Good soybean supply – rapeseed slightly scarcer

In Germany, UFOP reports that the stock-to-use ratios for soybean and sunflower seed have improved due to larger crops globally; rapeseed has gone down slightly. The stock-to-use ratio for rapeseed and sunflower seed has been in decline for years now.

The picture is somewhat different for soybeans. Bumper crops are causing supply and stocks to rise strongly. However, there is also a steady growth in demand for soy protein for animal feed, especially in China. Due to the positive development of the economy and income in the world’s most populous country, purchasing power is increasing and so is demand for meat and, consequently, oilseed meals to feed the growing numbers of livestock. China’s growth in demand for soy coincides with bumper crops in the US and Brazil in 2018/19. This correlation generates dynamic changes in price.

However, the dynamics are weakened given the good supply to the market. The Union for the Promotion of Oil and Protein Plants (UFOP) has found that not even the debate about the shift of soybean imports from South America in the wake of the trade conflict between China and the US has led to a lasting upward trend in prices. This again confirms just how sound supply to the market is. It also highlights the flexibility of European oil mills that switch from rapeseed to soybean processing. In this sense, the feedstocks are interchangeable at will, with the exception of those with the unique selling point of “without GM”. Although this situation ensures that feedstock is utilised locally, consumers need to drive local use by purchasing locally, UFOP has underlined.

In the important fuel sector, the question is if biodiesel producers are aware of the responsibility they have, UFOP has warned in view of the ongoing debate between the EU Commission and EU member states on banning palm oil in European biodiesel production.