Biodiesel Drives European Vegoil Market

WASHINGTON - Jun 13/06 - SNS -- Europe's headlong dive into biodiesel has resulted in a situation where domestic demand exceeds domestic production, even the past two record rapeseed harvests, asserts the U.S. agricultural attache for the region.

"The demand for rapeseed, which is the most important oilseed in the EU, has encouraged expansion of rapeseed area. This increase, together with favorable weather conditions, has lead to record rapeseed harvests over the last two years. However, despite these record harvests, demand for rapeseed has exceeded production leading to increased rapeseed imports and declining exports.

"Because of continued low crush margins for soybeans relative to rapeseed, more and more crushers are turning from soybeans to multi-seed or rapeseed crushing. However there is a difference between Northern and Southern Europe," the agricultural attache said.

"In Northern Europe where rapeseed is grown, there is an increased focus on rapeseed crush and consumption. In Southern Europe, mainly Italy, Spain and Portugal, an increase in soybean use is expected. This increase reflects a growing interest in soy-based biodiesel in this region and plans for expanding crushing and processing facilities."

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