There is a bearish outlook for oilseed rape prices, despite the planted area being down significantly this autumn, according to United Oilseeds.
A survey of the firm’s members suggested the total 2008/09 winter rape area would be about 457,000ha, just over 20% below last season’s 573,458ha, largely because of a protracted wheat harvest and difficult establishment conditions.
Scotland and northern England had been worst hit, with plantings estimated to be 30-40% down, while in East Anglia and the East Midlands, the predicted drop was nearer 10-15%.
“We think spring plantings could increase significantly to 60,000ha nationally as a result, which is three times their 2007/08 level, but still this is the lowest total oilseed rape planting for a long time,” said United Oilseeds managing director Chris Baldwin.
But record rapeseed and canola crops this season in many northern hemisphere countries meant world production was up a “staggering” 7.2m tonnes on last season to 56.2m tonnes, which had put pressure on previously buoyant prices, said independent expert Thomas Mielke.
Prices dropped by €18/t (£14/t) last Friday (10 October) alone and were well below their summer peak of over £370/t. As Farmers Weekly went to press, the rapeseed price had fallen to £238/t, down from £243/t last week.
“We’ve ended up with a burdensome stock and have seen some unprecedented movements,” said Mr Mielke. “If we don’t get further indications of reduced rapeseed plantings elsewhere, the rape price will have to become more attractive relative to palm oil in order for crush margins to improve.”
However, all reports suggested autumn plantings had been about normal in other European countries, he added. “There is potential for rapeseed prices to fall further, but I think the underlying fundamentals of strong demand are still there, so although we’ll still see price fluctuations, they should be at a higher level than previous years.”