THE sky may well be the limit for future demand for vegetable oils,
according to Richard Matthews, former managing director of United
Oilseeds.
The demand will be fuelled -- almost literally -- by emergence of
biodiesel as a non-
polluting energy source, particularly for urban areas and by the
pent-up demand due to be unleashed by the Chinese.
Speaking at the Agra Europe Outlook conference in London, he predicted
this would lead to the area limitations for oil seed crops laid down in
the Blair House agreement being scrapped and the agreement torn up.
Even accepting the wide gap in production costs between ''black''
mineral diesel and biodiesel of up to 20p per litre, he said governments
would have to act because of the polluting effects of black diesel in
built-up areas.
''As more work is done the environmentally beneficial results of
biodiesel become more and more apparently. Where governments recognise
this -- in Austria, Germany, France and Italy -- so stimulus is being
given biodiesel production from oil seeds grown on set-aside land.
''It is only a matter of time that the evidence for restricting diesel
use in urban centres to biodiesel alone is so overwhelming that duty
concessions will appear and biodiesel will actually go to a premium at
the pump to black diesel. In turn this will mean that the production
requirement will run past what can be produced from set-aside land.''
If that was not enough, he predicted soaring demand from the 1.2
billion population of China which had already been the main driving
force in the upswing in world oil prices last year. This was on the
basis of an additional import of two million tonnes per annum against
their consumption of 10 million tonnes.
The trend would change the price relationship between protein and oil
from oil seeds in favour of the latter and thus generally in favour of
soft seeds such as oilseed rape. Rapeseed breeding for new values as
specialist uses has been able -- and will continue to be bale -- to
outstrip hard seeds such as soya beans.
''This will start to take rapeseed oil out of its traditional
positions as a commodity oil and divorce its value from soya bean oil
where breeding will never be able to respond in the same way and soya
bean oil will be left behind in the commodity sector,'' said Mr
Matthews.
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