HAMBURG: Global oilmeal prices are likely to be weak in coming months as an increase in soybean crushing’s will raise the proportion of oilmeals produced from seed processing, the head of Hamburg-based oilseeds analysts Oil World said on Wednesday.
"In my price forecasts I assume oilmeals will become the weakest member in the (oilseeds) complex, while vegetable oils should be the strongest, with oilseeds trading/fluctuating somewhere in between," Oil World Executive Director Thomas Mielke said.
Worldwide supplies of sunflower seed and rapeseed will be insufficient in the next 6 to 12 months, Mielke said in a release of a presentation made at the Oilseed Congress Europe in Barcelona this week.
"But there will be a surplus in soybeans," he said. "Global dependence on soybeans will increase. However soybeans as a (high yield) meal seed cannot solve an oil supply deficit without creating a surplus in oilmeals."
"We expect the oil share of the combined product value to appreciate, while meal prices are likely to come under pressure and become weaker than vegetable oils."
Falling crude oil prices and sluggish economic growth have weakened sentiment in agricultural markets along with rising stocks of oilseeds, primarily soybeans, and other agricultural products, he said.
"Biodiesel production is declining in many countries since vegetable oils have lost their price attractiveness in the energy market since September," he said. "Although this is partly compensated by a further growth in biodiesel production in Brazil and a few other countries, it is very well possible that world production of biodiesel will decline in the calendar year 2015, the first annual decline ever registered."
Developments in Indonesia may be a swing factor after the country decided this month to increase subsidies for biodiesel which is largely produced in the country from palm oil.
"This will stimulate consumption of palm oil for biodiesel production and thus support palm oil prices," Mielke said.
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