Australia's record canola crop and higher production forecasts for the EU are putting pressure on quotes
January rapeseed prices continued to slide, with February rapeseed futures yesterday in Paris down 2.3% to €564.25/t or $605.4/t, in line with last month's level but down 2 .5% less than the level of last year and 3.5% less than the level at the beginning of the year. Canola is entering the global market from Canada and Australia, putting pressure on prices, especially given the projected increase in planted areas in the EU.
According to Oil World forecasts, in 2023 EU countries will increase rapeseed production from 19.1 to 19.6 million tons in 2023 compared to the previous year due to the expansion of the sowing area from 5.85 million hectares to 5.94 million hectares, which is a 5-year maximum
Sowing areas will be expanded the most in France - from 1.23 to 1.31 million hectares and in Germany - from 1.08 to 1.15 million hectares, as well as in the Scandinavian countries, in particular in Denmark and Sweden, while in the Baltic countries they will be reduced by 7%, but the harvest there will still exceed last year's thanks to the recovery of yields.
ABARES experts predict that in 2022/23 Australia will harvest 7.3 million tons of rapeseed, which will exceed last year's record crop by 4%, thanks to an 11% increase in sowing area. Thanks to good rainfall throughout the season, the condition of the canola crop was the best in more than two decades, so the final harvest could exceed the official forecast. Rapeseed harvesting in the country should end in January.
In India, rapeseed planting is coming to an end and acreage may increase by 5% compared to last year, which will lead to an increase in production. The weather favors the development of plants, and harvesting will begin in March.
According to Statistics Canada, from August to December 2022, Canada exported 3.5 million tonnes of canola, which is only 20% higher than last year, although production in 2022 increased from the previous year from 13.8 to 19 million tonnes. indicates a decrease in export demand in the new season.
March canola futures on the Winnipeg exchange yesterday fell 1.1% to CAD 858.5/t or $641/t (-0.8% YTD), in line with last month's level.
In Ukraine, despite the shortage of offers, rapeseed purchase prices also decreased, as exporters almost stopped purchases at the ports, and demand on the western borders decreased following the fall in prices, which in two weeks fell by 20-30 €/t to 530-540 €/t DAP – Poland, Czech Republic and Germany. A mild winter favors the wintering of rapeseed crops, so despite a slight reduction in the area sown, production in 2023 may reach 2.6-3 million tons compared to 3.1 million tons in 2022.
