August 2001 Edition
Tight Vegetable Oil Market Expected in 2001/02:
World Soybean Oil Stocks to Decline
USDA forecasts a tightening of the vegetable oil market in 2001/02, led by a slow-down in the rate of palm oil production and exports as well as reduced production and exports of sunflower and rapeseed oils. Palm oil production will increase a modest 4 percent in 2001/02, compared to 9 percent in 2000/2001. Because this slow-down will occur in tandem with an increase in the global demand for vegetable oil, palm oil ending stocks are forecast to decrease. Palm oil ending stocks in 2001/02 will be equivalent to 38 days of use, versus 44 days of use in 2000/01. Also as a direct result of the slowing palm oil production, the rate of increase in palm oil exports will slow from 16 percent in 2000/01 to 4 percent in 2001/02. Slowing palm oil exports, combined with rapeseed oil and sunflower oil exports that are at their lowest levels in over five years, will make room for a dramatic increase in soybean oil exports in 2001/02. Soybean oil exports are forecast to increase 9 percent in 2001/02, versus 2 percent in 2000/01, thereby increasing soybean oils global market share from 21 percent in 2000/01 to 23 percent in 2001/02. Thus, despite record production of soybean oil in 2001/02, ending stocks will likely be at a five-year low. Tightening vegetable oil stocks in 2001/02 will boost vegetable oil prices, reversing the below-average levels that have prevailed since 1998.
Return to Oilseeds Table of Contents Page
Approved by the World Agricultural Outlook Board/USDA