VANCOUVER – The guru of world oilseed markets has a message for
Canadian farmers.
Grow canola.
The world needs a four million tonne increase in canola production in
2002, says Thomas Mielke, editor of the influential magazine Oil World.
It is looking to Canada to provide a good portion of it.
“Some will come from Europe and some from China,” he said. “But the
world will need two million tonnes more Canadian canola next season.”
However, based on the February forecast of planting intentions by
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Agriculture Canada, that is unlikely.
The department projected farmers here will grow 5.8 million tonnes of
canola in 2002, up just 700,000 tonnes from the 5.1 million tonnes
grown in 2001.
Mielke said farmers might miss a good bet if they pass on canola, given
the tight supply and demand balance in the coming year.
There are lots of bullish signals, he said. World stocks of rapeseed
and canola will fall to 2.8 million tonnes this summer, down from 5.6
million two years ago.
Stocks of palm oil, a major influence on world oil supplies and the
price of canola, are expected to decline sharply to a two-year low of
3.3 million tonnes as of September 2002.
Mielke offered no specific price predictions, but said those numbers
should lead to rallies in the second half of this year and into 2003.
“The timing is difficult to say, but prices will appreciate the
remainder of this season and continue into next season due to problems
on the supply side of palm oil,” he told the annual convention of the
Canola Council of Canada.
In an interview, he urged Canadian growers to think seriously about
putting more acres into canola.
“If the rotation allows it, this is a good opportunity to expand
plantings in Canada sizably this year.”
The slowdown in the growth of palm oil production, reflecting the
natural biological yield cycle of palm trees and the effects of drought
in Malaysia, should boost the value of oilseeds with a high oil
content, such as canola and sunflower seed.
World production of rapeseed and canola fell to 36.6 million tonnes in
2001, down from 42.6 million tonnes two years earlier.
Meanwhile, global consumption of the 10 major oilseeds will rise to 322
million tonnes in the coming year, outstripping production of 320.7
million tonnes.
Mielke said that despite generally bullish signs, oilseed markets have
been slow to respond due to several factors, including uncertainty
about future Chinese imports, India’s reduced imports of vegetable oil,
a tendency among buyers to operate with reduced stocks and big oilseed
harvests in South America.
