The report is the first in a series of quarterly reports aimed at food and feed producers as well as retailers, in order to inform them about the status of the market, about availability, prices and demand.
The report finds that the availability of local Non-GM soybean in the EU is expected to greatly improve in the 2023/24 marketing season, as the result of a record harvest in the region. Experts forecast that Brazilian Non-GM soy production is likely to reach almost 3 million t in the current marketing season (2023/24).
In addition, low Non-GM premiums and moderating food inflation in the EU is likely to lead to good demand for Non-GM products this season. All three crops featured in this market report – soybean, maize & rapeseed – look well supplied both in the EU and on the global market in 2023/24, which will impact prices in the longer term.
Non-GM soybeans: EU output
EU soybean output is forecast to grow to a record 3 million tonnes in 2023, up 33% (+ 740,000 t) against 2022, due to higher yields. Soybean yield in the EU is projected to be above the 5-year average in 2023. The record crop in the EU/Europe should mean, in the short term, greater availability of local (and regional) Non-GM soybeans within the EU, as well as further improvement in the Ukrainian export potential of Non-GM soy to the EU.
Non-GM soybean and soymeal prices
EU Non-GM soy prices have declined over the last 3 months, driven by forecasts for an abundant soy output and stocks in the global soybean market for the 2023/24 marketing season. Non-GM soybean was traded for 410 EUR/t at the Bologna Exchange in late October. This price level is 20% lower when compared to prices at the end of August. Non-GM soymeal premiums in the EU remained relatively stable and at historic low levels over the recent half year.
Non-GM soy production in Brazil
In Brazil, which is the biggest soy producer worldwide, a record soy area is predicted in the current season (2023/24). Experts forecast that Brazilian Non-GM soy production is likely to reach almost 3 million t in the current marketing season (2023/24). This volume is similar to the previous year and should be enough to supply all current export programs to Europe in 2024 (Europe is the main destination of Non-GM soy materials produced in Brazil).
At the start of the sowing period in September, several economic factors affected the decision of Brazilian farmers whether to plant GM or Non-GM varieties this season, including the current low level of Non-GM soy premiums in Europe, the seed costs of Non-GM varieties, which have declined over the last three months in Brazil, while GM seed prices have climbed. In the previous season, Non-GM yields reached higher levels than their GM peers. This happened for the first time in history, since GM soy varieties became mainstream.
Demand for Non-GM soy in the EU
Non-GM soy demand in Europe is likely to remain stable throughout the 2023/24 marketing season because of great availability of local (European) Non-GM soybean from the 2023 harvest. In addition, low Non-GM soymeal premiums make Non-GM feeding programs more attractive and there is increasing demand for regional and deforestation-free materials in Europe. There is also now increased processing capacity for Non-GMO soy via ADM’s new crushing plant in Mainz, Germany. And finally, EU food inflation is expected to moderate compared to levels in 2022/23 which should have a positive impact on demand.
The overwhelming majority of maize in the EU market is Non-GM. The share of GM is roughly 1% of the EU’s domestic output and roughly 20% of the EU maize import. Maize output in the EU-27 is forecast to expand to 59.9 million t in 2023, up 12.7% compared to 2022. Euronext maize price moved at 202 EUR/t at the end of October, down 4% versus one month earlier. A key watchpoint on the maize market is the harvest progress in the USA and the situation in the Black Sea region. EU maize import is likely to remain at a relatively high level of 25 million t in the 2023/24 marketing season. When it comes to supply, there is unlikely to be a shortage of Non-GM feed grain in the EU throughout the 2023/24 marketing season. The recovery of the EU maize crop and the export potential of Ukraine ensure that EU Non-GM maize demand is covered.
As with maize, Non-GM is the standard quality in the EU rapeseed market. Rapeseed output in the EU-27 is estimated at 19.8 million t in 2023, up 1% (+ 200,000 t) from last year’s harvest. Rapeseed supply in the EU, therefore, remains comfortable for the 2023/24 season after a relatively good harvest and excessive stock build-up from the previous season. Euronext rapeseed price continued to drop and moved to 421 EUR/t at the end of October. The global market looks well supplied for the 2023/24 season, with expected strong outputs in the EU, Ukraine, Canada and Australia in 2023/24. This will put downward pressure on prices. In the longer term, the global rapeseed market looks well supplied.
Read the full report here.