The report predicts that European soy output is forecast to jump by 13.7% to 9.1m metric tons (MT).
The publication, which is based on official data, interviews and author expertise, was produced by the Danube Soya Association, an Austrian headquartered group that promotes non GM soy cultivation in the EU and a migration away from reliance on third country protein imports.
The group provide estimates, forecasts and analysis for the European soy market with special focus on the Danube Soya Region and GMO-free products.
The greatest expansion in terms of hectares in Europe, said the authors, is expected to be in Ukraine (+87,000 ha) where the soy area is projected to hit a new high of 2.2 million hectares this year after three years of continuous growth.
The increase in soy cultivation in Ukraine is mainly driven by the relative profitability of soy compared to grains and rapeseed in the country, they noted.
“Producers tend to switch to less input intensive crops such as soy in reaction to the lack of credit caused by the financial instability in the Ukrainian economy. Also, the strong demand from exporters in the country as well as excess domestic crushing capacity is keeping farm-gate prices relatively high and makes soy attractive to Ukrainian farmers,” said the team behind the report.
GM free soy production
Meanwhile, soybean production in the Danube Soya GM free cultivation region is set to grow 1.8% to 1.9m hectares in 2016, and output is forecast 17.1% higher to 4.3m MT, claimed the publication.
Danube Soya certified soy volume is likely to see more than 57% growth and reach 130,000 MT, predicted the authors.
And the first volumes certified to Europe Soya, a new scheme analogous to the Danube Soya standard but covering wider regional criteria, are expected to reach the market at the end of 2016, they said.
Figures for 2015
Soy production in Europe grew by 6.3% to 8m MT in 2015 versus a year earlier.
The additional output was due to the larger planted area (+21.4%) mainly driven by favorable market conditions for soy and new CAP subsidies, said the compilers of the report. But the expansion in hectares last year was partly offset by lower yields caused by extensive droughts in the region, they added.
New CAP rules that came into force in 2015 provide EU member states with the option to grant limited amounts of coupled for protein crops, including soy, on top of basic direct payments. The amount of the subsidy varies by country from €40 (USD $44) to €417 per hectare. Countries where soy farmers get such backing include Bulgaria, Croatia, France, Hungary, Italy, Poland, Romania, Spain and Slovenia.
Soy prices
Soy prices in Europe greatly depend on crop news from overseas and closely follow rate changes on the Chicago Board of Trade (CBOT).
The authors report the premium of non-GMO soymeal of European origin at Rotterdam port remained in the range of €30 to €50 per Mt over the price of imported GMO soymeal from October 2015 to May 2016.
Though non-GMO premiums are forecast to decline in the second part of 2016 due to growing GMO-free soy output and the expansion of non-GMO soy crushing capacities in Europe, they said.