London experts lower their forecast for the 2020/21 ending stocks to 3.6 million tons. Global demand is expected to increase by almost four percent compared to the previous year. The EU is expected to import record quantities of rapeseed.
The supply situation for the global rapeseed market is currently becoming tighter than previously expected. The International Grain Council (IGC) assumes that global rapeseed stocks will be more significantly reduced by the end of the current marketing season and will also be at a multi-year low by the end of the following year.
According to their latest report, the London market experts are now anticipating a reduction in storage volumes to just 3.6 million t in 2020/21; in February they had expected 200,000 t more. The volume from the previous year would therefore be 2.6 million t or 41.9% lower.
The main reason for the reduction in stocks is the more extensive global demand for rapeseed, which is expected to increase by 2.7 million tonnes or 3.8% to 73 million tonnes in 2020/21 compared to the previous year. According to the IGC, grinding will account for 69.9 million t, after 66.8 million t in the previous year.
In contrast, the use for animal feed is expected to decrease by 400,000 t to 2.1 million t and the consumption of rape for human consumption by 100,000 t to 900,000 t. The global stocks of rapeseed now forecast for the end of 2020/21 would only be sufficient to cover the expected demand for around 18 days. Accordingly, the supply situation with the black oil fruit is comparatively tight; on average over the past five years, the inventory was sufficient for 29 days.
More rapeseed to China
According to estimates by the Grain Council, Canada’s rapeseed stocks will shrink particularly sharply by the end of the current season, namely by 2.3 million t to just 700,000 t. That would be the lowest level in eight years.
The reason given by the London experts is the North American country’s lively rapeseed export, which is likely to increase by 1 million tonnes in 2020/21 compared to the previous year to a record of 11.4 million tonnes.
Among other things, the rising demand in China is providing momentum in international trade. According to the IGC, the “Middle Kingdom” is likely to import 3.3 million tonnes of rapeseed in the current marketing year, 1 million tonnes more than in the previous year. However, China’s rapeseed imports were significantly higher in the distant past; For 2017/18, for example, the Grain Council shows a quantity of 4.3 million t. According to the experts, the country will continue to meet its additional import requirements for vegetable protein mainly with soybeans.
Larger export volume from Australia
By far the most important rapeseed importer globally remains the EU-27, whose demand on the world market in 2020/21, according to the IGC report, is likely to rise by 400,000 t compared to the previous year to a record of 6.5 million t.
The London market experts cite the again only moderate EU rapeseed harvest last year and the scarce supply situation in the community with sunflower seeds and corresponding products as the cause. Above all, Australia, the second most important rapeseed supplier on the world market after Canada, has benefited from the Union’s rapeseed purchases. The Grain Council now sees rapeseed exports from “Down Under” at a four-year peak of 2.9 million tonnes in 2020/21, after only 1.5 million tonnes in the previous year.
Expansion of rapeseed cultivation expected in Canada
Looking ahead to the next season, the IGC assumes that the supply situation will continue to be scarce. According to their first projection, the experts expect that global rapeseed production will rise to the new record of 72.8 million tons in 2021/22. At the same time, however, it is expected that the global demand for rapeseed will be slightly higher at 72.9 million tonnes.
For the EU-27, the Grain Council predicts 16.6 million tonnes of black oil crops; that would be 500,000 t or a good 3% more than in 2019/20. Reference is made to the current good water supply to the soil in large parts of the community, which will enable higher yields in 2021.
In detail, an increase in the harvest volume of 100,000 t to 3.6 million t and 3.3 million t respectively is forecast for Germany and France. For Canada, the world’s largest rapeseed producer, the experts expect a volume of 20.4 million t; that would be 1.7 million t or 9.2% more than the result for 2020/21. The Grain Council assumes that Canadian farmers will expand rapeseed cultivation by 5% in view of the current attractive prices.
A good 48,000 tons of rapeseed oil from Canada
Meanwhile, the European Union returned as a buyer of rapeseed oil from Canada in 2020. As the Union for the Promotion of Oil and Protein Plants (UFOP) in Berlin announced with reference to current data from Statistics Canada, the EU-27 imported around 48,200 t of rapeseed oil from the North American country last year. In the two previous years, the imports in question had decreased to zero, after around 11,000 tonnes in 2017 and around 37,400 tonnes of rapeseed oil from Canada in 2016.
Agrarmarkt Informations-GmbH (AMI) justified the revival of EU rapeseed oil purchases from Canada with the small rapeseed harvest in the Community last year. In addition, the Canadian rapeseed oil suppliers are likely to have been motivated to export by the attractive world market prices.
USA largest customer
According to UFOP, the EU-27 ranked sixth among the destinations for Canadian rapeseed oil in 2020. Statistics Canada puts the total Canadian rapeseed oil exports for the past year at 3.375 million t; that was 215,000 t or 6.8% more than in 2019. The mean value of the past five years was exceeded by as much as 13.2%.
The main reason for this increase was the significantly higher demand from China for Canadian rapeseed oil, which increased by 230,000 t or 26% to 1.1 million t compared to the previous year. However, the import volume of 2018 was still almost 60,000 t or 5% short of it. The “Middle Kingdom” is “traditionally” the second most important customer for Canadian rapeseed oil exporters.
In 2020, the USA continued to occupy first place by a large margin, with purchases totaling 1.725 million tonnes of rapeseed oil from the neighboring country. Third place went to South Korea with 126,000 t, followed by Chile with 122,000 t and Mexico with 91,000 t.
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