February 15, 2012

Oil World cuts Ukraine's rapeseed crop forecast

Given the double blow of harsh winter weather and an autumn drought, Oil World has cut the forecast for Ukraine's 2012 rapeseed crop to 1.05 million tonnes, from 1.38 million tonnes last year.

"This reflects very dry autumn conditions due to which more than 20% of the Ukrainian rapeseed area failed to emerge and recent winter kill temperatures, potentially resulting in additional irreversible damage to the already low crop," the Hamburg-based oilseeds analysts said Tuesday (Feb 14).

Ukraine is a key rapeseed exporter, especially to Western Europe and any fall in its crop will be bad news for edible oil and biodiesel producers.

In January, Oil World had still forecast Ukraine's 2012 rapeseed crop at 1.13 million tonnes.

Ukrainian analysts said on Thursday the fierce cold spell this winter has killed most of the winter barley and winter rapeseed crops and seriously damaged wheat in Ukraine's eastern and southern regions but gave no precise crop forecasts.

In Ukraine and parts of Russia's south, crops lack a deep enough layer of snow to protect them from February temperatures of about minus 25 degree celsius.

"World production of rapeseed and canola will hardly recover in the 2012-13 season and probably fall again short of global demand," Oil World said. "This is mainly attributable to the poor state of winter crops in the European Union and neighbouring Ukraine."

There is concern the exceptionally cold weather has caused damage to rapeseed in Germany and Poland, which together contribute about 30% of the EU crop, Oil World said.

But it is still too early to assess damage in the two countries and some observers still hope crops will escape unscathed, it said.

Oil World still currently forecasts the EU's 2012 rapeseed crop will rise to 19.7 million tonnes from 19.11 million tonnes in 2011.