USDA Projects Rise in World Oilseed Production, Expects Higher Consumption, Reduces Ending Stock Estimates

The latest USDA (US Department of Agriculture) demand and supply report for has projected world oilseed production is forecast to grow 5 percent in 2020-21. This estimation has been done considering a jump in production of South America and the United States. Global oilseed production is projected to reach a record 605.9 million tons on record plantings. Similarly, world Soybean production is forecast to rise 26.6 million tons to a record 362.8 million tons, less than 3 million tons above the previous record set in 2018/19. The department now expects Global oilseed consumption to increase by 2 percent in 2020/21, which would be the highest growth rate since 2017/18. Scope for feed demand in China following 2 years of declining pork production due to African swine fever, is improving. Therefore, consumption is expected to improve.
From trade perspective, the US Agriculture Department has forecast world oilseed trade to increase mostly on higher soybean demand from China. Trade in other oilseeds is expected to be nearly same except for sunflower seed and rapeseed where trade is expected to rise modestly on larger exporter supplies. Global ending stocks on the other hand are projected to register marginal decline, considering fall in soybean and peanut stocks. Sunflower seed ending stocks are forecast to recover from low level forecast for 2019/20. Global oilseed meal production is expected to grow in 2020/21, and driving force considered by the USDA will be soybean meal production. Due to robust demand from China, global protein meal consumption is also forecast to improve.
Similarly, world food oil consumption is forecast to expand after a year of slower growth as the adverse impact of the corona virus pandemic continues. The Department has upgraded the forecast for Palm, olive, and soybean oils by 3 percent or more. Global industrial oil consumption is also forecast higher in line with an expected recovery in biodiesel production in major markets. Following a year of declining global palm oil trade, global vegetable oil trade is expected to recover. But global ending stocks are forecast to decline considering recovery in world’s food oil demand. India’s soybean crush is forecast to improve by 1.1 million to 9.4 million tons, since a larger crop is expected in 2020. Therefore, India’s soybean meal exports are expected to gather pact and rebound by 4.2 Lakh tons to 1.9 million tons. Meanwhile Indian soybean oil imports are forecast to rise marginally to 3.2 million tons as higher domestic supplies and slow vegetable oil consumption growth will be negatively affecting import demand.
This year global soybean consumption is also expected to increase and China is projected to account for over half of global consumption growth in 2020/21 and roughly 85 percent of import growth. Argentina exports are projected to decline in the face of strong competition from the United States and Brazil and growing domestic crush. The USDA has projected Global soybean meal consumption growth to accelerate by 4 percent on growing China demand. China accounts for nearly one-third of global consumption and more than half of growth in consumption. Global meal exports are forecast to grow 1 percent in 2020/21, near historic trends. Argentina and India are projected to meet most of the growth in trade in 2020/21 as rising feed demand in the United States and Brazil will account for nearly all of the increase in their meal production. Similarly, World’s Soybean oil consumption is projected to rise 4 percent, mainly on expectation of strong Chinese demand where increased supplies of domestically produced oil will substitute for other oils. Global Soy meal Exports are forecast to rise 2 percent in 2020/21 with total global volume projected to reach 11.8 million tons, which shall be a new record.
Source: Krishijagran