Update prepared by ISTA Mielke GmbH – Global Oil World analyses and forecasts for oilseeds, oils & fats and oilmeals in Hamburg, Germany. On www.oilworld.de more details are provided about the company profile and the individual services.
The global rapeseed market is currently in transition from old-crop supplies to the 2023/24 production outlook. Improved production prospects and comparatively large old-crop stocks are likely to keep EU rapeseed supplies elevated in 2023/24. However, price prospects and the outlook for global export supplies of rapeseed & canola are still uncertain, with planting progress and soil moisture supplies in Australia and Canada the key swing factors to watch in coming weeks.
EU-27: Rapeseed Supply Changes (Mn T)
Widespread rainfall across most growing regions (except for northern Italy and Spain) in March and April has significantly improved moisture supplies for the emerging rapeseed crops, setting the stage for an increase in EU production by an estimated 0.5 Mn T to 19.8 Mn T in 2023. High yields achieved in 2022 and soaring world market prices during the 2021/22 season prompted EU farmers to further expand winter rapeseed sowings last year, potentially lifting this year’s harvested area to 6.0 Mn ha, up 0.13 Mn ha on the year and about 0.4 Mn ha or 8% above the recent 5-year average.
German rapeseed production is expected to increase by about 0.2 Mn T to a 7-year high of 4.5 Mn T in 2023, based on the assumption of an 8% increase in the area but a marginal decline in the average yield to 3.85 T/ha (vs. 3.95 T/ha last year and the 5-year average of 3.49 T/ha).
Production in France is pegged at 4.6 Mn T (vs. 4.5 Mn T last year), also assuming a larger area and a setback in the average yield from last year’s exceptionally high level. Increases are also shaping up in Romania, Hungary, the Czech Republic and the Baltics, while rapeseed production is set to decline in Spain.
WP Stats EU Rapeseed Prod. Area and Yield
Canadian farmers are expected to favour grain and oilseed plantings at the expense of pulses, e.g. lentils or peas, this spring. In its planting intentions report, Statistics Canada has pegged this year’s wheat area at a new high, while canola plantings are forecast to increase by less than 0.1 Mn ha to 8.74 Mn ha. However, these preliminarily estimates have to be taken with a note of caution as they are based on a survey send to farmers. Actual Canadian canola plantings exceeded the planting intentions by 0.2 Mn ha in 2022. Latest OIL WORLD projections place Canadian canola plantings at 8.83 Mn ha this year, setting the stage for a further increase in the canola crop to a 5-year high of 20.1 Mn T in 2023/24.
Large production and export supplies of the major seed oils partly met subdued demand of late owing to the accumulation of large stocks in recent months. Rapeseed oil prices in Rotterdam declined to only US-$ 1000 in April, down from $ 1229 in Dec 2022 and sharply below $ 2223 a year earlier. Primarily demand from EU biodiesel producers has turned out disappointing in the first four months of this year. Following the phasing-out of palm oil-based biofuels in key EU member countries this year, most market participants had expected a pronounced increase in rapeseed oil usage to meet the GHG emission targets. However, large imports of advanced biofuel from China, curbed demand for domestically produced conventional biofuels. Rapeseed oil demand prospects will be a key price-determining factor for EU rapeseed in July/Dec 2023.
Support for vegetable oil prices may emanate from subsiding production growth in coming months as well as from considerable consumption growth in key biodiesel producing countries but also in the food sector. The risk of El Niño conditions and possible repercussions on palm and lauric oil production in 2023/24 will probably affect the buying policy of consumers as well as prices in the months ahead.