European consumers opt for non-GMO oils

Lower crude soyoil prices are not tempting west European consumers, who continue to prefer other soft oils that do not contain genetically modified organisms (GMOs), dealers said on Friday. But there had been a fair amount of sales by refiners directly to Russia, they added. The discount of nearby soyoil to rapeseed oil deepened to 65 euros on Friday from 48 euros in late August and 28 euros in early August. Weak demand in western Europe could send the differential widening towards the 100 euros level seen in May and June, another broker said. November/January delivery degummed soyoil was offered on Friday at 410 euros per tonne, fob ex-mill, compared to rapeseed oil at 475 euros. The October position was not being quoted since nearby crude supplies were tight. "With the GMO thing in the background, many players still prefer rapeseed even with the price difference,"​ a Dutch broker said. Most western European consumers are wary of GMOs in their food so food manufacturers have switched to raw materials free of the organisms. A majority of soy crops in the United States and Argentina are planted with GM crops, while GM species have not been introduced in other oilseeds. Consumers in Russia and other former Soviet republics are less concerned about GMOs and European oil refiners are selling good quantities directly there, bypassing the trade. Soyoil prices shot up along with the rest of the vegetable oils complex earlier this year, with nearby prices surging 60 percent from late May to 520 euros in late July. Since then, prices have given up about half of the gains. Prices were attractive currently, but harvest pressure and the uncertain economic environment would likely keep a lid on prices in the near term, dealers said. European prices were being also capped by competition from imported Argentine soyoil. "I think we will have a boring situation in the near term, but in the medium term prices should go higher due to the upcoming tight situation in rape oil and sun oil, which should lift the whole complex,"​ another broker said. Industry newsletter Oil World forecast this week that combined rapeseed and sunseed crushing for the 2001/02 (Oct-Sept) seasons will fall to 55.57 million tonnes from 57.59 million the previous season. But soy harvests and crushing were set to expand. Higher margins in soybean processing boosted output in the European Union by 19 percent in April to September. Global soybean crushing in October to December is seen rising to 40.36 million tonnes from 37.12 million in the same period last year, Oil World said.