July 18, 2012

Oil World ups global rapeseed production forecast

Oil World oilseed analysts based in Hamburg said on Tuesday (July 17) that estimate of the global 2012/13 rapeseed crop is raised by 0.3 million tonnes to 61.9 million tonnes,  an increase from 59.63 million tonnes in 2011/2012.

With buyers seeking alternatives to tighter soybean supplies, high export demand for rapeseed, also known as canola, is likely to keep prices high in coming months, it said. Rapeseed futures in Paris hit an all-time high on Monday (July 16) as weather concerns about grains and oilseeds crops, most notably in the US, fuelled buying.

Frost damage to rapeseed crops in several countries was not as serious as expected, Oil World said. "Crop prospects have recovered in the European Union and CIS (Commonwealth of Independent States) countries, primarily in France, Germany and Ukraine," it said.

Oil World raised its forecast of Germany's rapeseed harvest this summer by 0.2 million tonnes to 4.70 million tonnes, which is up from the 3.87 million harvested in 2011. Forecast of France's harvest this summer is raised by 0.1 million tonnes to 5.20 million tonnes, which is still down from 5.37 million tonnes harvested in 2011.

Oil World raised its forecast of Ukraine's crop this year to 1.05 million tonnes from 0.95 million, but the figure was still down from the 1.39 million Ukraine harvested last year.

Rapeseed is likely to gain more global buying interest after weather damage to soybean crops in South America and the US, Oil World said.

"We expect more aggressive Chinese purchases of Canadian canola (rapeseed) in the first half of the season to at least moderate the shortage of soybeans," it said. "But if more Chinese buying occurs, it is likely to have a bullish impact on canola prices, because the resulting insufficient world export supplies would enforce demand rationing in other importing countries, primarily Pakistan, the United Arab Emirates and/or the European Union."