Bulgaria.Oilseeds Market Update June 30, 2016
Bulgarian farmers increased rapeseed planted area by 5% and soybean area was reported to decline by 42%. No change in the sunflower area, industry sources and FAs/Sofia estimates see a slight increase at the expense of lower corn acreage.
Sunflower planting has been done at a much faster rate than in the previous season and in the optimum timeframe and as of end-May planted area was reported at 10% higher than in 2015. The spring weather conditions to date have been very good with abundant rainfall and mild temperatures which provided an optimistic start for sunflower and soybeans, and increases the yield potential for rapeseed. FAS/Sofia projects higher than previously expected average yields for rapeseed, sunflower and soybeans. Total oilseeds production is forecast to reach about 2.4 MMT or 8% more than in the last season.
MY2015/16 oilseeds exports have accelerated in April and May. As of mid-June 2016, the country has exported 319,000 MT of rapeseeds and 492,000 MT of sunflower seeds. Exports of sunflower meal and oil have declined due to lower crush.
The weather conditions in March, April and May were very favorable for crop development with abundant rainfall and average temperatures. Winter rapeseed crop is in very good condition, well-advanced with high biomass accumulation. Farmers began the harvest around June 20. The spring planting started about a week later due to rains at the end of March but quickly accelerated in April and slowed down in early May again due to frequent rainfall. Most spring planting works were done in the optimum timeframe. The temperatures were favorable, cooler at the end of March, above average in April and slightly below averag in early May. Precipitation exceeded the average by 40 to 70 mm between 1 April and 15 May.
In the first half of May there were also hail storms in some locations which caused crop losses. The soil conditions are adequate with good surface and sub-surface moisture reserves. The cumulated precipitation reached 100 mm almost everywhere in Bulgaria, exceeding the average by 50 to 100%. These conditions were excellent for emergence, sprouting and development of the spring crops and ensure a promising start for corn and other minor spring grains. Very high temperatures in mid-late June began to affect the soil moisture reserves but may be still sufficient to provide good conditions for sunflower yield formation in July. Provided that the weather cooperates in the remainder of the season, the country will likely have higher average yields for both winter and spring oilseed crops.
The trend for higher planted area under rapeseed by 5.0%, flat planted area under oil-bearing sunflower and 32% lower area under confectionary sunflower. Soybean planting was reported sharply down by 41.8 % as of early June. The weekly MinAg data is not statistically proven and is often found to be below actual planted harvested area and production. While this data confirms traders' reports about rapeseeds and soybeans area, industry sources have indicated higher planted area under oil bearing sunflower at the expense of declining corn area.
Based on the above developments, FAS/Sofia revises upward its yield and production estimates for the three major oilseed crops for MY2016/17. FAS/Sofia currently projects higher rapeseed and sunflower area, yield and production; lower soybean area but with the expected growth in average yields and production, total oilseeds production is currently forecast to reach about 2.4 MMT or 8% more than in the last season.
Farmers planted less soybean area compared to MY2015/16 and the current FAS/Sofia estimate is for 25,000 HA, a 26% decline over MY2015/16 due to disappointing yields and market prices in MY2015/16. Private industry estimates for area vary from 25,000 HA to 35,000 HA. Yield estimates are currently in the range of 1.3 MT/HA - 1.5 MT/HA compared to 1.18 MT/HA in the previous season due to more favorable weather. FAS/Sofia yield estimate is at 1.4 MT/HA. Total production is currently estimated by FAS/Sofia at 35,000 MT while some industry estimates are approaching 53,000 MT.
Rapeseed area has increased marginally by estimated 3% to 175,000 HA. Yield estimates are currently in the range of 2.43 MT/HA to 2.91 MT/HA compared to 2.48 MT/HA last year. FAS/Sofia current estimate is at 2.62 MT/HA. Production estimates are in the range of 430,000 MT-500,000 MT. FAS/Sofia expectations are for 460,000 MT.
Projections about sunflower planting are for a growth in the planted area compared to MY2015/16 up to 840 HA, similar to the levels achieved two seasons ago. Farmers are likely to favor growth in sunflower area at the expense of corn due to promising returns and stable prices as well as favorable domestic and export demand. The timely planting along with favorable weather promises a very good start for the new crop. FAS/Sofia currently estimates growth in oil-bearing sunflower planted area conservatively at 1.2% to 820,000 HA. Yield estimates are currently in the range of 2.2 MT/HA to 2.4 MT/HA. FAS/Sofia estimate is at 2.26 MT/HA compared to the average yield last season of 2.1 MT/HA. Production expectations are in the range of 1.8 MMT to 1.9 MMT, and FAS/Sofia projects 1.85 MMT.
Trade: Imports of soybean in MY2015/16 (October 2015 – March 2016) were 16,600 MT, almost all imported from Romania. Exports are at 3,600 MT, mainly to Turkey. Trade in soybean meal was at 63,000 MT and exports at 6,700 MT, again with the major partner Romania. Imports of soybean meal for the first half of the year were 7% higher than in the corresponding period in MY2014/15 due to favorable local demand by the poultry and pork industries.
Trade: WTA data is for exports of 294,000 MT while official MinAg and industry estimates are at 319,000 MT exported by June 20. Current estimates for MY2015/16 exports are at 320,000 MT to 360,000 MT. FAS/Sofia estimate is for 330,000 MT.
Stocks: Lower crush this year is likely to result in higher ending stocks in MY2015/16. The MinAg tentative data as of June 20 shows available stocks in the country at 72,000 MT.
Exports to date have been sluggish due to aggressive local purchases . Exports are currently forecast at about 900,000 MT compared to above 1.0 MT in MY2014/15. Overall, Bulgaria is increasingly shifting from exporting to more domestic processing, and from exports of oil-bearing sunflower seeds to more diversified exports of value-added processed products. WTA data for October 2015 - March 2016 is for exports of about 393,000 MT. The MinAg and industry estimates are at 492,000 MT exported by June 20. On the other hand, the crush is estimated to be depressed due to not very attractive margins. Exports of processed products (meal and oil) in the first half of the marketing year showed a decline of 36% for both products compared to a year ago.
The MinAg tentative data as of June 20 shows available stocks at 1.08 MMT either to be exported (in addition to already exported 492,000 MT) and/or for ending stocks. If crush and/or exports do not accelerate in June - August, the country may have extra ending stocks