GAIN reports address oilseed, biodiesel production

Several Global Agricultural Information Network reports published this month by the USDA Foreign Agricultural Service describe expectations for oilseed and biodiesel production in markets around the world. April reports that directly address biodiesel include those relating to markets in Canada, the EU, and Indonesia.

Regarding the European region, the GAIN reports noted that total oilseed production in the 27 EU member states is expected to be stable, with approximately 29 million metric tons (MMT) produced in marketing year (MY) 2012-‘13. The report also states that although a reduction in acreage is expected, rapeseed production is expected to rebound modestly. Specifically, land devoted to oilseed cultivation is expected to decrease by 1.8 percent to 11.4 million hectares (28.2 million acres). The report also predicts that the use of vegetable oil in the EU will increase this year. This is primarily attributed to increased food and biofuel uses.

According to the report, the use of oilseed for biodiesel production in the EU is expected to remain flat during the 2012-‘13 MY. The report also notes that the use of rapeseed oil as biodiesel feedstock is expected to remain stable, but the use of sunflower and palm oil as feedstock is expected to increase as the expense of soybean oil. Overall, rapeseed oil is expected to remain the primary biodiesel feedstock, with a 77 percent market share. Respective percentages for soybean, palm and sunflower feedstocks are anticipated to be 11.2 percent, 9.1 percent and 2.7 percent. Furthermore, the use of recycled oils, including those from both plants and animals, is expected to increase.

The report also states that biofuels production in the EU is forecast to remain a growth market for palm oil. In 2011, the FAS estimates that 650,000 metric tons of palm oil was used to produce biofuel. This is expected to grow to 750,000 metric tons by 2013. The use of palm oil is expected to increase the most in the Netherlands, where Neste Oil’s renewable diesel plant is located.

The GAIN report for Indonesia also addresses the production of palm oil. According to the report, the production of crude palm oil is expected to increase from 23.6 MMT in MY 2010-‘11 to 25 MMT in MY 2011-‘12 and 26.4 MMT in MY 2012-‘13.

In Indonesian report states that growing domestic demand for palm oil-based food, feed and oleochemical products, along with continuous government support of the Indonesia biodiesel program, will increase domestic use of palm oil. The level of use is expected to increase from 6.77 MMT to 7.26 MMT in MY 2011-‘12 and 7.71 MMT in MY 2012-‘13. In 2011, Indonesian exported 16.44 MMT of palm oil. Export levels are expected to increase to 17.5 MMT and 18.5 MMT respectively during MY 2011-‘12 and MY 2012-‘13. 

The GAIN report on the Canadian marketplace shows that the country’s farmers are expected to seed a record amount of canola in 2012-‘13, which will boost Canada’s total oilseed production to more than 20 MMT. That production level represents a 7 percent increase over and above 2011-‘12 production.

Regarding biodiesel used to meet the country’s 2 percent renewable content mandate for diesel and heating oil, the report states that much of the canola-based biodiesel used to meet the mandate is made from Canadian-grown canola that is exported to the U.S. for conversion. The finished biodiesel is then returned to Canadian markets. According to the report, investment to increase biodiesel production capacity in Canada has been slow.