Is industrial cropping set to pick up?

4 April 1997

Is industrial cropping set to pick up?

Has set-asides slump to 5% sounded the death knell for industrial cropping? Amanda Dunn speaks to the trade to find out

SOWINGS to industrial crops are expected to be well down this season, reflecting the 5% set-aside rate. But market demand, improved margins and farmer enthusiasm are likely to see the sector grow again if the 1997/98 set-aside rate rises.

"With set-aside dropping to just 5%, were obviously seeing a reduction in the amount of conventional rape being grown for industrial uses," says Kevin Bantick, oilseeds marketing manager, Dalgety Agriculture. "But the decline in area of industrial oilseeds grown is actually greater than the reduction in set-aside.

"Weve seen something like a 60% drop in the area of double zero rape, from almost 53,000ha to about 22,000ha, compared to a 50% drop in set-aside. We believe this is largely due to the amount of set-aside smaller farms have, which makes it impractical to consider industrial rape."

That view is echoed by Richard Whitlock of Banks Agriculture. "Smaller farmers have such a tiny amount of set-aside land, it may be more practical for them to leave an uneconomic area fallow.

"In recent years, weve seen a reduction in oilseeds grown on set-aside land, but we believe this trend may begin to reverse if set-aside goes up this autumn," he says.

Stuart Attridge, Harlow Agricultural Merchants, agrees. "In the second year of production, we handled 6500-7000t of double-zero oilseed rape. This year well probably only do 2000t. How much we handle next year will largely depend on the set-aside figure.

"If set-aside goes up, theres no doubt that interest will be resumed. Double zero is a reasonable product to grow at relatively low costs. Its regarded as a routine crop now, dealt with by many merchants and theres still good demand for it."

One feature of this years reduction in industrial cropping is a rise in margins. "Were seeing a scarcity value for industrial rape this year which will benefit those farmers who have been loyal to the crop," says Mr Whitlock. "Industrial oilseed values are now closer to commercial rape values. Last year we were seeing a £40-50/t discount – this year were only seeing £15-30/t."

But what effect will this fluctuating supply have on processors?

Andrew Probart of Robin Appell, believes there will be little problem in the short term. Processors will simply switch to alternative supplies. "As a merchant weve looked at industrial rapeseed very much as a source of extra income. Processors treat it in the same way. If it goes, then well all manage."

But longer term, uncertainty of supply may affect investment, a Cargill spokesman points out. &#42

Less set-aside means less industrial crops, leaving industrial users short. Traders insist interest will resume if set-aside rises for 1997/98.

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