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UK to see firm rapeseed exports despite slow start

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The UK could see a large rise in rapeseed exports despite a harvest which looks like falling short of expectations - although a reluctance by producers to sell is causing headaches for merchants so far.

The UK, typically the European Union's third largest rapeseed grower after France and Germany, will produce an exportable surplus of some 600,000 tonnes for 2014-15, signalling a "busy export season", co-operative Openfield said.

That is far bigger than the surplus for 2013-14, reflecting a harvest seen coming in at "in the region of" 2.6m tonnes, compared with 2.1m tonnes last year, when poor autumn sowing conditions held back output.

Actual exports of rapeseed for the first 11 months of 2013-14, which ended last month, reached 372,855 tonnes, of which 100,000 tonnes are being queried as having been booked mistakenly.

'Not as high as farmers expected'

However, Openfield acknowledged "disappointment" among growers that the harvest was not bigger still, when crops had appeared "in excellent shape, and there was hope that the long flowering period would have raised yield prospects".

In fact, "initial reports suggest crops are performing in line with the national average of 3.5-3.7 tonnes per hectare", the co-operative, which has 2,700 farmer members, said.

On Thursday, consultancy Adas reported UK rapeseed yields so far in the harvest, now 45% complete, ranging from 2.2-5.2 tonnes per hectare, but coming in overall "close to average".

"Yields have been good… but possibly not as high as farmers had expected given large [plant] canopies and plenty of moisture," Adas said.

'Cancelling export commitments'

Farmers have also seen a drop in rapeseed prices, dented by the strength of sterling, besides the drop in Paris rapeseed futures, which for August delivery dropped below E300 a tonne on Monday for the first time, for a spot contract, in four years.

"The market is under great pressure, and growers are understandably reluctant to sell at current prices as, for many, this would represent a loss," said John Thorpe, Openfield senior rapeseed trader.

At UK grain merchant Gleadell, Jonathan Lane said that "some merchants are cancelling export commitments as the anticipated heavy farmer selling hasn't yet materialised.

"In the UK we see little farmer selling," a trend being echoed in France and Germany too, he said.

In fact, Openfield said it had this week fulfilled one of the first UK rapeseed export shipments of 2014-15, although a small volume of 2,500 tonnes, sold for crushing in Rotterdam.

The co-operative forecast about 175,000 tonnes of shipments over the summer.

Futures recover

Rapeseed futures have recovered somewhat from Monday's low, encouraged by the dearth of farmer selling and by a downgrade by Canada to its forecast for production of canola, the rapeseed variant.

There has also been some – contested – talk of the trend of disappointing UK yields being repeated on the continent, although the EU is still seen as on course comfortably to achieve a record harvest.

Paris rapeseed for August stood at E317.25 a tonne in afternoon deals on Friday, down 0.6% on the day.

By Agrimoney.com

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