PARIS, Aug 2 (Reuters) – Strategie Grains maintained its outlook for higher rapeseed production in the European Union this year but warned that overall supply could remain tight.
In a monthly oilseed report, the consultancy kept its forecast for this year’s European Union rapeseed harvest almost unchanged at 17.03 million tonnes, 2.5% above estimated 2020 output of 16.61 million.
European farmers are in the middle of rapeseed harvesting, with output of the region’s main oilseed crop – used for making edible oil, biodiesel fuel and livestock feed – widely expected to surpass last year, though heavy rain in early summer has raised concerns over crop damage.
Despite the forecast production increase, EU rapeseed stocks by the end of the 2021/22 season are now expected to decline further from an already low level in 2020/21, Strategie Grains said.
The consultancy said this is because of prospects for reduced EU imports, owing to unattractive prices for Canadian and Australian supplies, as well as higher expected EU exports.
“The EU (supply and demand) balances still look tight in the new marketing year,” Strategie Grains said.
“The situation is bullish for EU prices, especially as the world rapeseed and rapeseed oil situation is still in deficit.”
Drought and heatwaves in top exporter Canada have brought fresh uncertainty to the market as it grapples with strong demand for edible oil, notably from China.
The European Commission last week raised its forecast for EU 2021/22 rapeseed production by 200,000 tonnes to 16.9 million tonnes while lowering projected imports by the same amount.
The average rapeseed price at Rotterdam in the 2021/22 season, which started in July, could reach 525-530 euros a tonne, exceeding last season’s level, Strategie Grains forecast.
High prices could encourage European farmers to expand the rapeseed area in the coming planting period “at levels not seen in a long time”, it added.