops need to increase generally to provide a basis for sustained production and diversified crop rotation. The association has emphasised that resilient crop rotation is primarily the result of economics.

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Chart of the week (18 2023)

France remains primary EU-27 rapeseed producer

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EU Commission expects larger rapeseed harvest than previous year

Both France and Germany will probably harvest more rapeseed in 2023 than a year earlier. The same applies to Lithuania and Hungary. The biggest production increase is expected in Romania.

Due to the mild temperatures and higher-than-average precipitation amounts, rapeseed crops on German fields look very good. According to recent information, the EU Commission assumes the 2023 German rapeseed harvest to reach 4.5 million tonnes. This would translate to a 232,000 tonne rise on the previous year. Following abundant rainfall, however, soils cannot be driven over in some areas. As a consequence, field work is delayed. France is also seen to harvest less rapeseed than a year earlier, just less than 4.6 million tonnes. This means that France is set to remain the number one of the top EU rapeseed producers for now.

The biggest increase is expected in Romania. According to information published by the EU Commission, the country's rapeseed harvest is set to grow to around 1.6 million tonnes in 2023. This would be up a full 33 per cent on the drought year 2022 and the largest amount in six years. The Czech Republic, Lithuania and Hungary are also forecast to bring in larger rapeseed harvests. By contrast, Poland, the EU's third most important rapeseed producer, is expected to see a decline of 8 per cent to 3.4 million tonnes on the previous year. According to investigations conducted by Agrarmarkt Informations-Gesellschaft (mbH), Denmark is also likely to bring in a smaller harvest.

The projected drop in rapeseed production in Poland and Denmark can be more than offset by the expected increases in France, Germany and Romania. More specifically, the Commission has forecast a EU rapeseed crop of 20 million tonnes, which harvest amount would not only be 464,000 tonnes higher than in 2022, but also the second largest output ever. It is only topped by the 2014 harvest of 21.8 million tonnes.

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Chart of the week (17 2023)

German rapeseed imports unchanged from previous year

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Ukrainian exports rose despite the war

Whereas the pace of Canadian rapeseed imports has slowed down since January, imports of Australian rapeseed to the German market have increased markedly.

According to information published by the German Federal Statistical Office, Germany purchased around 3.7 million tonnes of rapeseed in the period from July 2022 to February 2023. Despite a significantly larger domestic harvest, this was almost the same amount as in the same period a year earlier. Australia provided around 777,730 tonnes, which was nearly twice the previous year’s amount. Deliveries from Canada rose less sharply, because they did not start until September. They increased 11 per cent on the year-earlier period to around 47,000 tonnes, with the pace of imports slowing down significantly recently.

Imports from Ukraine grew 8 per cent to 638,800 tonnes despite the challenges and dangers associated with the war. Agrarmarkt Informations-Gesellschaft (mbH) has pointed out that this volume stills falls short of the long-term average of 730,500 tonnes. Deliveries from Poland surged around 23 per cent to 307,700 tonnes. This was due to a 14 per cent harvest increase and, above all, the enormous volumes of Ukrainian rapeseed stored in Polish warehouses. In the period from July 2022 to April 2023, Poland received around 1.42 million tonnes of rapeseed from its neighbouring country, close to ten times the previous year's volume (of 160,000 tonnes).

At 232,600 tonnes, Romania delivered just under 26 per cent less due to an 18 per cent harvest decline. Based on a 36 per cent rapeseed harvest increase, France expanded its share in German rapeseed imports exceptionally strongly. The country delivered around 601,000 tonnes, exactly one third more than in the year-earlier period.

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Chart of the week (16 2023)

Rapeseed consumption increasing worldwide

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The USDA has raised its estimates for world production and consumption of rapeseed. 

In the current report on global supply and demand, the US Department of Agriculture (USDA) estimated world rapeseed production in the current crop year at around 87.2 million tonnes. This is up 900.000 tonnes on the previous month's forecast. Rapeseed production in the previous crop year was around 14.5 per cent lower at 74.5 million tonnes. The lift from the previous month is mainly based on expected production increases in Bangladesh. The USDA forecast for the world's six top rapeseed producing countries was left unchanged relative to the March outlook, with only marginal upward revisions to estimates for the EU-27 and Russia.

The USDA expects global rapeseed consumption in the 2022/23 crop year to reach around 84.0 million tonnes, which is up 1.6 million tonnes on the March forecast. This would be an increase of 8.4 million tonnes on the previous season.

Although global production is seen higher than the previous month's estimate, end of season stocks are likely to be 500,000 tonnes smaller than projected in March at 6.2 million tonnes. According to investigations conducted by Agrarmarkt Informations-Gesellschaft (mbH), the reason is higher processing use and a brisk world trade in rapeseed. At the end of the crop year 2021/22, only 4.1 million tonnes of rapeseed were put in storage. In other words, end of season stocks 2022/23 will likely exceed the previous year's volume by around 50 per cent.

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Chart of the week (15 2023)

EU sunflower seed output set to hit record level in 2023

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Especially in Romania and Hungary, sunflower seed output is expected to increase significantly compared to the previous year. It is seen to more than offset the anticipated declines in France and Germany.

According the latest EU Commission estimates, around 10.9 million tonnes of sunflower seed will be harvested in the EU-27 in 2023. This would not only be up just under 18 per cent on the previous year, but also hit a new record high. The forecast is based solely on yield increases, since the EU sunflower area will probably be around 7 per cent smaller than 2022 at 4.8 million hectares.

Romania is set to strengthen its position as the largest EU producer. At 3.3 million tonnes, the estimate is up as much as 967,000 tonnes – just less than 42 per cent – on the previous year. According to investigations conducted by Agrarmarkt Informations-Gesellschaft (mbH), the main reason for the strong production increase is higher yields, because the area planted with sunflowers will probably decrease marginally to 1.3 million hectares. Other EU member states, including Hungary, Bulgaria, Greece, Italy and Slovakia, are also expected to see considerable harvest increases. By contrast, France is forecast to harvest only 1.7 million tonnes of sunflower seed. This would translate to an around 105,000 tonne decline on 2022, partly because the sunflower area will probably be around 12 per cent smaller. For Germany, the EU Commission projects a sharp slump in sunflower seed production by more than half. Around 67,000 tonnes of sunflower seed are expected to be produced on a significantly reduced area of 32,000 hectares. A year earlier, the German sunflower area was expanded to a record high of 86,000 hectares due to the war against Ukraine, with production reaching 159,000 tonnes.

From the perspective of the Union zur Förderung von Oel- und Proteinpflanzen e. V. (UFOP), this response in production behaviour is easy to understand since producer prices have fallen back to normal levels following their overheated development last year and with expected higher contribution margins, farmers have increasingly returned to relying on winter-planted crops. According to the UFOP, the development also highlights the importance of medium-term production and delivery contracts with traders and processors, if the German sunflower market is to be established at a permanently higher level.

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Chart of the week (14 2023)

EU Commission forecasts decline in EU soybean area for the 2023 harvest – UFOP welcomes the EU Commission's deliberations on how to develop and advance the European protein strategy

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The legume area for the 2023 harvest is projected to see a slight decline.  The decrease is especially due to the smaller soybean area. The production area of feed peas and field beans could be expanded. 

According to an initial forecast of the EU Commission, the area dedicated to legume production in the EU-27 for the 2023 harvest is set to decline a good 1 per cent to just less than 2.5 million hectares. Nevertheless, this would still be the third largest legume area in the past ten years. Soybeans have accounted for the largest share since 2018. At an estimated 1 million hectares, the soybean area will probably drop just less than 9 per cent on the previous year, but still remain in the six-digit hectare range. The EU Commission sees 2023 feed pea production up 6 per cent compared to the previous season at 816,000 hectares. Field beans are expected to be sown on a 6 per cent larger area of around 464,000 hectares. By contrast, the sweet lupin area is estimated to shrink 4 per cent to 205,000 hectares.

As regards feed peas and field beans, the 2023 harvests could also increase, depending on weather conditions. Based on average yields, the feed pea harvest could increase 14 per cent year-on-year to 2.1 million tonnes. Whereas the harvest potential for field beans is seen to increase 8 per cent to 1.3 million tonnes, the EU Commission estimates the sweet lupin harvest at 273,000 tonnes, just under 5 per cent less. By contrast, according to investigations conducted by Agrarmarkt Informations-Gesellschaft (mbH), the decline in soybean area will probably be more than offset by expected higher yields. More specifically, the 2023 harvest could hit a record at 2.8 million tonnes, which would be rise of just less than 16 per cent on 2022.

With a view to the national arable farming strategy, the UFOP has urged to render the strategy visible by means of advanced crop rotation concepts and cultivation methods. This could be achieved by assessing the holistic approach of ecosystem services also in monetary terms. Such assessment would add an economic price tag to society's demand for more biodiversity in crop production. The UFOP has underlined that this is a necessary requirement for expanded crop rotation systems that include protein crops to develop into an economically sustainable component in arable farming, also in terms of business assessment. According to the UFOP, however, at the end of the day consumers decide at the point of sale whether such "binding" of land, as discussed in the Farm to Fork-Strategy of the European Commission, and effort are in fact wanted and also rewarded. Just how much perseverance it takes is also reflected in the "LeguNet" demonstration project which is funded by the German Ministry of Agriculture and in which the UFOP is involved as a project partner.

On the European level, the association welcomes the EU Commission's deliberations to develop the European protein strategy into a comprehensive, holistic approach. According to the UFOP, such approach should include both the direct use of vegetable protein as a source of protein for human nutrition and its indirect use via animal feeds, which use the livestock sector would stand to benefit.

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Chart of the week (13 2023)

Oilseed processing declined

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In the first half of the running marketing year 2022/23, German oil mills processed less rapeseed, sunflower seed and fewer soybeans than in the same period a year earlier.

According to information published by the German Federal Office for Agriculture and Food (BLE), oil mills in Germany processed just under 4.5 million tonnes of rapeseed in the period July through December 2022. This translates to a just over 5 per cent decline year-on-year. Processors did not receive new supply from German production until August 2022, which was somewhat late. According to the BLE, rapeseed processing amounted to only 536,200 tonnes in July 2022, but increased to 721,200 tonnes in September and as much as 855,800 tonnes in October 2022. The all-time peak was recorded at 883,000 tonnes of rapeseed in August 2021.

Processing of other oilseeds slowed compared to the previous year's period, declining just under 11 per cent to 1.6 million tonnes in the half year under review. A noticeable increase was not recorded until December 2022, with processing reaching 323,500 tonnes, which compared to an average of 258,000 tonnes in the months before. Total oilseed processing amounted to just under 6.2 million tonnes. This was down 6.8 per cent on 2021 and comparable to the figure recorded in 2019. In general, production of vegetable oils and meals saw a slight decrease.

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Chart of the week (12 2023)

Presumably more sunflower seed in 2023/24

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The International Grains Council (IGC) projects a global sunflower seed harvest of 54.8 million tonnes in 2023/24. This would be a rise of 8 per cent or 4 million tonnes from the current season.

The main reason for the projected growth is anticipated yield increases, which are seen to return to near-average levels following heat-related disappointing results in 2022. According to investigations conducted by Agrarmarkt Informations-Gesellschaft (mbH), this especially applies to European production. More specifically, EU-27 sunflower seed output is expected to rise 1.1 million tonnes on the previous year. Notwithstanding uncertainties due to the war, the IGC expects Ukrainian production to increase 1.5 million tonnes to 13.5 million tonnes. Russia is seen to harvest 15.8 million tonnes (+0.8 million tonnes). The IGC projects the US sunflower seed output lower than in 2021. By contrast, China is not expected to see any significant changes in production.

The IGC has pointed out that the crop forecast is quite vague at this point because sowing campaigns have not even started in the most important sunflower seed producing countries. The projection for Ukraine is particularly difficult to make, because a significant part of the traditional production area is located in the currently embattled regions.

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Chart of the week (11 2023)

Argentina no longer among top three soy exporters

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The crop forecast for Argentina was lowered again considerably, which also reduced consumption and export estimates.

In its latest report, the US Department of Agriculture (USDA) expects the global soybean crop in 2022/23 to reach around 375 million tonnes. This would be down just under 8 million tonnes from the February forecast, but up 17 million tonnes on 2021/2022. The decrease of the forecast compared to the previous month is mainly based on the drastically lowered outlook of Argentine production. The country has been struggling with continued dryness and extreme heat for several weeks, which is hampering yield prospects further. Argentina is expected to harvest only around 33 million tonnes of soybeans, 8 million tonnes or just under one fifth less than projected in February. With regard to other key soybean producing countries, such as Brazil, the US and India, the USDA holds on to its previous month's forecast.

World consumption is seen at around 371.1 million tonnes, down 5.3 million tonnes from the February forecast. Nevertheless, this translates to an increase of almost 9 per cent on the previous marketing year. The USDA lowered its consumption forecast especially for Argentina, to around 41 million tonnes in the current crop year. This is down 3.6 million tonnes from the February estimate and down 5.1 million tonnes on 2021/22. According to investigations conducted by Agrarmarkt Informations-Gesellschaft (mbH), China's consumption is also likely to decline, more specifically just about 2.0 million tonnes to the projected 113.3 million tonnes.

Based on data from the USDA, around 100 million tonnes of soybeans are expected to be in storage at the end of the current marketing year, just over 2 million tonnes less than estimated in February, but about 1 million tonnes more than last year. Whereas China's stocks are seen to increase just under 2 million tonnes compared to the February forecast to 34.3 million tonnes, Argentine and Brazilian ending stocks are expected to shrink 2.6 million tonnes and 0.7 million tonnes respectively to 19.8 million tonnes and 31.5 million tonnes. Also, US ending stocks are projected to decline 0.4 million tonnes to 5.7 million tonnes.

On a global scale, around 168.4 million tonnes of soybeans will likely be shipped across the world's oceans in 2022/23. In other words, the USDA revised its previous month's forecast up just under 1 million tonnes. By comparison, just less than 154 million tonnes were shipped in the previous crop year. The increase over the previous month is especially based on expected larger exports from Brazil. Due to the considerably larger harvest, Brazil is seen to export approximately 92.7 million tonnes.

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Chart of the week (10 2023)

EU rapeseed imports 45 per cent above year-ago level

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A slight decline of 1 percent to 2.516 million tonnes of biodiesel (from 2.560 million tonnes in 2021) was recorded for the 2022 calendar year. By contrast, the use of bioethanol in blends increased 3 per cent from 1.153 million tonnes to 1.186 million tonnes.

The preliminary statistics for 2022 published by the Federal Office for Economic Affairs and Export Control (BAFA), show an incorporation rate of 7.2 per cent for biodiesel and 7.0 per cent for bioethanol. Total consumption in Germany in 2022 amounted to 34.7 million tonnes of diesel (B 7) and approximately 17.0 million tonnes of petrol (E 5/E 10). This means that total consumption was at the previous year's level.

The Union zur Förderung von Oel- und Proteinpflanzen e. V. (UFOP) has pointed out that raising the greenhouse gas quota obligation from 6 per cent to 7 per cent the previous year did not lead to an increase in biofuels consumption, because trading in greenhouse gas reduction quotas and the increased efficiency of biofuels used in reducing greenhouse gas emission offset additional demand.

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Chart of the week (09 2023)

EU rapeseed imports 45 per cent above year-ago level

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Year-to-date EU-27 rapeseed imports significantly exceed year-earlier levels – despite a considerably larger EU rapeseed harvest than last year.

In the current crop year 2022/23, rapeseed imports to the EU-27 climbed significantly. From July through February, member states already imported 4.6 million tonnes from non-EU countries. This was a full 45 per cent rise on the same period a year earlier. The main reason for the large import volume is not only abundant supply of EU rapeseed, but also availability and therefore the prices on the global market.

According to information published by Agrarmarkt Informations-Gesellschaft (mbH) (AMI), Ukraine has maintained its top position among the key rapeseed suppliers to the EU in the current crop year despite the continuing war. With 2.6 million tonnes, just under 63 per cent more than in the same period a year earlier, the country accounts for 56 per cent of EU rapeseed imports.  This share compares to 50 per cent in 2021/22. Australia gained in importance due to a bumper crop and now ranks second most important supplier to the EU with 1.7 million tonnes and a share of 36.4 per cent. This ís twice the amount of the same period a year earlier. By contrast, imports from Canada slumped. At 193,400 tonnes, the EU took only a fraction of the previous year’s amount of 501,800 tonnes. In other words, Canada's share in total EU imports dropped 12 per cent to 4.2 per cent. Supply from Moldova and Serbia to the EU-27 also declined compared to 2021/22.

The Union zur Förderung von Oel- und Proteinpflanzen e. V. (UFOP) has noted that the bottlenecks feared last year were mitigated by shipments to EU member states bordering Ukraine. The reason is that suppliers sought alternative delivery routes to the closed or blockaded sea ports. In the case of grain supply to the EU, there are even extreme market distortions at the moment instead of bottlenecks. The Polish farmers association has therefore called for an expansion of bioethanol production capacity to reduce pressure on the market and mitigate climate change. It also wants Super E 10 to be introduced across the board on the Polish market as soon as possible. The Indian Prime Minister Modi recently announced the expansion of bioethanol production and increase of the blending mandate to 20 per cent (E 20). At the same time, the German government is discussing a phase-out of blending biofuels from cultivated biomass.

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Chart of the week (08 2023)

Foreign trade in biodiesel rose to record level

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UFOP: GHG quota policy is driving imports and exports of biofuels:
In the marketing year 2022, Germany shipped around 2.3 million tonnes of biodiesel abroad, the largest quantity ever. Imports also hit an all-time high of 1.4 million tonnes. The Netherlands remained the primary trading partner, in both directions.

The Netherlands remained by far Germany's most important trading partner for biodiesel. In fact, the country gained in importance in 2022, taking 21 per cent more biodiesel (1.16 million tonnes) than in 2021. The previous record high reached in 2020 was exceeded by 124,000 tonnes. With the Rotterdam facilities, the Netherlands is the most important European hub for world trade in biodiesel. Trade to Belgium and Poland also increased. Belgium, ranking second most important recipient country, purchased around 635,900 tonnes of biodiesel from Germany in 2022. This translates to a 61 per cent rise year-on-year. At 287,200 tonnes, shipments to the US doubled compared to 2021. Total German biodiesel exports reached a new record level at 2.34 million tonnes, with output amounting to approximately 3.2 million tonnes.

According to investigations conducted by Agrarmarkt Informations-Gesellschaft (mbH), biodiesel imports to Germany in the year 2022 had a volume of 1.36 million tonnes, which was up 31 per cent on 2021. The largest volumes came from the Netherlands, Belgium, Malaysia and Austria.  The increase in imports from Austria was particularly noticeable. At 82,000 tonnes, the volume shipped to the German market was a good one-and-a-half times higher on the previous year. Malaysia shipped around 84 per cent more. By contrast, imports from France virtually collapsed, nosediving 45 per cent.

According to the Union zur Förderung von Oel- und Proteinpflanzen e.V. (UFOP), the German GHG quota policy is the key driver of this strong trade in goods. This is a desired effect of the resources policy and it is confirmed by the feedstock figures for the biofuel volumes that are counted towards GHG reduction targets, which figures have been published in The Evaluation and Progress Report by the German Federal Office for Agriculture and Food (BLE). In view of the initiative the Federal Minister for the Environment, Lemke, has repeatedly launched to abolish biofuels from cultivated biomass, the UFOP has expressed regret that this impact of the GHG quota regime is not recognised. The association has also underlined that for quality reasons, practically only rapeseed oil methyl ester (RME), i.e. feedstock from European cultivation, can be used to meet winter specifications.

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Chart of the week (07 2023)

Brazilian soybean production set to hit new record high

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Brazil and Argentina re-affirm their shares in the global soybean market this crop year. Whereas Brazil is expecting another bumper crop, Argentine soybean output is projected to fall significantly short of the previous year's figure.

Brazil, the US and Argentina are the world's main soybean producing countries, collectively accounting for 81 per cent of global soybean output. India follows a long way behind with a share of 3 per cent. According to a USDA estimate, Brazil is seen to harvest an all-time record of 153 million tonnes of soybeans in the current crop year, which would be up around 23.5 million tonnes on the previous year. Brazil is consolidating its number one position ahead of the US based on a 1.9 million hectare expansion in soy production area to 43.4 million hectares. In the US, the soybean harvest was already complete by the end of the year 2022. It amounted to around 116.4 million tonnes, which translates to a decline of around 5.2 million tonnes year-on-year.

In Argentina, the world's third largest producer of soybeans, the harvest is set to decrease substantially compared to the previous year due to the continued dryness and extreme heat. November 2022 was in fact reported to be the hottest month ever in Argentine history. Against this background, the harvest is likely to decline around 2.9 million tonnes year-on-year to 41 million tonnes. In contrast, according to the latest USDA estimate, India anticipates an increase in harvest volume of around 100,000 tonnes on the previous year to 12 million tonnes.

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Chart of the week (06 2023)

Increase in rapeseed production reduces import demand

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A significantly larger rapeseed harvest in the EU-27 has lowered the need for imports. Continued high demand for rapeseed oil for use in biofuels production and rapeseed meal for feeding purposes spurred processing.

According to information published by the EU Commission, the rapeseed harvest in the EU-27 was significantly larger in 2022 than in 2021. It is pegged at 19.6 million tonnes, which translates to a rise of around 2.5 million tonnes compared to 2021. In other words, the EU harvested the largest crop in five years, although substantial harvest losses had been expected because of the continued dryness and heat. According to investigations conducted by Agrarmarkt Informations-Gesellschaft (mbH), the rise is mainly the result of rapeseed harvest increases, especially in France and Germany. Denmark, Lithuania and Poland also recorded a rise. The harvest increases more than offset production declines in other member states. In other words, harvest figures are above-average again for the first time in four 4 years.

Total consumption in the EU-27 is seen at 24.2 million tonnes, up around 9 per cent year-on-year. Demand from oil mills is estimated at 23.3 million tonnes, which would also be an increase of just less than 9 per cent on 2021/22. A year earlier, just under 80 per cent of EU processing was sourced in European production. In 2022/23, the share will presumably climb to just over 84 per cent. For this reason, the EU Commission expects that in the current crop year less rapeseed will have to be imported. Rapeseed imports are forecast at 5.1 million tonnes, which is down 8 per cent compared to the previous year's volume. Ending stocks are seen to remain unchanged form the previous year at a below-average level of 0.5 million tonnes.

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Chart of the week (05 2023)

World harvest of dry peas increased

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Both in Canada and Russia, the 2022 dry pea harvests were significantly larger than the previous year. Consequently, global output will probably also exceed the previous year's  level. UFOP calls on German federal and state governments to provide more support for domestic protein crops.

The International Grains Council (IGC) assumes that the global dry pea harvest will amount to 13.6 million tonnes in the marketing year 2022/23. According to investigations conducted by Agrarmarkt Informations-Gesellschaft (mbH), this would translate to an 11.3 per cent increase on the previous season. The outlook is mainly based on higher harvest estimates for Canada and Russia. Canada – traditionally the world's most important dry pea-producing country – is expected to have harvested 3.4 million tonnes, around 1.1 million tonnes or 51.6 per cent more than in the historically weak previous year.

Russia also recorded a substantial rise. At 3.7 million tonnes, the dry pea harvest was up around 15.2 per cent on 2021. Consequently, the country is top of the list of dry pea producers for the second consecutive year. The EU-27 follows in third place with production remaining unchanged from the previous year at 1.8 million tonnes. According to the IGC, the decline in France, Spain and Romania was probably fully offset by larger harvests in Germany and Lithuania. The 2022 Ukrainian dry pea harvest is projected at 300,000 tonnes, down around 54.1 per cent on the previous year's levels due to the continuing war.

In view of the EU's large need for imports of feed protein, the Union zur Förderung von Oel- und Proteinpflanzen e.V. (UFOP) has emphasised that the big potential of the production of dry peas and other large-grain legumes such as field beans, lupins and soybeans could be tapped. This was confirmed by the studies on UFOP's "10 + 10" strategy published by the association in February 2022. According to the UFOP, farmers have been waiting in the wings for many years without making any headway due to a lack of demand volume via value added in the commodity chain. Addressing the German Ministry of Agriculture, the UFOP has called for stronger and reliable support for the protein crop strategy in terms of product development and sales promotion in order to provide a sustainable economic incentive to expand crop rotation with grain legumes. The German states have also been urged to promote grain legume cultivation through second-pillar agricultural policy programmes. Consumer interest is basically strong. This was reflected in a lot of discussions with visitors to the UFOP stand during the International Green Week. Also, many producers are strongly committed to developing products for direct use in the human diet.

The UFOP has emphasised that the importance of these crops as flowering plants for biodiversity as well as nitrogen-fixers for climate protection – and, consequently, their contribution towards the overall ecosystem performance of extended crop rotation systems – is common knowledge and generally acknowledged. In light of climate change and its implications, the pressure to act and succeed is enormous, the association has underlined, referring to the 1.5-degree target to be reached by 2030. The UFOP has stressed that grain legumes are an essential element to improve soil fertility, establish resilient crop rotations and increase soil carbon content.

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Chart of the week (04 2023)

Minor global land requirement by biofuels

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UFOP: feedstock production for biofuels buffers supply to ensure food security

In 2021, crop plants were grown on more than 1.4 billion hectares worldwide, including grain, oilseeds, protein, sugar and fibre plants, fruits, vegetables, nuts and others. Most of these crops were used directly or indirectly, via livestock feeds, for human nutrition. Only around 8 per cent of the crop area served to supply feedstock for biofuels production.

Production of feedstock for use in biofuels is concentrated in regions with structural surpluses. This is reflected in high mandates for blending compared to the EU, for example in Indonesia (35 per cent biodiesel) or the US (15 per cent bioethanol). The main motives are stabilising the market and agricultural producer prices as well as making a contribution towards securing energy supply. If there were no biofuels which serve as a supply buffer, pressure on feedstock prices would increase.

The Union zur Förderung von Oel- und Proteinpflanzen e.V. (UFOP) has pointed out that high-quality protein is obtained as a by-product of biofuel production and used for livestock feeding purposes or directly in the human diet. The argument of land requirement for biofuels production urged in the debate on global changes in land use disregards the fact that the percentage of area used for protein production should be subtracted and accounted for. With rapeseed having a share of 60 per cent feed protein, only 40 per cent of the crop area should be allocated to the production of biofuels, the UFOP has argued. From the association's perspective, this would be a fair and proper approach, because missing protein volumes would have to be made up for by imports that would require additional land use.

This compensating effect is deliberately neglected in all so-called iLUC studies and related discussions. UFOP has strongly emphasised this fact in view of the initiative recently announced by the Federal Minister for the Environment Lemke to phase out production of biofuels from cultivated biomass as from 2030. From the perspective of the UFOP, it is incomprehensible that the German Minister of Agriculture Özdemir supports this initiative and disregards the interdependencies that have long been common knowledge. After all, domestic and European rapeseed production to make transport fuel also secures supply of genetically unmodified rapeseed protein for milk production. Virtually every dairy product bearing the "without GM“ label demonstrates that the cows at the top end of the commodity chain were fed with sustainable certified rapeseed meal from biodiesel production.

With her initiative, Federal Minister for the Environment Lemke is also creating precedents that put a question mark on the point and necessity of drawing up and discussing a National Biomass Strategy (NABIS) with agriculturists. Where is the basis of discussion if the legal framework is defined unilaterally, as in the case of biofuels, the UFOP is asking. According to the association, the bill anticipates the result. The preference the strategy gives to the material use of renewables will come to nothing because of the lack of concepts for market access of products from locally grown feedstocks. The size of production area plays virtually no role – despite 30 years of product promotion by the German Ministry of Agriculture. The majority of feedstocks, such as palm oil, is imported anyway. Ironically, proof of deforestation-free sourcing of such imports has been a statutory requirement since 2020. Such proof has been required for biofuels already since 2009 (no deforestation after 2008). The UFOP has underlined this fact, pointing out that the association has repeatedly highlighted the role model function the sustainability certification has and the sanction possibilities it offers – even in non-EU countries. The association added that the proof of greenhouse gas reduction is also the key to market access.

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IGC sees global rapeseed area for the 2023 harvest marginally down on last year

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Whereas the rapeseed areas in India, China and Australia are expected to decline, those in the EU-27 and Ukraine are seen to increase.

In its first estimate of the global rapeseed area for the 2023/24 marketing season, the International Grains Council (IGC) projected an area of 40.2 million hectares. The estimate is 1.5 per cent below the current season's record area and would be the second largest rapeseed area ever. It would significantly exceed the long-term average. Whereas rapeseed production in India, China and Australia will presumably decrease, according to Agrarmarkt Informations-Gesellschaft (mbH) the Canadian rapeseed area is set to remain unchanged from the previous year at 8.6 million hectares. The Council pointed out that the first forecast involves a great deal of uncertainty.

According to the estimates, the EU-27 rapeseed acreage for the 2023/24 marketing season was expanded to 6.0 million hectares. This would be up 1.7 per cent on the previous year's area. In particular, France and Germany (1.2 million hectares) saw an increase in rapeseed area. At the end of December, the condition of most winter crops was considered to be good. According to surveys conducted among producers, the UK rapeseed area was also expanded significantly, by 14 per cent, compared to the previous year.

In Ukraine the area planted to rapeseed is expected to expand 8.3 per cent to 1.3 million hectares, whereas the Grain Council sees Russia's area unchanged from the previous year at 2.3 million hectares

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FAO-price index below previous month's mark

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UFOP: sustained biofuels contribute towards securing food and energy supply

Both the FAO vegetable oil index and the cereal price index eased month-on-month. Nevertheless, record highs were reached year-on-year.

The December FAO vegetable oil price index averaged 144.4 points, which was down 6.7 per cent on the previous month' s level. In other words, the index reached the lowest level since February 2021, particularly due to falling prices for palm, soybean, rapeseed and sunflower oil. World market prices for palm oil dropped just about 5 per cent after having recovered for just a short time the previous month. The key reason was restrained global demand, because output by the most important palm oil-producing countries declined due to excessive rain. World market prices for soybean oil also showed a decrease, above all because of bright prospects for a seasonal rise in production in South America. Prices for rapeseed and sunflower oil fell based on abundant supply and dampened demand, especially in the EU. Pressure also came from declining crude oil prices. Looking at the entire year 2022, the FAO vegetable oil price index was 187.8 points. This translates to a 13.9 per cent increase on 2021 and sets a new annual record. 

International grain prices waned in December. The FAO cereal price index averaged 147.3 points. This was down 4.8 per cent on the previous month, but still up 4.8 per cent on the same month the previous year. According to investigations conducted by Agrarmarkt Informations-Gesellschaft (mbH), the index for the year 2022 reached a new high at 154.7 points. This was up 17.9 per cent on 2021 and outstripped the previous record high of 8.8 per cent recorded in 2011.

On the occasion of the current FAO publication, the Union zur Förderung von Oel- und Proteinpflanzen e.V. (UFOP) has pointed out that, in terms of figures, food supply per capita of the world's population is covered despite the war in Ukraine, given good harvests of oilseeds, at 0.644 billion tonnes, and grains (including rice), at 2.76 billion tonnes. Nevertheless, the FAO lists 44 countries that rely on foreign food aid. Of these, 33 are in Africa. The UFOP has contended the negative debate on biofuels from cultivated biomass as it does not take account of these contexts. The association has made clear that the question of food security does not arise for Germany and the EU.

The UFOP expects the German Minister of Agriculture, Cem Özdemir, to conduct a proper discussion that also takes into account the fact that approximately 60 per cent of the rapeseed area is dedicated to the production of protein feed and such protein feed does not need to be imported from non-EU countries. The UFOP has expressed its strong support of the BMEL's protein plant strategy, but stressed that such strategy would have to incorporate all protein crops, even if part of the output is used to produce biofuels. This is the ideal combination of adding value and making an appreciable contribution towards climate change mitigation, the association has added. It should be kept in mind that the cultivation of rapeseed, grain and other arable crops is subject to natural or ever-tightening legal restrictions. The UFOP has urged the Federal Minister Özdemir to take a holistic view of these aspects as this would be the only way an arable farming or national biomass strategy would make sense in regard to supply and climate change mitigation.

Referring to the statutory 4.4 per cent cap on biofuels from cultivated biomass, the association has again pointed out the restrictions on the potential use of agricultural feedstock to produce biofuels. The UFOP argues that in view of climate mitigation targets, it is all the more important to utilise the potential of the current area of land under cultivation to create sustainable value. The implementation of the Renewable Energy Directive (RED II), which created the basis for global sustainability requirements for biomass cultivation also in third countries, should also be looked at in this light. Anyone calling for the abolition of biofuels from cultivated biomass should also be honest to admit that this would mean to forego the benefits of shaping an internationally binding regulatory framework for the sustained cultivation of biomass.

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Chart of the week (01 2023)

More soybeans from India

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The USDA sees output and consumption, but also ending stocks and world trade in soybeans, slightly above the previous month's estimate.

In its latest report, the US Department of Agriculture (USDA) expects global soybean production in 2022/23 to reach around 391.2 million tonnes. This is up 0.6 million tonnes on the November 2022 estimate. Nevertheless, the figure translates to an expected increase of 35.6 million tonnes on the previous marketing year. According to Agrarmarkt Informations-Gesellschaft (mbH), the upward revision is based on the raised forecast for India, which is seen to harvest around 12 million tonnes of soybeans in the current season. In November, the USDA had anticipated 11.5 million tonnes. The forecast for Canada was raised marginally 43,000 tonnes to 6.5 million tonnes. In contrast, the USDA held on to previous estimates for key producing countries such as Brazil, the US and Argentina.

Based on a presumably larger global availability of soybeans, the USDA also expects consumption to increase in 2022/23. Soybean processing is estimated at 380.9 million tonnes, up 0.7 million tonnes from the previous month's forecast. In 2021/22, demand was 17.5 million tonnes lower at 363.4 million tonnes.

Consequently, ending stocks are likely to rise 0.5 million tonnes to 102.7 million tonnes compared to the November forecast. This means that global ending stocks would exceed the previous year's volume by 7.1 million tonnes. The increase is primarily based on raised estimates for Brazil to 31.7 million tonnes (+0.5 million tonnes from the November forecast) and the EU to 1.7 million tonnes (+0.3 million tonnes). It can more than offset the decline in Argentine ending stocks of 0.5 million tonnes to 23.5 million tonnes.

The USDA also sees world trade in soybeans higher than the previous month, though only minimally. At presumably 169.4 million tonnes, shipments are up 0.2 million tonnes on the November estimate. This translates to a 15.6 million tonne rise compared to 2021/22.

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Chart of the week (51 2022)

Significantly fewer soybeans from Brazil

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Soybean is the most important oilseed crop imported to the European Union, ahead of rapeseed.  EU-27 imports in the first four and a half months of the running marketing year amounted to just less than 4.9 million tonnes. In the same period of the 2021/22 season, imports were around 900,000 tonnes larger. There were significant shifts in suppliers of both imported and processed soybeans.

Brazil and the US remained the top suppliers. By mid-November, around 1.7 million tonnes of soybeans had come into the EU from Brazil. This was only half the previous year's volume of 3.4 million tonnes. Consequently, the share of Brazilian soybeans in total EU soybean imports dropped 23 percentage points to 36 per cent. The gap was filled by increases in deliveries from the US. More specifically, the US delivered around 2.1 million tonnes in the period 1 July to 11 December 2022, which was up 31 per cent on the same period a year earlier.

Soybean meal is an equally important import commodity for Europe. Its import volume was only slightly smaller than the previous year. At 7.1 tonnes, soybean meal imports were down just less than 19,000 tonnes on the same period last year. Again, there were shifts in suppliers. According to Agrarmarkt Informations-Gesellschaft (mbH), Brazil moved to the top of suppliers, delivering 800,000 tonnes more than in last year's period. At 3.8 million tonnes, Brazil is now ahead of Argentina, which delivered just less than 2.6 million tonnes. This was down 600,000 tonnes year-on-year.

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Record year of oilseed production

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According to current USDA estimates, global output of oilseeds in the crop year 2022/23 is set to hit a peak of around 644.4 million tonnes, which would be up around 7 per cent year-on-year. With that, the current forecast is slightly more cautious than the previous estimate.

Global processing of oilseeds is also set to rise to a record high of 533.4 million tonnes, according to the most recent USDA outlook. This would be up around 21.9 million tonnes on the crop year 2021/22. Global ending stocks will presumably amount to 121.4 million tonnes, which would exceed the previous year's level by 7.1 tonnes. However, ending stocks are seen to be clearly below the 2018/19 season's 134.1 million tonne record high. Also, world trade in oilseeds is expected to record a 20.3 million tonne increase to 198.3 million tonnes.

At 391.2 million tonnes, the current crop year's soybean harvest is expected to be larger than ever. In contrast, global output of sunflowerseed is set to decline 12 per cent on the year to 50.7 million tonnes, whereas world rapeseed production is seen to increase 10.4 million tonnes to 84.3 million tonnes. According to Agrarmarkt Informations-Gesellschaft (mbH), this outlook is based on harvest increases in major rapeseed producing countries, especially Canada. It should be noted that the USDA oilseed estimate also includes peanuts (approximately 50.3 million tonnes) and cottonseed (approximately 42.1 million tonnes), among other oilseeds.

The surge in soybean output is especially due to changes in land use (clearing primeval forest) in South America. According to a report published by the Food and Agriculture Organization of the United Nations (FAO) in 2020, Link), global forest loss in the period 1990 to 2020 extended over an area larger than the EU. In the light of this, the Union zur Förderung von Oel- und Proteinpflanzen e.V. (UFOP) has welcomed the agreement reached on the EU Supply Chain Law at the beginning of December 2022 for deforestation-free sourcing of soybeans and palm oil, among other produce. Providing proof of land use for this produce was not an obligation for obtaining a sustainability certification until 2020, whereas providing such proof for biofuels has been a requirement since 2008.

The UFOP has repeatedly emphasised the model role the Renewable Energy Directive plays with regard to sustainability and documentation requirements, in particular the evidence of reduction in greenhouse gas emission. This also includes the option of using satellite technology. The UFOP has called to mind the "GRAS" project sponsored by the Agency for Renewable Resources (FNR). All the more surprising is the response of some members of the European Parliament who referred to the regulation as a "world first". The association has underlined that these import restrictions have been relevant for the market access of biofuels from cultivated biomass since 2008.

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Extreme dryness diminished yield potential of EU sunflowers

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In the EU-27, the 2022 harvest of sunflowerseed came in considerably lower than 2021 due to extreme dryness. It was also short of the long-term average.

According to the latest EU Commission's estimate, 9.3 million tonnes of sunflowerseed were harvested in the European Union in 2022. This would be around 10 per cent less than in 2021. In other words, both the 2017 bumper crop of 10.4 million tonnes and the long-term average of 10.2 million tonnes were clearly missed. The area planted was expanded around 18 percent to a new record of 5.1 million hectares, but at 19.5 decitonnes per hectare, yields fell nearly 18 per cent short of those reached in 2021. The continued dryness and extreme heat over the summer months led to harvest losses. The genetic yield potential could not take effect.

The Union zur Förderung von Oel- und Proteinpflanzen e. V. (UFOP) nevertheless regards sunflowers as a crop alternative in some regions in order to expand crop rotations and minimise risks. The UFOP recommends that in view of the uncertain supply situation for sunflowerseed and sunflower oil from Ukraine farmers take sunflowers into account when planning their 2023 sowings. The annual variety trials that are funded by the UFOP and conducted in cooperation with the responsible regional authorities confirm the high yield potential of both conventional and high-oleic varieties, also in terms of oil content. These and other findings relating to rapeseed and grain legumes are available as a free download (in German only) at: LINK

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Summer crops with sharp declines in yield

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Yields of both soybeans and sunflowerseed were substandard in Germany in 2022 due to poor growing conditions during the summer months.
UFOP: make arable farming strategy visible

According to preliminary information published by the German Federal Statistical Office, around 159,400 tonnes of sunflowerseed were harvested in Germany in 2022. This was up 59,700 tonnes on the previous year and almost three times the long-standing average. The main reason for the increase was an expansion in area planted. Sunflowers were grown on 85,300 hectares in 2022, more than twice the previous year's area. However, the presumed yield of 18.7 decitonnes per hectare dashed expectations, not only falling 7.4 decitonnes per hectare short of the previous year's yield, but also remaining well below the long-standing average of 22.0 decitonnes per hectare. They key reasons were the drought and heat over the summer months, which diminished the yield potential significantly.

Soybean farming has played an appreciable role in Germany since 2015 and has grown continuously and substantially since then. In 2022, the soybean area increased another 17,200 hectares to 51,400 hectares. But again, yields fell short of the previous year's figure due to the poor growing conditions during the summer. They dropped 6.4 decitonnes per hectare to 24.8 decitonnes per hectare. Nevertheless, based on the substantial expansion in area planted with soybeans, the soybean harvest rose to 127,700 tonnes, which was up around 21,100 tonnes on the previous year's level. Bavaria and Baden-Wuerttemberg remained the most important production regions.

The Union zur Förderung von Oel- und Proteinpflanzen e. V. (UFOP) regards the positive trend in area planted as evidence of arable farmers' fundamental interest in diversifying crop rotations and making them more resilient in view of climate change. Unfortunately, such willingness to change was not rewarded, especially in the case of sunflowers. Some farmers also lacked experience in cultivating this crop. According to the UFOP, agricultural and public consultants are challenged to respond to this situation and take much more account of small-scale crops, such as legumes and also sunflowers, in their consulting practice and cultivation trials. The UFOP believes that there is still room for improvement in developing the German Ministry of Agriculture's arable farming strategy in a holistic manner and make it visible also through the leading farms.

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IGC estimates global 2022/23 rapeseed harvest higher than previous year

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According to recent information published by the International Grains Council (IGC), world rapeseed production will likely exceed the previous year's level by 15 per cent. For the 2022/23 marketing year, the IGC sees consumption and international trade volume at a record level. Global rapeseed stocks are seen to rise considerably at the same time.

The IGC projects a convenient global rapeseed supply of 84.4 million tonnes for the 2022/23 marketing year. For Australia, the Council lowered its forecast marginally by 0.1 million tonnes due to the floods. Nevertheless, this translates to an expected increase of 15 per cent on the previous marketing year. Increased production in Canada, projected at 19.1 million tonnes (+5.3 million tonnes on the previous year), the EU, at 19.6 million tonnes (+2.2 million tonnes), and Russia, at 4.9 million tonnes (+1.9 million tonnes), can more than offset the declines in Australia, to an estimated 6.5 million tonnes (-0.3 million tonnes), and India, to 10.3 million tonnes (-0.2 million tonnes).

Based on the abundant availability, global consumption in 2022/23 will likely amount to around 83 million tonnes, which would be an 11.2 per cent rise year-on-year. Consumption within the EU is estimated at 24.7 million tonnes (+2.3 million tonnes).

The IGC forecasts ending stocks at 5.5 million tonnes, which is up 1.4 million tonnes or 34 per cent on the previous year's volume.

Due to the abundant export opportunities and high price level, international trade in rapeseed will probably reach 18.4 million tonnes in 2022/23, exceeding the previous year's volume by 3.8 million tonnes. China, Japan and Pakistan are seen to remain major destinations. Imports to the EU are expected decrease on the previous year because of the large EU harvest. Ukrainian exports are currently seen at 2.8 million tonnes, exceeding the previous year's level by 0.1 million tonnes despite the continuing conflict. Canadian exports are set to rise considerably compared to the previous year due to the larger harvest.

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Germany key rapeseed oil supplier to the EU

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Shipments of German rapeseed oil declined in the 2021/22 marketing year, following three consecutive years of considerable growth. Exports were not so much to third countries, but more to EU neighbour countries.

At just less than 1.1 million tonnes, Germany exported just about 22 per cent less rapeseed oil in 2021/22 than in the previous season. Nevertheless, exports exceeded the volume of the 2019/20 marketing year by 13 per cent.

The Netherlands, which acts as a central hub for world trade in agricultural commodities, remained the by far largest recipient country of German rapeseed oil in 2021/22. The country took 600,000 tonnes, which was, however, 150,000 tonnes fewer than the previous season. Belgium ranked second, taking 86,500 tonnes, around 17 per cent less than 2020/21. It was followed by France, Denmark and Poland as major destinations. These countries received significantly more rapeseed oil than a year earlier. France purchased around 65,000 tonnes (+18 per cent), remaining an important market. Denmark received around 64,600 tonnes (+12 per cent). Shipments to Poland showed the biggest increase. Reaching 58,000 tonnes, they nearly doubled over the previous year's volume. Switzerland, Austria, Lithuania, Greece and the Czech Republic also received considerably more than in 2020/21, whereas deliveries to Italy, Portugal and Ireland declined.

The Union zur Förderung von Oel- und Proteinpflanzen e.V. (UFOP) has ascribed the decrease in rapeseed oil exports to the growth in demand for domestic biodiesel processing. The association expects that this development will continue in the 2022/23 marketing year, because palm oil-based biofuels can no longer be counted towards GHG quota obligations from 2023 onwards. German and European farming of rapeseed is gaining more and more importance for supplying the German and European biofuels industry for biodiesel or hydrogenated vegetable oil (HVO) production. For this reason, the UFOP expects the rapeseed area in the EU-27 to stabilise at the current level of approximately 5.8 million hectares. Due to the winter months ahead, rapeseed oil-based biodiesel is increasingly used in the northern EU countries. This genetic edge provided by the fatty acid composition of rapeseed oil ensures a sales potential that could only be avoided during this period using hydrotreated vegetable oil (HVO), which is more expensive than rapeseed methyl ester (RME).

Referring to the shaky supply situation for 2023 due to the war and as a consequence of the challenges caused by climate change, the UFOP has recommended that farmers boost sunflowerseed production by concluding appropriate forward contracts for 2023 sowings. The association has pointed out that, along with rapeseed potential, there is additional land and feedstock potential that can be exploited to improve biodiversity and expand regional crop rotations.
 

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Diesel fuel consumption reached three-year high

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The use of diesel fuel reached its highest level since October 2019 at 3.1 million tonnes in August.
 
In August 2022, 212,960 tonnes of biodiesel were used for blending, which was up 6.1 per cent on the previous month. Since at the same time, consumption of diesel rose 8.8 per cent to 3.1 million tonnes, hitting a three-year high, the incorporation rate declined 0.2 percentage points to 6.4 per cent. This was the lowest incorporation rate since the beginning of the year. In other words, total consumption of diesel and biodiesel in August amounted to just over 3.3 million tonnes, which was 3.7 per cent more than in August 2021. Biodiesel consumption in the running year totalled just over 1.6 million tonnes. The January to August 2022 incorporation rate averaged 7.2 per cent. This compares to 7.4 per cent in the year-ago period.
 
The Union zur Förderung von Oel- und Proteinpflanzen (UFOP) has pointed out that the standard for diesel fuel, DIN EN 590, places a cap on the percentage of biodiesel at 7 per cent by volume. The blending percentage exceeding this limit is hydrotreated vegetable oil (HVO). The association has contended that these volumes are still not listed by the Federal Office for Economic Affairs and Export (BAFA). UFOP estimates biodiesel/HVO demand in the 2022 calender year to be slightly lower than in 2021, when the amount used was 2.53 million tonnes. The trend is towards a decline in demand for diesel and energy as a consequence of increasing e-mobility and the advancing energy efficiency associated with this type of powertrain.
 
In view of the current debate on the German government coalition's Immediate Climate Action Programme and criticism from the government's Expert Council on Climate Issues, the UFOP has emphasised that in 2030, the target year set out in the German Climate Change Act, more than 35 million vehicles will still be powered by combustion engines in Germany. The association is convinced that in order to meet the GHG quota obligation and emission requirements for traffic, the world needs any and all options without giving preference to any specific technology and that such options would include certified sustainable greenhouse gas-efficient biofuels from cultivated biomass, residues and wastes. Looking at products that do not need to meet requirements of the same standard, the UFOP has pointed out that proof of sustainability should be the "permit" to access the market and being granted credits towards the cap on GHG emissions.
 

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Global vegetable oil production set to hit another record high

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Global output of vegetable oils is set to increase to new record highs in the 2022/23 crop year. Production of both rapeseed and soybean oil as well as palm and sunflower oil will rise.
 
According to the latest outlook published by the US Department of Agriculture (USDA), 2022/23 global production of vegetable oils will amount to 219.8 million tonnes. This would be an 8.3 million tonne rise compared to 2021/22. In other words, production will presumably fully cover demand of 213.6 million tonnes also in the current crop year.
 
According to investigations conducted by Agrarmarkt Informations-Gesellschaft (mbH), palm oil is set to remain the world's most important vegetable oil in terms of production and consumption, with global output estimated at 79.2 million tonnes. This translates to a 3.2 million tonne increase over 2021/22. In other words, palm oil accounts for just over 36 per cent of global vegetable oil production. Indonesia remains the largest palm oil producer with an output of 46.5 million tonnes, followed by Malaysia with 19.8 million tonnes and Thailand with just less than 3.3 million tonnes.
 
Production of soybean oil is expected to grow 4.2 per cent to 61.9 million tonnes and could hit a new record. China remains the most important producer with production amounting to 17.2 million tonnes, whereas the USA ranks second with just under 11.9 million tonnes. Production of rapeseed oil is seen to amount to 31.5 million tonnes, around 8.5 per cent more than the previous crop year due to unexpectedly abundant yields and high oil contents.
 
Production of sunflower oil will probably expand around 1 percent to 20.1 million tonnes in 2022/23, although global supply of sunflowerseed is clearly short of the previous year's figure despite an expansion the area planted. The Union zur Förderung von Oel- und Proteinpflanzen e. V. (UFOP) has pointed out that farmers in Germany also expanded their sunflower areas in 2022 because of persistently high prices for sunflower oil. Although not all yield expectations were fulfilled due to the extreme heat, the German sunflower hectarage for the 2023 harvest is expected to remain stable.
 

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IGC: more sunflowerseed from America

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Whereas poor growing conditions in the EU-27 limited yields, the US and Argentina in particular are expected to bring in a significantly larger sunflowerseed harvest.
 
According to information published by the International Grains Council (IGC), around 52.1 million tonnes of sunflowerseed will likely be produced globally in the 2022/23 crop year. This would be 700,000 tonnes more than forecast in September, but nevertheless 7.9 per cent short of the previous year's volume. Whereas Russia is seen to produce 6.5 per cent more sunflowerseed than 2021/22, Ukraine's supply will probably shrink by one third due to the continuing war and decline in sunflower area. Just less than half the Ukrainian area was reportedly harvested by 14 October 2022. However, rain has recently delayed harvest operations and exacerbated concerns about a considerable drop in quality.
 
Despite an expansion in area, EU production, at 9.5 million tonnes, is also expected to fall around 8.9 per cent short of the previous year's output as poor growing conditions over the summer months reduced the yield potential significantly. By contrast, the IGC is optimistic about sunflowerseed supply in North and South America. In view of an increased sunflower area, US production is seen to reach 1.3 million tonnes, which would be up 45 per cent on the previous year's level. The same applies to Argentina, with a likely rise of around 8.7 per cent to a record amount of 4.4 million tonnes.
 

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Canada's rapeseed harvest not yet back to old size

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The 2022 Canadian crop far exceeds the previous year's volume, which was reduced by drought, but nevertheless remains smaller than average.
 
Following the past drought year in 2021 and record low Canadian canola production, the International Grains Council (IGC) is positive about Canadian rapeseed supply in 2022. Although the area planted with rapeseed was scaled back 4 per cent to 8.7 million hectares, the harvest will probably be significantly larger. The main factor is higher yields due to significantly better growing conditions for the field crops compared to the same period a year earlier. At 22.3 decitonnes per hectare, the forecast average yield is 44.8 per cent higher than the previous year. According to investigations conducted by Agrarmarkt Informations-Gesellschaft (mbH), based on this forecast the rapeseed crop is likely to reach 19.1 million tonnes, which compares to only 13.8 million tonnes in the drought-stricken previous year. Nevertheless, rapeseed production in 2022 will probably fall 0.4 million tonnes and 0.5 million tonnes short of 2020 and 2019 respectively.

Based on a domestic rapeseed consumption of 10.5 million tonnes, around 1.1 million tonnes more than the past crop year, there will be a surplus of 8.6 million tonnes. Nevertheless, in view of low beginning stocks, supplies - at 900,000 tonnes - will likely fall short of the previous year's volume of 1.7 million tonnes. AMI believes that due to larger Canadian production, rapeseed exports will presumably rise significantly to around 8.5 million tonnes. This would translate to a 60.3 per cent rise year-on-year. Domestic consumption could also increase. Forecast at 10 million tonnes, it would exceed the previous year's volume by 16.3 per cent.

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EU rapeseed imports up 40 per cent on previous year

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Year-to-date EU-27 rapeseed imports significantly exceed year-earlier levels – despite a considerably larger EU rapeseed harvest than the previous year.
 
The EU-27 imported just less than 1.7 million tonnes of rapeseed in the first 14 weeks of the 2022/23 season. This translates to a full 40 per cent rise over past marketing year. Compared to the 2020/21 season, the volume is slightly smaller by around 1.5 per cent. Naturally, the main reason for the fluctuations in import volumes is availability in the world market, along with European rapeseed supply. According to investigations conducted by Agrarmarkt Informations-Gesellschaft (mbH), the European rapeseed crop will presumably amount to 18.8 million tonnes in the current marketing year. This is up just less than 11 per cent year-on-year. However, total demand from oil mills in the EU amounts to around 23.3 million tonnes. For this reason, the EU Commission estimates the need for imports from third countries at 4.5 million tonnes, which would be 1.1 million tonnes fewer than 2021/22.
 
In view of import demand, significant changes in trade flows can be expected. As in previous years, Ukraine was the primary supplier. According to information published by AMI, imports increased 40 per cent despite the continued war. At the same time, imports from Australia increased significantly in the third quarter and in fact doubled on the same period a year earlier. Following sharp yield losses in the previous drought year, Canada also re-gained importance with deliveries rising around 25 per cent. By contrast, imports from Moldova and Serbia declined 29 per cent and 57 per cent respectively, though at a low quantitative level.
 

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International Grains Council (IGC) has lowered soybean forecast, but nevertheless sees ending stocks to rise

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The International Grains Council (IGC) has estimated global supply of soybeans to be lower, but still at a record level. Although demand for soybeans continues to grow all round the world compared to the previous year, supplies are seen to grow even stronger than previously expected.
 
In its latest report, the International Grains Council (IGC) adjusted its estimate of global soy supply 2022/23 downwards 2 million tonnes to 387 million tonnes. Nevertheless, supply in the current crop year is likely to reach a record high, surpassing the previous year's level by just less than 10 per cent.
 
The main reason for the adjustment was lower US crop expectations. US soybean production is projected at around 119.2 million tonnes, 4.1 million tonnes lower than previous expectations. Poor growing conditions have recently reduced the yield potential considerably. Moreover, the US area planted with soybeans will probably be smaller than forecast in August. The recent rainfall in some regions, however, is seen to be potentially favourable for late-season crops. By contrast, the estimate for Brazilian soy supply was raised to 146 million tonnes, up around 1 million tonnes from the previous month's forecast. The increase is mainly based on a presumably 3 per cent expansion in area. Ukraine is also expected to harvest more soybeans this year – 3.6 million tonnes, which would be up 0.7 million tonnes.
 
Global soybean consumption is currently estimated at 378 million tonnes. This is down 1 million tonnes on the August outlook, but 4.3 per cent higher than 2021/22. Demand is expected to see a sharp increase, especially in China, but equally in Bangladesh and Pakistan.
 
In view of the bumper soybean crop, 2022/23 ending stocks are also likely to grow. According to investigations conducted by Agrarmarkt Informations-Gesellschaft (mbH), in purely arithmetic terms, this would result in a global soybean surplus of 9 million tonnes. Along with beginning stocks, 2022/23 ending stocks will increase to around 53 million tonnes, which is 1 million tonnes more than forecast in August. This translates to a 19.3 per cent rise on the previous year's figure. Ending stocks of the key exporters are expected to increase 19.5 per cent year-on-year. US soybean stocks are assumed to shrink the fourth season running, dropping to 4.6 million tonnes, the lowest level in 13 years.
 

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German biodiesel exports at a high level

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Foreign trade in biodiesel is poised to increase in 2022. In the first half year, exports climbed 27 per cent and imports as much as 75 per cent.
 
According to figures published by the German Federal Statistical Office, Germany exported around 1.3 million tonnes of biodiesel in the first half year of 2022. By contrast, imports amounted to 755,539 tonnes. The Netherlands, the principal EU marketplace for biodiesel, continued to be the primary trading partner, accounting for 40 per cent and 48 per cent of total exports and imports respectively. Imports more than doubled after having declined considerably in the previous year. According to investigations conducted by Agrarmarkt Informations-Gesellschaft (mbH), larger shipments also came from Belgium, Malaysia and Poland. Whereas imports from Belgium also more than doubled, imports coming directly from Malaysia decreased around 17 per cent.

The main recipient countries of German biodiesel also were EU countries (76 per cent), headed by the Netherlands, Belgium and Poland. The most important non-EU country was the USA. The country took fourth place in the first half of 2022, partly because imports increased 28 per cent year-on-year to just below 91,000 tonnes.
 
In view of the trade surplus, the Union zur Förderung von Oel- und Proteinpflanzen (UFOP) e. V. has pointed out that along with the volumes of biodiesel, potential for climate change mitigation in the transport sector is also exported. The fruit couldn't be hanging any lower to use it to close the gap recently identified by the Federal Government's Climate Council. The fact that even the Federal Ministry for the Environment is unable to propose immediately effective measures underlines that there is no alternative to biofuels, especially those that are physically available. The speed limit is far from sufficient. The electrification of transport as a consequence of e-mobility and thermal pump funding would only shift greenhouse gases emissions to the power sector, especially because more coal-fired power plants would have to be recommissioned to secure supply. The UFOP has underlined that in the end, climate protection would be the loser.

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EU legume harvest to be standard

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EU output of legumes from the 2022 crop is expected to exceed the previous year's figure by 4 per cent but remains in line with the average of recent years. Field peas and field beans are set to see the biggest increase.
 
The EU Commission has estimated the EU harvest of legumes at just less than 6.2 million tonnes in 2022. This would be up 4 per cent year-on-year but remain short of the 6.9 million tonne record harvest of 2017. Above all, the harvests of field peas and field beans, at 2.1 and 1.3 million tonnes respectively, are each seen to grow 13 per cent over the previous year. According to Agrarmarkt Informations-Gesellschaft (mbH), the increase is due to both the expansion in area planted and a presumed growth in yields.
 
The most important legume crop in the EU-27 remains soybean, which accounts for a slightly lower share of 42 per cent of the legume crop. Farmers are likely to harvest around 2.6 million tonnes in 2022, approximately 2 per cent less than the previous year. Nevertheless, the long-term average will presumably be missed by 4 per cent despite an expansion in area planted with soybeans, because heat and drought have significantly reduced yield potential. The biggest decline is expected for sweet lupins. At 264,000 tonnes, the harvest is seen to fall 18 per cent short of the previous year's level. Again, the decrease is mainly due to an expected significant drop in yields.
 
The UFOP has emphasised that the production area and output of grain legumes are basically on an upward trend. This growth in legume crops underlines farmers' interest in opening up new markets and making crop rotation systems more resilient and less risky in view of climate change. The UFOP has called on the German Minister of Agriculture, Cem Özdemir, to make the accompanying and incentive measures sufficiently attractive to support this positive development. According to the association, the toolbox is in place and all that is needed is a forward-looking bold approach. The UFOP has renewed its call for an adequate premium scheme in the first and second pillar of grain legume production in varied crop rotation systems, as well as demanding adequate funding of the protein crop strategy of the German Federal Ministry of Food and Agriculture (BMEL). Both schemes are important "guidelines" for a future arable farming strategy that deserves the name and is also appreciated by consumers.


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Oilseed meal prices continued at high levels

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Whereas demand for spot rapeseed meal was only sporadic, interest in longer-term futures was clearly stronger.
 
Supply on the rapeseed meal market was more than adequate due to the abundant rapeseed harvest. However, such supply contrasted with dwindling demand, especially for nearby positions. By contrast, deliveries from November 2022 onwards attracted greater buying interest and were valued higher than September deliveries. August 2022 wholesale prices were consistently stronger and not only up, on average, 10 per cent on the previous month, but also 37 per cent higher than August 2021 prices. At the beginning of September 2022, spot commodity weakened. Agrarmarkt Informations-Gesellschaft (mbH) reported an average price of EUR 325 per tonne ex mill on 8 September 2022. By contrast, rapeseed meal rose on further forward positions, which were valued at EUR 341 per tonne.
 
Prices for soybean meal also climbed significantly in August. On the one hand, they received support from unfavourable growing conditions in the US, the most important supplier on the world market. On the other hand, they were driven by rising energy costs and the resulting rising logistics costs in combination tow limited cargo space. Soybean meal containing 48 per cent crude protein was priced at on average EUR 585 per tonne fob mill in August 2022. This was up 3.1 per cent on the previous month's average and up as much as 45 per cent on the year-earlier level. Spot prices in Germany dropped as stock exchange prices for soybeans tumbled at the beginning of September 2022 due to raised US crop forecasts.
 

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More biodiesel consumed in the first half of 2022

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In the first half of 2022, the use of biodiesel and hydrotreated vegetable oil for blending amounted to around 1.23 million tonnes. This translates to a 6.3 per cent rise on the same period 2021.
 
According to investigations conducted by Agrarmarkt Informations-Gesellschaft (mbH), demand for diesel increased 1.6 per cent to 15.15 million tonnes in this period. The average biodiesel/HVO incorporation rate between January and June 2022 was 7.5 per cent. The use of bioethanol amounted to 573,520 tonnes and thus exceeded the previous year's volume by just about 12 per cent. During the same period, consumption of petrol (E 5 / E 10) increased a good 7 per cent.
 
In June 2022, consumption of biodiesel declined 5 per cent on the previous month to 195,000 tonnes. This translates to a sharp decline of 8.7 per cent in the year-on-year comparison. The consumption of diesel reached 2.7 million tonnes in June 2022. This was up 14 per cent on the previous month, but nevertheless fell 6 per cent short of the previous year's volume. As a result, the incorporation rate dipped significantly to 6.7 per cent, a level below the half-year average and clearly below the rate of 8 per cent recorded in June 2021. The use of bioethanol continued to decline in June 2022. At 90,910 tonnes, consumption was down 3.4 per cent on the previous month. The use of bioethanol in blends decreased 5.6 per cent, but remained 2.8 per cent above the level seen in June 2021. On the other hand, the use in ETBE rose 18.3 per cent on the previous month. Nevertheless, it fell 31 per cent short of the previous year's volume.
 
The UFOP has pegged total sales of biodiesel and HVO at approximately 2.5 million tonnes in 2022. This corresponds to approximately 55 per cent of previous diesel fuel imports from Russia of approximately 4.5 million tonnes. The association expects demand for rapeseed oil-based biodiesel/HVO to increase in the fourth quarter, which would have a stabilising effect on prices. In the northern EU countries, rapeseed oil methyl ester is added to diesel in the winter half year to meet quality requirements for winter fuel. Also, from the beginning of 2023, palm oil-based biofuels (biodiesel/HVO) will no longer be credited towards GHG-quota obligations in Germany. Other member states, such as France, Sweden, Portugal, Belgium and the Netherlands, have also excluded palm oil from being counted towards quota obligations. This gap in demand will have to be closed with rapeseed oil, among other biofuel feedstock.
 

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Chart of the week (35 2022)

Brazilian soybean crop set to hit record level in 2023

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In view of the expansion in production area and positive harvest outlooks, Brazilian exports are likely to exceed the previous year's level significantly.
 
The USDA Foreign Agricultural Service (FAS) estimates the soybean production area for the 2022/23 crop year at 42.5 million hectares. This translates to a presumed increase of 1.6 million hectares on the previous year. In other words, the five-year growth rate of 1.2 million hectares will probably be exceeded by 400,000 hectares. According to the FAS, the regions bordering the virgin forests in the north and northeast of the country are particularly affected by the strong expansion in soybean area. Alongside expectations of buoyant world demand, the favourable exchange rate of the Brazilian real to the US dollar and the improved infrastructure as a consequence of new and enhanced roads and ports provide an incentive for farmers to expand their soybean areas, including on degraded pastures.
 
According to investigations conducted by Agrarmarkt Informations-Gesellschaft (mbH), based on an expected yield of 33.9 decitonnes per hectare, the soybean crop is set to reach a record volume of around 144 million tonnes, 17.4 million tonnes more than in 2021/22. The FAS raised its previous forecast after Brazil successfully secured sufficient amounts of phosphate fertiliser through extensive imports in the past few months. Brazil sources approximately 85 per cent of its fertiliser requirements from Russia and Belarus. Russia's invasion in Ukraine at the beginning of the year fuelled concerns over tight supply. In the first five months of 2022, however, Brazil raised its fertilizer imports 16.5 per cent on the same period in 2021. More specifically, imports between January and May 2022 amounted to 16.6 million tonnes, compared with only 14.2 million tonnes in the same period a year earlier.
 

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Chart of the week (34 2022)

Global rapeseed harvest to reach new record high

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With Russia and Australia anticipated to see a larger harvest, global 2022/23 rapeseed production will likely hit a new record. The USDA expects world rapeseed output to rise to a new record level of 82.5 million tonnes.
 
This would be up 2.2 million tonnes from the July estimate and up 14 percent over 2021/22. Above all, the rapeseed harvest estimate for Russia was raised. Russia's output is seen to hit a record at 3.9 million tonnes, which is up 1.1 million tonnes from the July forecast. The increase is mainly based on an expansion in area. The Australian rapeseed harvest will probably also be around 700,000 tonnes larger than previously expected, with 6.1 million tonnes currently forecast. Favourable growing conditions raised the yield potential and caused the USDA to make the adjustment. In the EU-27, the rapeseed harvest is likely to reach around 18 million tonnes, around 100,000 tonnes more than forecast in July.
 
With global consumption anticipated to amount to 79.2 million tonnes – 830,000 tonnes more than expected in July and 5.1 million tonnes more than in the previous season – there will be a 3.3 million tonne surplus for the first time in three years. For Russia and China, the USDA expects larger demand than previously forecast.
Given the presumably larger rapeseed production, global 2022/23 ending stocks are likely to increase significantly. At 6.8 million tonnes, the USDA not only sees stocks just less than 900,000 tonnes higher than in the previous month's estimate, but also up 47.5 per cent from the previous year's figure. These would be the largest ending stocks in three years.
 
The UFOP considers the estimated volume adequate to cover demand for all food and feed uses as well as biofuel production. German oil mills process approximately 10 million tonnes of rapeseed into 4 million tonnes of rapeseed oil per year.  The UFOP has pointed out that the current challenge is to secure the supply chain to ensure the commodity can be processed on time. The association is watching the low water levels in rivers with concern, and also the shift of transport to rail, which is increasingly reaching the limit of capacity. In view of the priority regulation the Federal Ministry for Economic Affairs and the Federal Ministry for Transport are currently coordinating, the UFOP has drawn attention to the fact that transporting rapeseed also means transporting an energy source that is already used for multiple energy applications. The association takes the view that in any case, in the face of climate change, the control of River Rhine water levels requires new concepts that are strictly future-oriented.

 

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Chart of the week (33 2022)

EU trade in oilseeds and by-products, July 2022 and 2021 compared

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According to information published by the EU Commission, foreign trade in rapeseed and sunflowerseed has changed, but less so than expected. The changes were triggered by the severe curtailment of the export potential of Ukraine, the primary supplier of oilseeds, oilseed meal and especially sunflower oil. As current information shows, volumes coming from Ukraine were larger than projected. In other words, there can be no talk of a general slump in shipments.

In July 2022, the EU-27 imported around 491,443 tonnes of rapeseed, whereas in the same month the previous year, only 286,826 tonnes came form third countries. Australia accounted for the largest share – around 78 per cent, or 381,164 tonnes. Ukraine followed in second place with 10 per cent, or just less than 50,000 tonnes, thus reducing its market share marginally by 2 percentage points over July 2021.

An exceptional rise was recorded for deliveries of sunflowerseed. Whereas in July 2021 the amount of EU-27 sunflowerseed imports was around 13,827 tonnes, it was up to around 259,895 tonnes in July 2022, 18 times the amount. Ukraine was the most important supplier with a market share of 93 per cent, followed by Moldova with 4 per cent. By contrast, European imports of sunflower oil saw a decline. According to latest information, the Union received around 126,033 tonnes in July 2022, down from 136,733 tonnes in July 2021. However, although imports fell short of the previous year's volume, the cut was nevertheless smaller than originally feared.

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Chart of the week (32 2022)

Increase in EU sunflower area neutralised by poor yields

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The war in Ukraine and the associated shortage of sunflower oil motivated many farmers in the European Union to sow more sunflowers in the spring of 2022. However, the initially positive harvest prospects cannot be sustained due to the dryness in many parts of Europe.

The continuing drought in Europe, especially in the eastern and south-eastern regions, prompted the EU Commission to drastically lower the harvest estimate for sunflowerseed. At the end of July, Brussels anticipated a volume of 10.5 million tonnes, 636,600 tonnes less than the previous month. This would be only 200,000 tonnes, or 1 per cent, more than in 2021.

Based on the estimated expansion in area to just less than 4.8 million hectares – which translates to an around 10 per cent rise on the year – crop expectations were very optimistic at first. The EU Commission assumed average yields to be at the previous year's level of 23.8 decitonnes per hectare. However, the absence of rain and persisting drought in many parts of Europe have dashed these expectations. The EU Commission is currently expecting yields in the amount of only 21.8 decitonnes per hectare.

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Chart of the week (31 2022)

Unexpectedly good rapeseed harvest put pressure on prices

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Due to increasing supply from the running harvest, spot prices came under growing seasonal pressure. In some regions, yields for wheat and rapeseed were surprisingly good, steadying the downward slide of producer prices. At the same time, low water surcharges and rail transport made delivery to the oil mills more expensive.
 
Uncertainties about Ukraine's shipping potential, the "weather market" in North America and the ongoing harvests in Europe led to strong fluctuations at the futures exchanges. According to Agrarmarkt Informations-Gesellschaft (mbH), the unexpectedly good rapeseed output provided scope for downward movements in price. After market participants had anticipated sharp declines in yield due to the continuing drought and heat, achieved yields have previously been a positive surprise. For example, according to the latest figures, French farmers harvested between 30 and 55 decitonnes of rapeseed per hectare from their fields. As a result, market participants were cautiously positive about rapeseed supply in the current crop year. In Germany, the rapeseed harvest was also progressing. In some locations, it was already complete. Yields were good to very good at 35 to 45 decitonnes per hectare with up to 5.5 per cent moisture content. According to initial reports, the oil contents are between 43 and 45 per cent, which is also more than satisfactory. In some regions, harvest operations were occasionally interrupted by rain and storms, but were quickly resumed afterwards.
 
In contrast, demand was very low as processors were stocked up well via contracts. In other words, the prices shown do not reflect producers' actual selling or contract prices. However, some effort is currently needed to avoid supply gaps caused by limited freight options. Low water levels have made river transport to the inland ports much more difficult. Cargo space has been scarce and expensive, especially as high energy prices are driving transport costs anyway.
 
Producer prices were lowered once again in Germany in calendar week 30. They averaged EUR 610.50 per tonne, which was down EUR 39.20 per tonne week on week. Prices reported by the individual German states ranged from EUR 555 to EUR 675 per tonne.

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Chart of the week (30 2022)

German rapeseed meal exports in steep decline

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German rapeseed meal exports fell 22 per cent short of the previous year's record volume. Main buyers, such as the Netherlands, Spain and France, imported considerably less, whereas Denmark, Finland and Switzerland ordered more.
 
According to information published by the German Federal Statistical Office, Germany exported a total of just over 1.5 million tonnes of rapeseed meal from July 2021 to May 2022. This was down 22 per cent on the same period a year earlier. It was also the smallest volume in three years. On the one hand, the decline was due to lower availability. Production at German oil mills dropped 5.5 per cent to 4.8 million tonnes in the above-mentioned period, which limited the country's export potential. On the other hand, the comparatively strong market prices curbed buying interest from abroad. From October 2021 to May 2022, protein in rapeseed meal was higher priced than, or at the same level as, protein in GMO-free soybean meal. In countries where GMO-free feedstuff is not a major concern, buyers therefore went for soybean meal rather than the alternative.
 
Most German rapeseed meal was delivered to the EU member states (around 1.45 of the 1.55 million tonnes). The largest share, 660,000 tonnes, went to the Netherlands. This means that the volume decreased almost one third compared to the same period a year earlier. Rapeseed meal deliveries to France slumped almost two thirds and exports to Spain plummeted 56 per cent. Due to larger domestic rapeseed harvests, both countries had less demand for rapeseed meal deliveries from abroad.
 
By contrast, according to investigations conducted by Agrarmarkt Informations-Gesellschaft (mbH), supplies to Denmark, Finland and Austria saw significant increases. Denmark, the second largest trading partner in the rapeseed meal business, nearly doubled its imports from Germany to 193.000 tonnes. Switzerland was once more the most important recipient outside the European Community, boosting its imports as much as 82 per cent to 70.000 tonnes.
 
The Union zur Förderung von Oel- und Proteinpflanzen (UFOP) has stated that the fact that German oil mills have a processing capacity of approximately 9 million tonnes of rapeseed means that Germany is the EU-27's most important processor and supplier of GM-free rapeseed meal.
 
The association has pointed out that supply of this domestic feedstuff, which is firmly established in dairy cow feeding, is at risk if the Federal Ministry for the Environment implements plans to sharply lower the upper limit for biofuels from cultivated biomass and/or ban their being credited toward climate change commitments in the future. The UFOP has emphasised that only in combination with rapeseed processing to make biodiesel will supply of domestic feed protein be secured in the future.

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Chart of the week (29 2022)

Australia is the EU's primary rapeseed supplier in 2021/22

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At 5.3 million tonnes, EU-27 rapeseed imports from non-EU countries fell just less than 500,000 tonnes short of the previous year's volume. Canada, the main supplier, lost much of its importance due to a small harvest. By contrast, Australia increased its market share considerably. However, the rise was not big enough to offset the decline in deliveries from Ukraine.
 
Although the EU rapeseed harvest was somewhat larger in 2021 than 2020, total supply in the EU-27 in the 2021/22 marketing year – estimated at 22.8 million tonnes – was around 1.2 tonnes smaller than that in the 2020/21 marketing year. The drop was due to lower beginning stocks. Demand from oil mills was initially covered by EU production. However, starting in the first half of the marketing year, the rapeseed volumes required to utilise the mills to their full capacity increasingly had to be imported from Australia, Ukraine and Canada.
 
According to investigations conducted by Agrarmarkt Informations-Gesellschaft (mbH), Canada's 2021/22 shipments of 611,300 tonnes were down around 71 per cent on 2020/21 due to the smaller supply that resulted from the drop in rapeseed harvested. This means that the share of Canadian origins in total imports dropped from 32 per cent in 2020/21 to merely 11 per cent, whereas deliveries from Australia surged 45 per cent to 2.9 million tonnes. In other words, the share of Australian commodity in total imports increased 19 percentage points to 53 per cent.
 
Another reason for the strong increase in Australian shipments was the Russian invasion in Ukraine at the end of February. Until the war started, the European Union imported around 1.6 million tonnes of rapeseed from Ukraine each year and Ukraine's share in EU imports amounted to just less than 50 per cent. In view of blockaded ports, however, exports from the Black Sea region stopped in the weeks that followed. As a result, Australia became more and more important as a supplier, and producer prices soared to record levels. Only small volumes of rapeseed left Ukraine also in the months that followed. In the 2021/22 marketing year, Ukrainian deliveries totalled just less than 1.7 million tonnes. This compares to 2 million tonnes a year earlier.

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