Global vegoil use very high on biofuels

Hamburg, Nov 28 | Updated: Nov 29 2006, 08:51am hrs
Global vegetable oil consumption is unexpectedly high, largely because of strong biofuel use and prices are likely to rise in 2007, Hamburg-based oilseeds analysts Oil World said. Global consumption of the eight main vegetable oils in October 2005/September 2006 rose by an estimated 8.45 million tonnes on the year to 114.9 million tonnes, it said.

Global biodiesel production capacities are being expanded at an alarming rate and we now estimate they will approach 22 million tonnes by December 2007 compared with six million tonnes in December 2005, it said. We have great concern about the effect on the vegetable oil market once the new production units purchase their feedstock. It added: Outstanding demand for vegetable oils for biofuels is leading to a boost in European Union imports of soyoil, sun oil, rape oil and palm oil to a combined 2.08 million tonnes in October/December 2006, up by 0.5 million tonnes or 32% from a year before.

Vegetable oil futures prices are now vulnerable to a setback soon owing to profit-taking, it said. But from early 2007 onward we expect higher prices for oilseeds and products and expect that oilseeds will be the strongest. Reuters