Canada: Rapeseed Production May Go Higher

April 18, 2002

Canada: Rapeseed Production May Go Higher

Canadian rapeseed production may rebound in 2002/03 due to increased plantings and more normal yields, compared to the 2001/02 season.

Agriculture Canada forecast harvested area to increase 5 percent for 2002/03 to 4.1 million hectares in its April 4 report. The main reason for increased plantings is more favorable prices. Winnipeg Commodity Exchange nearby futures prices in late March 2002 were around C$335 per ton, a large improvement over the C$280 per ton that was available in March 2001. Prices increased rapidly in July and August of 2001, allowing farmers to market their 2001/02 crop at improved prices. The futures market indicates that commodity prices are expected to remain about the same for the 2002/03 crop. November 2002 canola futures in early April have been around C$330 per ton. Current prices will not be as much of an incentive to plant as the C$370 per ton which induced high area levels in 1998 and 1999 when 5.4 and 5.5 million hectares of rapeseed were harvested respectively.

Rapeseed yields will likely rebound from last year’s low level of 1.30 tons per hectare. The 5-year-average yield (1996/97 – 2000/01) of 1.45 tons per hectare should be obtainable with favorable weather; however, a dry autumn and low levels of precipitation over the winter have left soil moisture levels low in rapeseed growing areas of the Prairie Provinces causing some concern for the crop which will be planted in May and early June.

Canada: Rapeseed Area, Yield and Production

Reduced plantings and poor weather in several countries credited for improved Canadian rapeseed prices

Two light vegetable oil crops, rapeseed and sunflowerseed, faced an assortment of difficulties in the 2001/02 crop year which brought about the improved rapeseed prices being seen this year. Canadian rapeseed harvested area in 2001/02 was 3.85 million hectares, the lowest level since the 1996/97 crop. Dry weather and excessive temperatures--over 90 degrees Fahrenheit during the growing season-- reduced the yield to 1.30 tons per hectare, well below average.

World rapeseed production in 2001/02 was low, at 35.9 million tons, down from 37.5 million tons the year before, and down from 42.5 million in 1999/2000. In addition to Canada, the European Union also saw a reduced rapeseed output. Reduced EU support levels under the Common Agricultural Policy (CAP), as well as lower world rapeseed prices, reduced harvested area from 3.6 million hectares in 1999/2000 to 3.0 million in 2001/02. The European Union registered reduced yields in 2001/02, largely a result of poor weather in France and the United Kingdom. Australia saw a relatively low output in 2001/02, currently estimated at 1.7 million tons, down from 1.9 million the year before and 2.5 million in 1999/2000. Australia’s reduced plantings are attributed to low world vegetable oil prices.

Sunflower, another premium vegetable oil crop, tallied low output levels in the Black Sea Region and Argentina. Wheat plantings increased in Russia and the Ukraine at the expense of sunflowers and resulted in sunflower harvested area in the Former Soviet Union dropping 16 percent in 2001/02, to 6.7 million hectares. Dry growing conditions reduced yields, and sunflowerseed production dropped 31 percent from the year before, to 5.3 million tons. Drought conditions in Romania, Bulgaria, and the Thrace region of Turkey resulted in below-average yields in those countries for the second year in a row. Heavy rains at planting time in Argentina kept many farmers out of the field forcing farmers to substitute soybeans which, in Argentina, have a later planting window than sunflowers. Harvested area for sunflowers in Argentina is estimated at 2.0 million hectares, up from a very low 1.9 million hectares in 2000/01.

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For more information, contact Paul Provance at (202)720-0881 or Michelle Greenberg at (202)720-7339 with the Production Estimates and Crop Assessment Division.


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