PARIS, France (Reuters) – European rapeseed stocks are expected to hit a 20-year high this year but the impact on prices should be limited because of managable world supplies and a large demand that is anticipated next season, traders and analysts said last week.
Stocks have been building due to a bumper crop in 2004, insufficient crushing capacity, ample global supplies worldwide and a high exchange that has affected European trade.
A majority of traders and analysts pegged EU stocks at between 1.1 and 1.2 million tonnes at the end of the month.
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This would be much lower than German oilseeds newsletter Oil World’s latest estimate of 1.44 million tonnes for 2004-05 but still far bigger than the 230,000 tonnes last season.
“We have not seen stocks like that for at least 20 years,” a French trader said.
Oil World analyst Siegfried Falk said the stocks, although substantially higher this year, would have only a moderate impact on the new season.
“The 1.44 million tonnes is not excessively large in view of the large requirement of the EU crushing industry,” he said.
Falk said rapeseed processing in Europe would rise above 14 million tonnes in 2005-06, up from 13 million this season.
“In view of this, stocks are not disproportionately high compared to demand.”
In Britain, leftover stocks were expected to stave off imports next season, added Josh Dadd, an oilseeds specialist at Britain’s Home Grown Cereals Authority.
“It’s really difficult to gauge what might be left in the market,” Dadd said.
“However, there is talk that there is going to be more rapeseed carried over from this season and the argument goes that this might offset what we typically import from France at the start of the new campaign,” he added.
UK crushers usually look to overseas suppliers to plug any supply gaps in the weeks between the end of the French harvest and the time threshing begins in Britain.
The latest estimates point to an EU crop at between 14 and 14.5 million tonnes in 2005, down by 1.3 million tonnes on last year.
That would include 4.5 million tonnes in Germany, according to an estimate by German farm co-operatives, down 14 percent from last year.
There was no estimate for the French 2005 crop but the farm ministry said French acreage was 4.5 percent higher than last year and agronomists said the crop was developing well.
EU prices are likely to receive some support from a smaller than expected canola crop in Australia. The latest Australian estimate is 1.1 million tones, down from 1.5 million last year. Uncertainty surrounding the North American soybean crop could also affect values.
The U.S. eastern Midwest has experienced dry weather over the last few weeks and little rain was expected.
