April 18, 2012

EU 2012 rapeseed crop to drop to a five-year low

With crops in several countries suffering from the especially cold winter, EU's 2012 rapeseed crop will fall to a 5-year-low of 18.48 million tonnes from 19.1 million tonnes in 2011, Oil World said on Tuesday (Apr 17).

"A disaster is shaping up for this year's rapeseed production in some parts of the EU," Oil World said.

The new estimate is sharply down from Oil World's previous 2012 EU crop forecast of 19.2 million tonnes on April 10. Deep frosts this winter in late February have damaged rapeseed plants in some countries following poor development after a dry autumn in some regions, it said.

"Alarming reports have been received in recent days from Germany, Poland and France, pointing to greater than expected damage from winter killing," it said.

EU benchmark rapeseed futures in Paris touched 14-month highs on April 10 because of fears about winter damage to European crops coupled with expectations of poor South American soy harvests. Oil World said it expects major rapeseed crop losses in the eastern EU.

Poland's crop will fall to 1.85 million tonnes from 1.87 million tonnes last year, it said. Lower crops are shaping up in Romania, Bulgaria and Hungary, it said. Germany's 2012 crop still is forecast by Oil World to rise to 4.4 million tonnes from the weather-reduced 3.8 million tonnes last year. France's harvest is likely to fall to 5.2 million tonnes from around 5.3 million tonnes, it said.

With drought in Britain now following the cold winter, the British crop is likely to fall to 2.6 million tonnes from 2.7 million tonnes, it said. The disappointing crop means EU rapeseed supplies will again be tight in the upcoming 2012-13 season with EU rapeseed crushings likely to decline, it said.

"We consider it unlikely that EU imports can be raised sufficiently to offset reduced domestic production," Oil World said.