In a letter sent to the EU executive yesterday (April 22), the EU farming trade group, Copa and Cogeca, expressed its concerns about the potential consequences of the Covid-19 crisis on the vegetable oils, biodiesel, protein-rich by-products sectors that produce rapeseed and sunflower meals and DDGS, as well as the EU ethanol industry.
“Faced with falling European production and social distancing measures in the EU and worldwide due to the pandemic, protein-rich plant by-product markets risk entering into a phase of greater instability, as a result of lower demand in the biofuel sector and lower EU production of protein crops. In this context, the European farmers and cooperatives organizations are calling for a set of rapid actions that could limit major disruptions.”
Reduction in protein crop planted area
EU rapeseed production for the marketing year 2020/2021 is expected to reach around 17m ton due to a reduction in planted area. The planted area with protein-rich crops is around 30% below its highest level in 2017/2018, reported Copa and Cogeca.
Moreover, the EU farming representatives warned there could be possible disruptions in the supply of oilseeds from the main producing countries – the US, South America and India – if the COVID-19 pandemic accelerates in those regions.
Against this backdrop, Pedro Gallardo, Copa-Cogeca’s oilseeds and protein crops working party chairman, said the best way to increase EU production in the short term would be for the EU Commission to accept the temporarily lifting of some constraints on the use of plant protection products (PPPs) for nitrogen fixing crops in ecological focus areas.
“This approach would increase our domestic production of soy, peas, beans and lupines on land beyond the areas receiving support in the form of voluntary coupled support.”
The EU’s supply in protein-rich co-products of non-GMO origin could be impacted by the decrease in biofuel production from EU origin raw materials such as rapeseed and sunflower, said the farming group. This situation, it continued, could be further aggravated in the coming months if vegetable oils accumulate due to containment and social distancing measures and knock-on effect on biofuel consumption due to limitation of transport. A saturation of storage capacity for vegetable oils would have an impact on the European crushing industry, and hence on the supply of meals in the EU, it added.
Safeguards against ethanol imports sought
Due to the containment, fuel consumption and crude oil price have collapsed, and demand in biofuels is following suit. If no measures are taken, huge volumes of American and Brazilian ethanol will flood the EU internal market, which will jeopardize not only the European ethanol sector, but also the EU non-GM feed sector which is supplied with protein-rich plant by-products like DDGS, cautioned Copa and Cogeca.
Alexander Bachler, Copa and Cogeca’s bioenergy working party chairman, also called for efficient safeguard measures against ethanol imports from the US or Brazil.
“We must refuse requests for a temporary suspension of tariffs on ethanol. We must maintain the anti-dumping and anti-subsidy measures that currently apply to biodiesel (B99) imports from the US. Finally, we should not give in to pressure to reduce incorporation of certified sustainable biofuel produced from EU arable crops and immediately implement in the Member States the delegated act to reduce biofuels with a high ILUC risk.”