August 19, 2011

 

Germany affects EU rapeseed supplies

 

 

Germany's looming rapeseed crop failure is likely to restrict EU supplies in spite of positive outlooks in France and Britain, according to traders and analysts on Thursday (Aug 18).

 

"The German crop outlook is going from bad to worse, and the failure is likely to be so large that EU production of rapeseed oil will be restricted, thus, generating more imports," one rapeseed trader said.

 

If crop forecasts are confirmed in coming weeks, the lower harvest could confirm expectations of a major surge in EU rapeseed imports in coming months by the food and biofuel industries.

 

Germany's rapeseed harvest is likely to drop by 29.6% on the year to four million tonnes from 5.68 million tonnes in 2010, the German Farm Cooperatives Association now forecasts. In July, the association had forecast a 25.1% fall to 4.3 million tonnes.

 

German yields are likely to fall to 3.05 tonnes a hectare from 3.9 tonnes last year, the association said.

 

"German rapeseed suffered from the dryness in the springtime followed by the heavy rain throughout the summer," another trader said. "The harvest has still not been brought in, and between 20% and 30% of the rapeseed in the large north German production regions is still in the fields and suffering from rain almost daily."

 

Rapeseed oil content levels were hovering at or barely over the minimum commercial level of 40%, he added.

 

Some north German farmers were seeking to rescue their wheat from the rain by leaving the rapeseed even longer, which could be even worse for oil content, he added.

 

France's rapeseed crop is estimated to have risen this year after the last stages of the harvest revealed good yields, confirming plants had avoided significant damage from spring drought and heavy rain in July.

 

This could put France, traditionally the number two EU rapeseed producer, in the top spot ahead of Germany.

 

French farm agency FranceAgriMer and oilseed institute Cetiom estimate the 2011 crop at 5.3 million tonnes, up from 4.8 million tonnes last year. The farm ministry raised its forecast to five million from 4.5 million tonnes.

 

"Yields have really been a pleasant surprise, the market was not expecting that at all," said an analyst of French crop analysts Offre & Demande Agricole (ODA). "Yields in the north and east were very good and allowed the national average to climb."

 

He said that in the most northerly regions, many fields were producing over five tonnes a hectare, with peaks above six tonnes, although like elsewhere in France results varied widely.

 

With this summer's harvest now over, French farmers are preparing to start sowing next year's crop, with attractive market prices and reasonable soil conditions likely to support the rapeseed area in France, analysts said.

 

"Prices are attractive at over EUR400 (US$573) a tonne," Tallent said. "Farmers are more bearish about cereals with Russia coming back on to export markets."

 

Recent rain had alleviated soil dryness and should help sowing intentions to be fulfilled, he added.

 

In the UK, rapeseed yields are estimated at 3.6-3.8 tonnes per hectare, above the five-year average of 3.3 tonnes a hectare, crop consultants ADAS said.

 

"Yields have been better than expected," said ADAS.

 

Production is likely to exceed last year's record UK crop of 2.23 million tonnes due to a rise in planted area.

 

Britain's farm ministry last week projected that the rapeseed area in England for this summer's harvest was up 8% at a record 650,000 hectares.

 

German oilseeds analysts Oil World forecast that problems in Germany will largely be responsible for dragging the EU 2011 rapeseed crop down to 18.8 million tonnes from 20.58 million tonnes last year.

 

"I think higher EU imports of rapeseed and other oilseeds or vegetables in coming months are now a foregone conclusion," one trader said.