Lower prices for popular vegetable oils
industry are slated to rise for 2004/05 year on stronger yields for
peanuts, soybeans and rape seed oil, building up global stocks to
about 390.5 million tons.
Rape seed, soybeans and peanuts are all experiencing strong market growth as food makers continue to turn away from animal fats in favour of vegetable alternatives.
By 2008 analysts Business Communications Company predict these key vegetable edible oils will account for 69.9 per cent of the US market.
US production of major crude vegetable oils is slated to reach 8.6 million metric tons in 2008, with soybean oil accounting for nearly 87 per cent of the major vegetable oil production at 7.4 million metric tons.
Today, soybean oil - together with palm oil - accounts for over half of all oil consumed in the world. Rape seed also enjoys a strong share of the market but in recent months supplies, and prices, have been severely impacted by a pulling of stocks from China and a dip in supplies due to poor harvests.
In each of the last four years world soybean production has fallen short of consumption, forcing a draw-down of global stocks. Prices recently hit 15-year highs although they have eased in recent weeks on growing supplies.
TheWASDE report from the US department of agriculture confirms increased availability has brought some relief to the price of soybeans.
Oil prices in the US are forecast at 21 to 24 cents per pound, down 0.5 cent on both ends of the range, as soybean supplies hit 460 million bushels and soybean oil production rises to 165 million pounds, based on a higher projected extraction rate.
Chinese soybean production will reach a record 18 million tons.
In Canada rapeseed production has risen by 0.7 million tons to 7.7 million tons, and US oilseed production is expected to reach 96.9 million tons.
Higher yields for peanuts, soy and rapeseed have helped offset lower production for sunflower seeds - reduced in the Ukraine, the EU 25,and Moldova.
The vegetable oil market is undergoing some pressure from the market to design trans fat free alternatives for food makers looking to slice these artery-clogging fats out of formulations.
Trans fatty acids (TFAs) are formed when liquid vegetable oils go through a chemical process called hydrogenation.
Dow AgroSciences, the Indianapolis-based biotech subsidiary of chemical giant Dow Chemical, recently introduced Natreon canola oil, crushed from the high yield Nexera seed, as a 'naturally stable alternative to partially hydrogenated oils'.
