Global Rapeseed Demand to Hit 82 Million Tons
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Global Rapeseed is facing structural adjustment in 2022/2023, which will play a decisive role in the transition from tight to loosen global Rapeseed supply; the increase in Rapeseed production in Australia and Russia will expand the space for international cuisine trade. Domestic Rapeseed meal and Rapeseed oil supply and demand have been reshaped.
Global Rapeseed production will increase significantly in 2022/2023. The U.S. Department of Agriculture predicts that global Rapeseed production will reach 85.08 million tons in 2022/2023, an increase of 11.07 million tons year-on-year. Major producing countries like Canada, Australia, and the European Union have high yields. Global Rapeseed demand will reach 81.76 million tons, an increase of 6.84 million tons over 2021/2022 due to increased demand for Rapeseed oil and Rapeseed meal. Global Rapeseed ending stocks rose to 6.16 million tons.
“The downturn of this round of oil and Oilseeds comes from the high yield of Rapeseed determined in advance. This fuse is the first to be priced in the European cuisine market. Behind the inversion of European Rapeseed oil and palm oil prices is the change in the global Rapeseed trade flow and the change in the demand for raw wood.”, said analyst Tian Yaxiong from China Futures Co. Ltd.
It is reported that from January to March 2023, EU vegetable oil imports are expected to drop sharply to only 80,000-90,000 tons, a year-on-year decrease of 47%. The increase in supply and the fall in EU prices are expected to increase the EU’s vegetable oil exports to 180,000 tons from January to March 2023, an increase of 18% from the previous quarter and much higher than the last year’s 59,000 tons. According to the latest official data, 62,000 tons were expected to be shipped in January 2023 (17,000 tons in the previous year), mainly to Norway and the United Kingdom, and the shipment to China will be lower than the initial expectation, only 8,000 tons.
However, preliminary trade data show that the EU’s shipments to China increased significantly from February to March, making the cumulative shipments from January to March this year 60,000 to 70,000 tons, the highest quarterly since April to June 2021, but still far below the 120,000-150,000 tons implied by trader data at the beginning of the month.
From January to June 2023, EU Rapeseed crushing material increased by 1.3 million tons to a new high of 11.8 million tons due to the significant increase in EU supply and continued high imports (mainly from Australia), which is the same as the EU Rapeseed crushing rate in the second half of 2021/2022. In contrast, the reduction of 700,000 tons was due to the tight supply and high prices in the EU and global markets at that time. The forecast for the EU Rapeseed crushing in 2022/2023 (July last year to June this year) has been raised to a new high of 23.8 million tons.
Tian Yaxiong believes that the Rapeseed processing material in the next few months will be much higher than last year, which will continue suppressing the EU Rapeseed oil price. Relatively weak consumer demand and extensive inventories accumulated by food processors to cope with potential production shortages have led to limited interest in short-term refined Rapeseed oil purchases. The dramatic shift from extreme strain to global overproduction can only revive demand through price concessions.
Rapeseed Outlook in Canada
In addition, Canadian Rapeseed production has recovered significantly, from 1.54 tons per hectare in 2021/2022 to 2.1-2.3 tons per hectare, and is expected to recover to 18.2 million-19.5 million tons this year. It is worth noting that this is happening. The increase in Canadian canola planted area is under the condition of 5% year-on-year. As per the AgFlow data, Canada’s total Rapeseed export volume hit 2.6 million tons in January-May 2023. China (0.3 million tons) and Mexico (0.14 million tons) were crucial buyers in May.
Other sources: CNFIN
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