June 17, 2011

 

Rains too late to help drought-hit EU rapeseed crop

 

 

Rain in the past two weeks came too late to save parched rapeseed crops in the EU's top producers Germany and France, analysts said on Thursday (Jun 16).

 

The rapeseed crop in No.3 producer, the UK, could approach record levels but the EU will still have to import rapeseed, rapeseed oil, and biodiesel in the coming months, traders said.

 

The 2011 rapeseed crop in Germany, traditionally the EU's largest producer, is likely to fall 24.5% to 4.33 million tonnes, down from 5.73 million tonnes in 2010, Germany's farm cooperatives association said.

 

Recent rains were too late to help plants suffering the double blows of a spring drought and hard winter, the association said.

 

The return of rain to drought-hit French rapeseed was also too late to benefit plants as growth is largely complete and harvesting is starting but the picture is not so bad compared to Germany.

 

Analysts Offre & Demande Agricole (ODA) estimate France's 2011 rapeseed crop at 4.4 million tonnes, down 8% on 4.8 million last year. This is in line with the French farm ministry's forecast while trade estimates are averaging around 4.6 million tonnes.

 

French rapeseed harvesting has started earlier than normal, although traders said initial cuttings on the west coast were too limited to judge final yield prospects.

 

"In the north and east of France fields are very mixed, with a big difference in yield potential depending on soil depth," said Edouard Tallent of ODA. "The first harvested fields had disappointing yields but this remains to be confirmed."

 

Dryness is set to reduce the yields of the UK's rapeseed crop although the impact is expected to be balanced by a rise in planted area, leaving production just below last year's record levels.

 

The UK's National Farmers Union (NFU) estimates a rapeseed crop in England of 2.03 million tonnes, marginally below last season's 2.05 million but well above the five-year average of 1.76 million.

 

England accounted for about 94% of the UK's rapeseed crop last year when a record total of 2.19 million tonnes was harvested.

 

The NFU projected winter rapeseed said yields in England would average 3.1 tonnes per hectare, down 9 % from the five-year average of 3.4 tonnes. Last season the yield was 3.5 tonnes.

 

"Winter oilseed rape appears in a slightly stronger position than for cereals," the NFU said.

 

With signs of a lower EU rapeseed crop intensifying, traders expect heavy imports to compensate.

 

"Larger rapeseed imports look inevitable," one trader said. "Ukraine and Australia are likely to benefit from big EU purchases."

 

Ukraine looks able to fill at least part of the gap as the exporting country is forecast to increase its 2011 rapeseed harvest to 1.59 million tonnes from 1.47 million in 2010 and at least 1.5 million will be exported, agriculture consultancy UkrAgroConsult estimates.

 

Traders also expect more rapeseed oil and canola oil imports from east Europe and North America.

 

EU biodiesel producers, largely using rapeseed oil as a feedstock, will also have to seek alternative supplies.

 

"I think we will see more biodiesel imports along with more EU purchases of soyoil and palm oil to replace rapeoil in biodiesel production," a dealer said.