Situation and Outlook
Soybeans and Products
World soybean production in 1998/99 is forecast at 154.0
million tons, down from last year's estimate, reflecting a
reduction for most of the major producers. Conversely, the U.S.,
Paraguay and EU soybean production is forecast above a year
earlier. With current growing conditions, U.S. soybean yields are
forecast to average 2.65 tons per hectare. This level represents
a 1 percent increase from last year and with the area expansion
supports a record crop projection of 77.0 million tons, up 4
percent. The South American spring soybean crop is forecast to
show a reduction in 1999 mostly reflecting a drop in Argentina's
and Brazil's output of 16 percent and 4 percent, respectively. In
Paraguay, soybean area is projected to remain at last year's
level of 1.3 hectares while production rebounds from the below
normal yields in 1998.
The world soybean export forecast for 1998/99 is projected at 38.1 million tons down 3 percent from last year reflecting a smaller supply situation. The U.S. export forecast is down in anticipation of strong exports by South America during the first half of the marketing year. Brazil's soybean export forecast is down 11 percent from the record level reached last year following policy changes that made bean exports more attractive relative to the products. In Argentina, soybean exports are projected 20 percent lower in line with the smaller crop, and expansion in the crushing industry and export rebates of 3.15 and 1.35 percent on semi-refined and refined soybean oil.
Forecast world soybean imports for 1998/99 are projected to decline from last year's level. This reduction reflects weaker import demand in Brazil and four of the five countries in Southeast Asia as they strive to recover from their financial crisis. The Philippines' soybean imports are forecast at more than double last year's level at 380,000 tons. With a larger import and crush estimate for the Philippines, the soybean meal import projection is lowered 20 percent. China's soybean import forecast continues to reflect growth but at a much slower rate than previous years. In 1998/99, China's import forecast is 12 percent above a year earlier compared to a 45 percent increase in 1997/98.
World soybean ending stocks are projected to escalate to 23.9 million tons up 24 percent from the 1997/98 estimate. Although U.S. beginning stocks are sharply reduced from the earlier estimate, the 1998/99 U.S. ending stocks projection for September 1999 is doubled last year's level. This increase reflects larger supplies and export competition from South America.
Global soybean meal exports in 1998/99 are forecast at 37.8 million tons, up 3 percent from last year. Larger exportable supplies, favorable world prices and infrastructure improvements contribute to growth in export projections for South America and India. The U.S. soybean meal export forecast is 5 percent below the year earlier but still the second highest on record.
Global soybean meal imports at 37.7 million tons in 1998/99 are expected to be characterized by larger supplies and favorable world prices that will help boost consumption. These attributes are expected to help soybean meal imports and consumption to grow in Latin America and the EU. Latin America's rising incomes are creating additional demand for meats. With the expansion of poultry feeding, soybean meal imports and consumption are forecast to rise 10 percent in 1998/99 following a 9 percent increase last year.
Some of the leading growth markets are Mexico, Brazil,
Colombia, the Dominican Republic and Guatemala. Indications are
that soybean meal demand for the EU is on the rise in response to
some shifting in the livestock industry from beef to poultry and
pork. Asia's soybean meal imports are forecast to show a decrease
from last year in response to a drop in meal import requirements
in Malaysia, Thailand and the Philippines and slowing growth in
China's demand. Indonesia and South Korea's imports needs are
flat with last year's reduced level.
World soybean oil exports in 1998/99 are forecast to reach 6.9 million tons reflecting significant increases by the major suppliers. The United States' exports are forecast unchanged at last year's record 1.3 million tons. The U.S. soybean oil season average price is projected up slightly from last year's price to a range of 26.0 cents to 28.00 cents per pound reflecting a slight decline in ending stocks. Argentina's soybean oil exports are projected to reach a record 2.3 million tons. Forecast world soybean oil imports for 1998/99 are to increase 3 percent mostly reflecting growth in the EU, Latin America and China. China's soybean oil import forecast of 2.2 million tons continues to support its position as the world's largest soybean oil market.
Rapeseed and Products
World rapeseed production is forecast to reach record levels
in 1998/99 as strong rapeseed prices, boosted by strong demand
for vegetable oil, and concurrent weakness in grain prices,
encourage expanded rapeseed plantings. World rapeseed plantings
are up 7 percent from last year to a record 25.1 million hectares
with major expansion noted for Australia, Canada, the EU, India,
and the United States. Smaller increases are also noted for
China, the Czech Republic, and Poland for the coming year. World
production is forecast to reach a record 36.1 million tons with
improved yields adding to the increase in Poland, Australia, and
Canada. Only in China is rapeseed production expected to decline
in 1998 in response to lower yields.
In Australia, rapeseed production is forecast to increase 63 percent to a record 1.4 million tons. Rapeseed production in Australia has grown nearly 5-fold since 1994/95 as growers look for alternatives to wheat production. As a southern hemisphere producer, Australian production enters the world market in the early part of the new year when competition for northern hemisphere crops is less severe. This fact, combined with Australia's proximity to Asian markets, has helped encourage expansion of rapeseed production in Australia over the last few years. Growers in Canada have pushed rapeseed area to 5.4 million hectares due to strong prices relative to wheat. Not since 1994, when vegetable oil prices were also strong, has rapeseed area in Canada been larger. Similarly, rapeseed production in 1998 is expected to be the second largest on record at 7.0 million tons.
In the EU, rapeseed area is forecast to expand 11 percent to 3.1 million hectares with production climbing to 9.5 million tons. Both area and quantity levels are expected to set records despite Blair House limitations on subsidized production of oilseeds. Under Blair House, EU growers can expect reduced payments for the 1998 crop. In Poland, rapeseed yields are expected to improve this year as the mild winter weather reduced winter-kill and subsequently reduced the need to replant with lower yielding spring varieties. This, combined with a 23-percent increase in area planted should help boost total rapeseed production in Poland 56 percent to 900,000 tons in 1998. In the U.S., rapeseed area and production are forecast to reach record levels as growers, looking for alternatives to grain production, turn to rapeseed. Total U.S. rapeseed area is expected to approach 440,000 ha in 1998 with production reaching 650,000 tons. This is nearly a 3-fold increase in area and production since 1996.
World rapeseed imports are forecast to reach a record 7.0
million tons in 1998/99 due in part to the large production
expected this year. Much of the growth in imports is expected in
China where imports are forecast to approach 1 million tons. The
growth in imports for 1998/99 in China is in response to the
expected drop in local production. World rapeseed exports are
also forecast to reach record levels this year, led by increased
Australian exports. Canadian exports are also expected to grow
modestly in 1998/99 to 2.9 million tons, the largest export level
With an increased supply of rapeseed available in 1998/99, world rapeseed crush is forecast to grow 5 percent to a record 32.8 million tons. Correspondingly, production of rapeseed meal and oil will also increase to record levels in 1998/99. The largest increases in crush are expected in Canada, the EU, and India which combined is expected to account for 1.7 million tons of additional crush. Australia's rapeseed crush in 1998/99 will increase over 60 percent in response to recent expansion in crushing capacity. In China, rapeseed crush will be reduced in response to smaller available supplies.
World production of rapeseed meal in 1998/99 is forecast to increase to a record 19.8 million tons while rapeseed oil production climbs to a record 12.2 million tons. For the meal, much of the production increases observed in 1998/99 will be consumed locally with only the U.S. showing a significant increase in rapeseed meal imports, primarily from Canada. EU intra-trade is also expected to grow in the coming year due to increased supplies of meal in the EU. For rapeseed oil, growth in imports are primarily accounted for by China and the United states where rapeseed oil imports are forecast to increase 200,000 and 55,000 tons respectively. Growth in rapeseed oil exports for 1998/99 are expected for Australia and Canada, up 55,000 and 90,000 tons respectively. Net EU rapeseed oil exports for the period are expected to grow slightly to 820,000 tons.
Sunflowerseed and Products
World sunflowerseed production is forecast to increase 11
percent in 1998/99 to a record 26 million tons as production
rebounds in Argentina, Russia and Ukraine. The increase is due to
better prices for sunflowerseeds prompting farmers in Argentina,
Russia, Ukraine and the U.S. to return to sunflowerseed planting.
The projected increase in these countries outweighs the
production shortfall in the EU. The high demand for
sunflowerseeds and the reduced profitability of grains has led
farmers in Russia and Ukraine to increase sunflowerseed plantings
while cutting back the area planted to grain. However, below
average yields are forecast due to unfavorable planting
conditions. In spite of this, production is forecast to increase
to 3.3 million in Russia; and 2.4 million in Ukraine. These are
17 and 4 percent increases over last year. Lower production in
the EU reflects lower yield potential resulting from unfavorable
weather conditions in France and Spain. The EU's 1998/99
sunflowerseed production is forecast at 3.9 million tons, down 2
percent from last year. In the U.S., the higher production
forecast in 1998/99 is attributed to farmers shifting from grains
to sunflowerseeds. As a result, U.S. sunflowerseed production is
forecast at 2.1 million tons, an increase of 9 percent from last
year and the highest production in four years.
Global exports of sunflowerseeds are forecast at 4 million tons, up 5 percent from last year. Exports are projected to be dominated by Argentina and the countries of the former Soviet Union. The U.S. export forecast for 1998/99 is projected at 184,000 tons, an 11 percent increase over last year, reflecting the expected production increase and strong world demand. World sunflowerseed imports are estimated at 3.9 million tons, an increase of 4 percent over last year. The EU is forecast to increase its sunflowerseed imports to 3 million tons due the forecast production shortfall.
World sunflowerseed meal production is forecast to increase 4
percent in 1998/99 to 10.1 million tons on account of an increase
in crush. Meal exports are also expected to rise to 3.1 million
tons. Argentina is expected to account for much of the increase.
Imports of sunflowerseed meal are forecast at 3 million tons, 8
percent above last year's estimate with EU accounting for most of
With a larger crush, global sunflowerseed oil production is forecast at 8.8 million tons, a six percent increase from last year. Argentina, FSU, India and the U.S. are expected to account for all the increase. World sunflowerseed oil exports are forecast to increase 311,000 tons to 3.7 million tons mainly on the strength of increased exports from Argentina and the U.S. India's sunflowerseed oil imports are forecast at 125,000 tons, an increase of 167 percent over last year's estimate. The EU is expected to import 26 percent more sunflowerseed oil in 1998/99 than they did in 1997/98. The FSU's sunflowerseed oil imports are forecast to increase 9 percent to 365,000 tons in 1998/99 to reflect an increase in domestic sunflowerseed oil consumption. Overall, world sunflowerseed oil consumption is forecast to rise 466,000 tons to 8.9 million tons in 1998/99. Large consumption increases are forecast for India, the EU, the FSU and Mexico.
Cottonseed and Products
Global cottonseed production is forecast to decrease slightly
to 33.5 million tons in 1998/99. India, Pakistan, Uzbekistan, and
Turkey, are projected to increase production. The United States
and China are forecast to decrease production in 1998/99. The
United States production will decline because of a reduction in
area and severe crop damage in the south from early hot, dry
weather and excessive moisture in California. China's production
forecast is lower due to reduced area planted to cotton. World
cottonseed exports for 1998/99 are forecast to decrease to
873,000 tons. Australia, Benin, Greece, and Syria are forecast to
account for 70 percent of world cottonseed exports. Benin is
projected to export 220,000 tons of cottonseed for 1998/99, up
from 5 percent last year. U.S. exports of cottonseed in 1998/99
are expected to decline to 23,000 tons. Italy, Japan, Mexico, and
Uzbekistan are projected to account for 81 percent of cottonseed
imports in 1998/99. Japan is forecast to be the world's largest
importer of cottonseed in 1998/99 with imports of 175,000 tons.
World cottonseed meal production remains unchanged from last year at 12.0 million tons. China continues to be the largest producer of cottonseed meal. China traditionally exported higher volumes of cottonseed meal, but exports have declined substantially over the last 3 years and are projected at only 200,000 tons in 1998/99. Global exports of cottonseed meal are expected to increase by 17 percent in 1998/99. Argentina is projected to be the leading exporter of cottonseed meal at 305,000 tons. Global imports of cottonseed meal are projected to decline to 744,000 tons in 1998/99. South Korea and the United Kingdom are the largest importers of cottonseed meal accounting for 51 percent of cottonseed meal imports.
Global cottonseed oil production is projected to increase 3 percent to 3.89 million tons in 1998/99. China, the United States, India, and Uzbekistan continue to be the world largest producers of cottonseed oil. The United States is expected to produce 494,000 tons of cottonseed oil. In 1998/99, global exports of cottonseed oil are 407,000 tons. The United States, Uzbekistan, and Argentina are expected to account for 88 percent of total cottonseed oil exports. Russia is the leading importer of cottonseed oil, followed by Egypt and India. World consumption of cottonseed oil is forecasted at 3.9 million tons in 1998/99.
Peanuts and Products
World peanut production is forecast to rebound in 1998/99
following last year's 1.3 million ton decline. However, total
production is expected to lag 1996/97 production reaching 27.7
million tons in the coming year. Most of the increase in
production will occur in India and China which combined accounts
for nearly 65 percent of world peanut production. In India,
improved growing conditions are expected to help boost yields
above the 1 ton/ha level accounting for all of the forecast
increase in production. In China, yields are expected to remain
at 1997/98 levels with production increases coming exclusively
from increased area planted in 1998.
Peanut production in the U.S. is also forecast to increase in 1998 to 1.7 million tons based on improved yields. However, recent dry weather in the Southeast, if it persists, could reduce final production below current projections. Argentina's peanut production forecast for late 1998/99 was reduced 50,000 tons from 1997/98. However, production will still be double the level of two year's ago with area planted at a record 400,000 hectares.
Despite the increase in production, peanut exports for 1998/99 are forecast to decline 5 percent from the previous year to 1.6 million tons. Nearly all of the decline in exports is expected to occur in Argentina where exports are forecast to decline to 400,000 tons in 1998/99. However, this is still enough to make Argentina the largest peanut exporter for the second year running. U.S. exports, at 318,000 tons, are expected to be unchanged from current levels in 1998/99. On the import side, import levels are also forecast to be lower in 1998/99 due to reduced import demand in Asia. Imports for Indonesia are expected to reach their lowest level in 6 years due to the recent economic difficulties facing the country. Additionally, imports are expected to be lower in Korea, Japan, and the Philippines due to Asia's continued economic troubles.
Peanut crush is expected to climb 581,000 tons to 14.4 million tons in 1998/99. Increased peanut production, augmented by reduced consumption of food use peanuts, is expected to lead to a larger crush in India, China, Argentina, and the United States and corresponding increase in peanut meal and oil production. However, most of this increase will go toward filling domestic meal and oil demand in producing countries with little additional trade volume expected. Peanut and peanut product stocks will remain relatively unchanged from 1997/98 levels in the coming year.
Copra and Products
Global 1998/99 copra production is estimated at 5.43 million tons, down slightly from the 1997/98 production of 5.50 million. The Philippines is the leading producer with production forecast at 2.0 million tons, 7 percent lower than last year due to a prolonged drought (El Nino) that has affected the yield of the coconut palms. The effect of the El Nino weather pattern on the the palm trees is expected to last for two years. World coconut oil production is projected 1.2 percent below the 1997/98 production at 3.38 million tons to coincide with the decreasing copra production. Coconut oil production in the Philippines is forecast at 1.26 million tons, down substantially from the 1997/98's production of 1.35 million. In Indonesia, the second largest coconut oil producer, output is expected to reach 1.05 million tons, slightly above 1997/98. Estimated world consumption of coconut oil remains strong and is expected to reach almost 3.4 million tons. The United States remain the largest single importer with an estimated 560,000 tons of imports for the 1998/99 marketing year.
World palm oil production is forecast to experience a slight
growth of 2.2 percent in 1998/99 as some of the El Nino stricken
areas in Indonesia and East Malaysia are expected to start
recovering. Trees in these areas are expected to produce more
female flowers, which in turn will produce more fruit bunches and
therefore palm oil. Experts believe that the results of the last
drought could last for up to two years making the situation of
the palm oil production very uncertain. Our first forecast for
1998/99 is still for a modest growth to a total of 17.78 million
tons of world production for palm oil. In Malaysia palm oil
output is expected to reach 8.8 million tons in 1998/99 up from
8.6 million the previous year. Global consumption for 1998/99 is
forecasted at almost 18.0 million tons, slightly up from last
year. World exports are expected to mirror consumption and reach
11.1 million tons in 1998/99.
The continuation of the financial crisis in Indonesia and the uncertainty of its export policies as a result, continue to pose a significant challenge for the trade of palm oil and its impact on prices.
The government of Indonesia recently announced an increase in
export taxes covering crude and RBD palm oil as well as crude and
RBD olein, in an effort to stabilize prices and ensure sufficient
supplies for the domestic market. These measures continue the
upward pressure on palm oil prices.
For 1998/99 world imports of palm oil are forecast at just above 11 million tons 1.3 percent above last year, with India, China, Pakistan and EU still the world's leading palm oil importers.
Fish Meal and Fish Oil
The outlook for fishmeal production and trade continues to
decline for 1998. On a calendar year basis, world fishmeal
production for 1998 is now forecast at 5.2 million tons, a
reduction of 800,000 tons from the June forecast. The catch in
Chile and Peru has been below this pace, but the trade expects
improvement as El Nino subsides. This forecast level of fishmeal
production is 1.2 million tons below 1997 production, and the
lowest level since 1983 (the most recent severe El Nino
experience). Exports of fishmeal out of Chile and Peru have
declined drastically as a result. In Peru, the world's leading
fishmeal producer, exports are forecast to fall to only 700,000
tons - a 64 percent decline year-to-year. World exports of
fishmeal for 1998 are now forecast at 2.4 million tons, a
reduction of 1.7 million tons from 1997.
World fish oil supplies are also becoming sparse. Production for 1998 is now forecast at 960,000 tons compared to 1.2 million tons in 1997. Fish oil production has suffered not only from a low catch, but also from a low oil yield due to warmer Pacific waters. Declining exportable supplies and world stocks have led to a large appreciation of fish oil prices. World fish oil exports are currently forecast at just over 600,000 tons, a 200,000 ton decline from 1997 levels.
Global olive oil production for 1998/99 is forecast at 2.4
million tons, up 1 percent from the 1997/98 estimate. The
European Union still leads the world in production and in
1998/99, is expected to contribute 77 percent of the global olive
oil supply. Tunisia, second to the EU in olive oil production, is
projected to produce only 200,000 tons in 1998/99. Global
consumption of olive oil is projected to increase 2 percent next
World olive oil exports for 1998/99 are forecast at 1.04 million tons. The EU is expected to be to be the largest olive oil exporter for 1998/99 with exports forecast at 865,000 tons . Italy's olive oil imports are forecast at 420,000 tons in 1998/99. The United States is projected to import 200,000 tons, an increase of 10 percent from last year, in response to strong consumer demand. The United States exports in 1998/99 are expected to remain unchanged from last year's 10,000 tons.
Jim L. Matthews (202) 720-5448
Floudia Bradley (202) 720-2257
William V. George (202) 720-6234
Kwamena Cudjoe (202) 720-0141
Robert Hanson (202) 690-2581
Greg Edwards (202) 690-4199
Table of Contents