FEED Business Worldwide - June 2012
Tight rapeseed supplies and the EU's biodiesel addiction 
by Eric J. BROOKS
While many are aware of the tightening world soy supplies, less attention is being paid to a similarly developing shortfall of its protein meal substitute, rapeseed. Unseasonably cold winter weather from Western Europe to Ukraine has dented the prospects for this year's EU crop. The USDA had already slashed this year's estimated crop from over 20 million tonnes to 19 million tonnes.
Now, continuing cold weather caused further harvest estimate cutbacks, ranging from Rabobank's 17.5 million tonnes to Oil World's projected 18.2 million tonnes. On their own, these downgrades appear to put the EU on course for its smallest rapeseed crop in six years. Rabobank cautioned that this estimate could be cut further, as winter weather destroyed up to 80% of the harvest in Eastern European nations such as Romania and Bulgaria.
The southern hemisphere's rapeseed harvest also looks relatively disappointing, with Western Australian government officials stating that, "Monthly rainfall was well below average for most of the agricultural area," adding that, "Subsoil moisture has declined in many areas and growers are waiting for breaking rains to allow planting to commence."
China hungry, no help from Canada
Of course, with Canada supplying nearly 70% of world rapeseed exports, a good Canadian harvest could, in theory, more than offset disappointing harvests in the EU and Australia. Superficially speaking, the news here is good: 2011/12's 14.2 million tonnes harvest was expected to be followed by a 15.4 million tonnes crop this year. However, thanks to good Canadian growing weather, analysts are now expecting harvest of over 16 million tonnes. The 1.8 million tonne or 13% increase over last year's Canadian crop could, in theory, more than make up for the EU's wintertime losses.
Unfortunately, several coincident factors offset Canada's capacity to come to the rapeseed market's rescue. First, the 2011/12's 14.2 million tonnes harvest was preceded by a poor 2010/11 harvest of 12.8 million tonnes. To meet its export commitments that year, Canadian rapeseed inventories were chopped by 59%, from last year's 1.72 million tonnes to 0.7 million tonnes at the end of the marketing year ending August 31st.
This means that Canada is not capable of meeting unusually strong demand from its rapeseed reserves; and this year's demand is poised to be exceptionally strong. China recently signed a rapeseed export liberalisation agreement with Canada, and is seeking to ease its heavy dependence on imported soy. This will see Canadian rapeseed exports to China rising by 72%, from last year's 930,000 tonnes to a USDA estimated 1.6 million tonnes in the next marketing year.
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