By FWi staff
UK rapeseed values are continuing their recent upward trend on the back of slow farmer selling and firmer oil values world wide.
Ex-farm spot prices have risen about £4 to £120/t, while harvest values have inched up at £115/t.
But the long-term fundamentals of oversupply and a lack of demand are likely to continue, said a spokesman from Banks Agriculture.
“A larger-than-expected tonnage is thought to be left unsold on UK farms, and this is always at the back of the consumers minds,” he said.
UK crushers are not helping farm prices, as world-wide low oil and meal values mean that they are reluctant to purchase any more on the domestic market at present.
Area payments were reduced as expected last week at the agreement of the CAP farm reform package, and will take place in the form a reduction in three stages.
Linseed and oilseed values will fall to Euro66/tonne for harvest 2002.
Many in the industry believe that plantings should stabilise for 1999/2000 harvests.
But they are worried that more producers will switch to grain in the long term, said a spokesman from the Home-grown Cereals Authority.
“However, under the new reform, oilseed aid should not fall below the cereals payment,” he said.
“The prospects of another three years of possible MGA penalties, coupled with lower payments may discourage some producers from planting oilseeds, although much will depend on price developments in the next years.”
Trade sources believe that rapeseed values are unlikely to return to the highs experienced before Christmas, but rather stay at the levels seen currently.