European Union imports of palm oil are likely to rise sharply in October 2005/September 2006 to compensate for sunseed oil production lost because of Spain's drought, Hamburg-based newsletter Oil World forecasts.
"Palm oil will be the key residual supplier for the EU oils and fats market in 2005/06," it said. "We tentatively peg palm oil imports at 4.7 to 4.8 million tonnes, roughly 500,000 tonnes above the volume expected in 2004/05."
It forecasts the EU's 2005/06 imports of the five main edible oils will rise to 6.23 million tonnes from 5.42 million tonnes in 2004/05, making palm the dominant imported oil.
Spain's low sunflower seed crop was likely to help cut EU 2005/06 sunoil output to 1.67 million tonnes from 1.77 million tonnes in 2004/05.
EU olive oil output was likely to fall to 1.65 million tonnes from 2.09 million tonnes, also creating new import demand at a time of rising EU vegetable oil consumption.
Oil World expects very strong EU rapeoil demand as food producers do not want to label products as containing genetically-modified ingredients like soya oil. Rapeseed demand for biodiesel fuel is also rising.
"EU rapeoil demand may in fact exceed domestic production and attract higher imports, possibly from Canada and Ukraine," it added.
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