Oilseeds - OECD-FAO Agricultural Outlook 2013-2022

 

Oilseed production is set to increase faster than cereals, mainly due to yield gains. Palm oil will expand in line with other vegetable oils, maintaining its share at 34% of total vegetable oil production throughout the outlook period.

 

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Market situation

Starting with very high vegetable oil and oilseed prices since 2010, the 2012 drought in the United States led to even higher prices. Since soybeans contain about 80% meal and only 20% oil, the impact of the drought was much stronger on the world price of protein meal than on the price of vegetable oil. Because of this shortage of oilseeds, crushing margins were comparably low during the 2012 crop marketing year. 

At 14%, the stock to use ratio in 2012 is low by historic comparison as well as compared to coarse grains and wheat. Even under the normal weather conditions assumed in the Outlook it is expected to remain at this level making it difficult to buffer the market efficiently in case of production shortfalls.

Global supply of vegetable oil remained relatively stable in the 2012 crop year based on growing palm oil production and a more limited impact of the US drought on the global oilseed oil production. The present tightness in the market is mostly due to strong demand for food and biodiesel uses.

Projection highlights

  • Assuming normal yields in all producing regions, world production of oilseeds should rebound in marketing years 2013 and 2014 resulting in a sharp reduction of international oilseeds and products prices.  After this correction, prices are expected to increase slowly based on strong food and fuel demands of vegetable oil and a solid feed demand for protein meal. 

  • Relative profitability of coarse grains versus oilseeds is expected to favour the distribution of land toward oilseeds and lead to a 26% increase in world production when combined with yield gains. With 93% of global exports in 2022, the Americas should confirm their role as the oilseeds basket of the world. China is expected to further solidify its position as the leading oilseeds importer but its share of world oilseeds crush is expected to stabilise at 25% of world total.

  • After a period of over-proportional growth in palm oil production, its share in total oilseed oil output is projected to stabilise at around one third of the total vegetable oil production. World vegetable oil production remains very concentrated in the coming decade as growth originates in the main producing regions. Demand for food remains strong based on income and population growths, fuel uses are supported by consumption mandates.

  • Global protein meal output is projected to increase by 25% or 67 Mt. Two-thirds of it should come from four countries: Argentina, Brazil, China and the United States. Compared to the past decade, consumption growth of protein meal slows down significantly reflecting both, slower absolute growth in global livestock production and slower growth in the relative use of protein meal in feed rations reflecting a less rapid structural transformation process in the livestock sector in the coming decade.