The rally in Paris rapeseed prices gathered pace, sending prices to their highest since 2008, as fears for the impact of a wet spring on Canadian canola sowings.

 

Rapeseed rose nearly 3% to EUR334 (US$410) a tonne for August delivery, a contract high, and the best price for a near-term lot for 19 months.

 

The rises reflected the impact of Canada's sodden spring - which the Canadian Wheat Board estimates will leave up to 12.5 million acres of cropland in the west of the country unsown – on hopes for production of canola, the rapeseed variant.

 

Canada's canola crushers have expended crushing capacity, and to keep those plants running they need to buy enough in the domestic market, which will limit export availability, analysts said.

 

The country's farm ministry last month estimated domestic canola use jumping by 21% to nearly six million tonnes in 2010-11, with exports falling 7.1% to 6.5 million tonnes.

 

A slide in exports is unlikely to have a direct impact on Europe as it operates strict curbs on biotech crops, which comprise the great majority of Canada's canola/rapeseed harvest.

 

However, it would encourage other importers to raise their rapeseed prices, so lifting the whole market.

 

The real danger for Europe is if higher world prices take Ukrainian exports away from Europe to another market, analysts added.