European Oilseed Area Expanding
WASHINGTON - Apr 13/16 - SNS -- Farmers in the European Union are expected to plant 1.6% more oilseeds this year, lifting area to a forecast 12 million hectares, according to a report from U.S. agricultural attaches for the region.
Gains are expected in tall three major oilseeds grown on the continent -- rapeseed, sunflower and soybeans. If yields return to average, production could reach 33.4 million metric tons (MT).
In 2016-17, the forecast for planted area of EU rapeseed is 2% higher and reaching 6.6 million hectares compared to the previous year. The higher acreage is mainly due to increases in Romania, Lithuania, Latvia and the Czech Republic and to a lesser extent in Estonia and Denmark. Increased rapeseed area in the Baltic countries is driven by the demand for the biofuels industry. Following a decline in area and yields per hectare due to drought in 2015-16, sunflower plantings and yields are expected to grow again in 2016-17.
Sunflower area is expected to grow by 1.7% and reach 4.25 million hectares with a forecasted crop totaling at 8.35 million MT (plus 9.2%). Growth is expected in the major producing countries Spain, Romania and Bulgaria, which will exceed slight declines in France, Hungary and especially Italy.
Increased sunflower plantings are motivated by better profit margins, resilience to heat and drought, more favorable crush margins and the opportunity for premiums on specialty types of sunflower such as high oleic, linoleic and confectionary sunflower. Areas for specialty sunflower types are reported to grow in France, Romania and Bulgaria.
Still at a relatively low level production, soybean keeps increasing in 2016-17 but at a slower pace than in 2015-16. The drivers for the growth in European soybean production are EU policy incentives. Rising area is expected in France, Romania, Hungary, Austria, Slovakia and the Czech Republic, while a decline in Italy and Bulgaria is expected.
Total soybean area for 2016-17 is forecast at 835 thousand hectares (plus 4.8% year-on-year) with a total production of 2.25 million MT increasing by 2.7% compared to the previous MY. Despite increased production of EU oilseeds EU total crush is expected to be somewhat down in 2016-17 by 0.14%. Only sunflower crush is forecast to increase due to increased supply and improved crush margins for sunflower. Increased sunflower crush is more than offset by lower soybean and rapeseed crush.
Consumption and Trade
The EU is highly dependent on imports of oilseeds and oilseeds products (protein meals and vegetable oils) to meet demand for food, feed and industrial uses, including biofuels production. This is especially true for oilseeds with no or limited domestic production, such as soybeans, soybean products and palm oil.
Some 65% of soybean meal and almost 50% of sunflower meal must be imported. Only the production of rapeseed meal is on an average equal or somewhat higher than the domestic demand.
Total EU oilseeds meal consumption in 2016-17 is estimated to be up by 0.4% year-on-year reaching 54.1 million MT. Particularly the growing EU poultry sector is driving higher demand for protein feed. Ample world supplies of soybeans and soybean meal are expected to favor the use of soybean products in 2016-17 at the expense of rapeseed meal. Use of sunflower meal is expected to also increase due to higher domestic supply.
Total use of vegetable oils is forecast to decrease by about 0.8% to 25.0 million MT which is mainly due to decreased industrial use but increasing food use. The production of biofuels is the second largest use of vegetable oils after food use in the EU. Since more and more vegetable oils are being replaced by waste fats and oils, the use of vegetable oils for biofuels production is declining. Most EU biodiesel production uses rapeseed oil as the main feedstock.
EU-28 Oilseeds Annual 2016 3 Policy The 'greening component' in Pillar 1 of the new CAP (Common Agriculture Policy) includes three elements of greening that all farmers would have to comply with to receive direct payments. The three components are: crop diversification; conservation of permanent grassland; and the ecological focus areas (EFA). One option for EFAs is to have nitrogen-fixing crops, e.g. protein crops.
In the new CAP, the Commission gives MS the opportunity to support the production of protein crops with up to two% of their national envelopes. Should any MS decide to use this possibility, the Commission has to be notified in advance. MS must have notified the Commission by August 2014 to benefit from this option from January 1, 2015. Similarly, if the MS wanted to use the coupled option from January 1, 2016, the Commission must have notified by August 2015.
The use of three neonicotinoids (clothianidin, imidacloprid and thiametoxam) has been restricted since December 1, 2013 for a period of two years on crops attractive to honeybees such as rapeseed, sunflowers, and soybeans.
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