Agriculture • Dryness threatens upbeat hopes for Aussie canola
Dryness threatens upbeat hopes for Aussie canola
Dry weather may mean Australia’s canola harvest falls well short of estimates of up to a record 4m tonnes, dealing a further blow to hopes for world supplies of the oilseed.
The Australian Oilseeds Federation, while concurring with forecasts from other analysts of a rise in Australian sowings of the rapeseed variant this year, warned that "dry conditions experienced in much of the eastern states" was "threatening the establishment of crops".
The decline in rainfall, which follows a warning of the impact of dryness on Western Australia, meant the harvest would come in at 2.97m tonnes, the federation said, in its first estimate for the crop.
Besides implying a 6.9% decline year on year, the forecast is significantly more gloomy than estimates from other analysts.
‘Yield volatility is high’
The US Department of Agriculture on Friday forecast Australia’s canola output in 2012-13 at a record 3.25m tonnes, while Commonwealth Bank of Australia has pegged the harvest at 3.2m tonnes.
Earlier this week, Rabobank, taking a more sanguine view of the weather, said that "at the high end of expectations, Australia could reach a 4m-tonne crop, double the size of the harvest only three years ago".
"Yield volatility is high in Australia due to weather," the bank said.
"Yet given the strong profit incentives and benign weather to date, we do not see significant downside risk to production."
The Australian Oilseeds Federation said its more downbeat view was based on observations of "deficient rainfall" in New South Wales, the second-biggest canola growing state, where the upper soil profile has been left dry.
"Crops planted into drying soil have led to patchy emergence."
"The situation in Victoria is similar to that of New South Wales," the group said, adding that in parts of South Australia, crops are "in need of rain to either trigger germination or ensure effective establishment."
Conditions in Western Australia were "more typical" of average, thanks to rains in the Esperance area in March, the federation said, contrasting with comments from state farm officials earlier this month.
The prospect for Australia’s harvest is viewed has having a significant influence on the world market, given the prospect of another disappointing harvest in the European Union, the top rapeseed producer and consumer, boosting its reliance on imports.
Oil World on Tuesday trimmed its estimate for the EU rapeseed harvest by 100,000 tonnes to 18.10m tonnes, citing dry autumn sowing weather and damage from a February frost.
The weak harvest "will raise EU import requirements of rapeseed and canola", the German-based consultancy said.
However, Ukraine, which has historically met much of the EU’s import needs, is itself expecting a weak rapeseed crop, which Oil World forecast falling by one-third to 950,000 tonnes.
"Ukrainian exports will decline sharply owing to the very small crop next season," the group said.
"This will raise the global dependence on Canadian and Australian rapeseed and canola export supplies, and will keep prices of rapeseed and canola well supported."
Statistics: Posted by yoda — Wed May 16, 2012 11:51 am
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