June 2, 2010
Global rapeseed production expected to take a downturn
Despite an increase in Canada's harvest, global rapeseed production is to fall for its first time in four years, potentially creating a squeeze on supplies of the oilseed in Europe, according to Oil World.
World rapeseed production will fall to 59.87 million tonnes in 2010-11, with declines in most major producers, the analysis group said in its first forecasts for the forthcoming marketing year.
Output in the EU, the world's biggest producer, will fall by 770,000 tonnes to 20.8 million tonnes with China's crop sliding by one million tonnes to 11.8 million tonnes.
While the fall in the global figure is small, at 100,000 tonnes, it contrasts with a USDA forecast that world rapeseed output will keep rising, and by nearly one million tonnes.
Oil World's assessment also forecasts a considerably larger Canadian crop of canola, the rapeseed variant, than many other analysts are predicting, and comes despite growing concerns over rain-caused setbacks.
"Very heavy rains last weekend caused flooding and will produce either damage or delays in spring planting," Agritel, the Paris-based consultancy, said, adding that 11 centimetres of rain had fallen in some provinces in two days.
"This could provide some support to rapeseed prices," Agritel said.
Even before the rains, the USDA was estimating Canada's rapeseed crop at 12 million tonnes, 600,000 tonnes shy of Oil World's estimate. Canada's farm ministry has estimated the crop at 11.7 million tonnes.
Oil World forecast that the stagnation in world rapeseed production would have major implications on the volume of the oilseed crushed. "It would also curb the growth in the availability of rapeseed oil and meal," the influential analysis group said.
This could present problems in particular for Europe's biofuels industry, which uses rapeseed oil as a key feedstock for making biodiesel.
The shortfall in product availability would be particularly evident in the second half of 2010-11, Oil World said. Prospects for EU using imports to prop up rapeseed supplies have also been dented by the likelihood of a smaller harvest in Ukraine, which has suffered high rates of winterkill in some crops.
