April 27, 2011
 

 

The rapeseed complex will continue to stay as a costly one, although Canada, the top exporter, said that its farmers plan to grow a record area of rapeseed, major analysts said.

 

Oil World said that the unusual price premiums that rapeseed oil was garnering in Europe would continue to set the tone, given the poor prospects for the region's rapeseed harvest which is coincidentally the world's biggest.

 

"Prices of rapeseed and products are likely to stay comparatively firm in the foreseeable future," the Hamburg-based group said, noting that there is considerable rapeseed crop deterioration in the EU.

 

"We expect that rape oil prices will continue to stay above soyoil and sun oil during the remainder of 2011."

 

The crop in Germany has suffered particular setbacks, from both cold winter weather and a dry April, leaving it on track to fall by 850,000 tonnes to 4.9 million tonnes this year, losing to France as the first place among European producers.

 

The price forecast came even as Canada revealed that its farmers intend to lift canola sowings by 14.3% to a record 19.2 million acres, a fifth successive year of increased plantings of the rapeseed variant.

 

In the major agricultural province of Saskatchewan, seedings will rise by more than one-quarter to 9.8 million acres.

 

The data were at the top end of analysts' forecasts of a number between 17 million and 19.3 million acres, and above a farm ministry figure last month of 7.5 million hectares, or 18.5 million acres.

 

However, Oil World highlighted prospective planting problems in Canada, where heavy snowmelt and a wet spring have set back the start of spring sowings.

 

In the UK, the Home Grown Cereals Authority said that flood issues may mean overall Canadian area may not reach the record levels previously expected.
 

The forecasts come at a time when the EU is attempting to increase use of rapeseed-based biodiesel deemed as from sustainable sources, in an effort to reduce the region's emissions of greenhouse gases.

 

Filling the shortfall may mean importing more rapeseed from the Ukraine, and may make it harder for EU states to manufacture sufficient biodiesel to meet targets, Oil World said.

 

The data from Canada's official data office, StatsCan, showed the country's acreages of most major crops rising this year from 2010 levels, which were depressed by heavy rains.

 

Wheat sowings are expected to jump by 17.4% to a three-year high of 24.7 million acres, higher than the 22.6 million acres that the farm ministry forecast last month.

 

However, StatsCan highlighted that its data, taken from a farm survey in late March, was open to revision.

 

"Some farmers indicated they were still undecided about their final strategies for 2011," the office said.

 

Rapeseed for May stood EUR0.25 (US$0.37) lower at EUR470/tonne (US$690) in afternoon deals in Paris. The oilseed in January hit a record EUR521.75/tonne (US$766.14).