HAMBURG (Reuters) – Oil World has cut its forecast of the global 2010 rapeseed-canola crop to 56.07 million tonnes from 59.87 million tonnes in 2009.
Stocks at the end of the current crop year will likely fall to less than five million tonnes, the smallest amount since 2007-08.
“With import requirements of the European Union rising and export supplies of the CIS (Commonwealth of Independent States) countries declining, the global market will become more dependent on Canadian canola in 2010-11,” Oil World said.
It did not change its outlook for Canada’s canola crop, which is forecast at 10 million tones. Oil World said Canadian canola stocks are likely to fall to one million tonnes in July 2011 from 1.38 million tonnes this year.
Agriculture Canada’s July forecast is for a 10.5 million tonne crop and stocks at the end of the 2010-11 crop year to fall to 750,000 tonnes.
European Union rapeseed crops will be lower than expected. Since the beginning of June, November canola futures have risen about 20 percent, first on the wet weather and seeding problems in Canada and then on the heat and drought in Europe and the former Soviet Union.
Oil World now estimates the EU 2010 rapeseed crop at 19.92 million tonnes, down 1.7 million tonnes on the year.
“This is going to have a severe impact on the EU market. The European rapeseed crush is expected to decline by at least 1.2 million tonnes to 21.5 million tonnes in July-June 2010-11,” said Thomas Mielke , lead Oil World analyst. “So demand rationing will be inevitable. Rapeseed oil prices are going to widen their premium over competing vegetable oils.”
Oil World believes global canola consumption in 2010-11 will exceed production, causing ending stocks to fall.
It put consumption at 57.7 million tonnes, down from 60.34 million tonnes in 2009-10.
Global rapeseed stocks were likely to fall to 4.96 million tonnes from 6.59 million tonnes last year.