Steady EU biodiesel consumption against a backdrop of faltering European production of rapeseed and rapeseed oil is expected to slash EU rapeseed oil stocks over the next year, USDA’s Foreign Agricultural Service said in an EU oilseeds update.
FAS sees EU rapeseed oil end stocks tumbling to 114,000t at the end of the 2015/2016 marketing year, 42% below USDA’s official forecast. FAS pegs end stocks for the current marketing at 284,000t, close to USDA’s 300,000t forecast.
Despite strong biodiesel demand in France, the UK and Czech Republic this year, European industry is expected to consume just 7.2mn t of rapeseed oil in the current marketing year according to FAS, down from the 7.7mn t of consumption projected by USDA in its official forecast. EU biodiesel demand for rapeseed oil is seen remaining steady through the next marketing year.
FAS pegs EU rapeseed oil production almost at parity with USDA’s official 10.251mn t projection for the current marketing year. With the EU’s 2015/2016 rapeseed output expected to drop 12% to 21.3mn t, FAS expects the bloc’s rapeseed oil output to drop to 9.9mn t, slightly above the 9.85mn t projected by USDA in its official forecast.
With faltering EU rapeseed oil output tightening the domestic market, USDA expects crushers to substitute into a more abundant soybean market to satisfy strong meal demand. An expanding EU dairy sector has driven record rapeseed crushings this year.