Global food crisis looming on biofuels
5 Sep, 2007, 0525 hrs IST, REUTERS
HAMBURG: A huge increase in demand for oilseeds and vegetable oils for
biofuel production could lead to a global food crisis as raw materials
are switched to bioenergy output, Hamburg-based oilseeds analysts Oil
"It is high time to realise that the world community is approaching a
food crisis in 2008 unless usage of agricultural products for biofuels
is curbed or ideal weather conditions and sharply higher crop yields are
achieved in 2008," it said.
Global grain and vegetable oil stocks are already at historically low
levels and farmers around the world are switching plantings from
oilseeds to grains because of record high cereals prices, it said,
adding "The global supply and demand balance of the seven major oilseeds
will become tighter than expected."
"The global production deficit of 17 to 18 million tonnes relative to
prospective consumption will enforce an unprecedented decline in oilseed
stocks in 2007-08."
It estimated global 2007-08 production of the seven main oilseeds at
384.2 million tonnes, far below consumption of 401.8 million tonnes.
This compares to 2006-07 production of 396.2 million tonnes and
consumption of 387.3 million tonnes.
The surge in consumption largely caused by biofuel production will cut
2007-08 season ending world stocks of the seven main oilseeds to 64.3
million tonnes from 81.9 million tonnes at the end of 2006-07.
"This decline is unprecedented and will cut world stocks of the seven
oilseeds at the end of the new season to only 16% of annual use," it
said, adding this compared with stocks covering 21.1% of annual global
use at the end of 2006-07.
Global stocks would probably be sufficient to cover demand in 2007-08
but a significant increase in oilseed crops would be needed in 2008-09,
it said. "Oilseed prices will have to strengthen relative to grain to
buy back acreage," the report said.
The report further said that record high grain prices will increase
global demand for soyameal in the coming months.
Global October 2007-September 2008 soyameal consumption is likely to
rise to 166 million tonne from 155.9 million tonne estimated for
2006-07, it said. World 2007-08 soyameal output will rise to 166.7
million tonne from 155.6 million tonne in 2006-07. "As a result of the
currently unusually high prices, which are expected to remain high
during most of the coming season, usage of grain for feeds will be
reduced," it said.
"Consequently, demand for alternative feedstuffs such as oilmeals is
Most of the forecast rise in global soyameal production will take place
in Argentina, it said. Strong soyameal demand is likely to come from the
EU, it said. "China is another key factor," it said, adding "Following
rather weak usage growth in 2006-07 we expect a pronounced uptrend in
Chinese soyameal consumption in Oct/Sept 2007-08."
Check for earlier Pacific Biofuel posts: http://pacbiofuel.blogspot.com/