W4 Canola/Rapeseed Update: Australia Anticipates 33% YoY Drop in 2023/24 Rapeseed Production Due to Crop Rotation Shifts and Price Trends

IGC Predicts Global Drop in Rapeseed Acreage for 2024/25

The International Grain Council(IGC)predicts a decrease in global rapeseed acreage by 0.7 million hectares (ha) to 42.4 million ha for the 2024/25 season due to reduced planting areas in Europe and the Black Sea region. The decline is due to lower raw material prices resulting from a global market glut. In the same season, India is expected to lead in rapeseed cultivation with 9.3 million ha, while Canada, the world's largest producer, will allocate 8.9 million ha. The European Union (EU) countries may see a reduction to 6 million ha, with a noted steady demand for rapeseed and its products in recent years from the food, biofuel, and livestock sectors.

Canada's Canola Exports Down by One-Third in 2023/24 MY

Since the beginning of the 2023/24 marketing year (MY), Canada has exported approximately 2.7 million metric tons (mmt) of canola to international markets, as stated by the Canadian Grain Commission (CGC). However, this represents a nearly one-third decrease in canola shipments abroad compared to the previous year.

Russia's Dec-23 Rapeseed Exports Fell 50% MoM in Volume and Value

On Dec-23, Russia's rapeseed exports amounted to 34.1 thousand metric tons (mt), valued at USD 18.5 million, marking a 50% month-on-month (MoM) decline in volume and value. Notably, all rapeseed exports for the month were directed to China.

Irkutsk, Russia Witnessed Fourfold Surge in 2023 Oilseed Exports

In 2023,Russia's Irkutsk region witnessed a fourfold increase in oilseed exports compared to 2022, with rapeseeds comprising most of the export structure. China emerged as the primary destination for these shipments. This increase is attributed to oilseed production surpassing expectations, reaching 187.9% of the planned value, with a total output of 29.2 thousand mt. The oilseed harvest amounted to 113.3 thousand mt, including a significant portion of rapeseed at 110.8 thousand mt.

Challenges in Ukrainian Rapeseed Exports Amidst Ongoing Russia-Ukraine War

For the first six months of the 2023/24 MY, Ukrainian rapeseed exports faced challenges, with only 79% of the export potential realized, a decrease from the typical range of 90 to 99%. The ongoing Russia-Ukraine war and logistical issues have prolonged the active phase of the season, leading to a decline in the share of rapeseed exported through ports. However, overland routes have emerged as an alternative, allowing for the realization of the full export potential of the rapeseed market. Despite these challenges, rapeseed oil exports achieved a record high at 95% of the export potential.

China's Push for Increased Rapeseed Production in 2024 to Lessen Import Dependency

China is set to expand rapeseed cultivation and maintain stable soybean acreage in 2024 as part of its ongoing efforts to enhance oilseed production and reduce dependence on foreign sources. This strategic move aligns with China's focus on bolstering food security in the post-COVID era and addressing trade tensions, particularly with the United States (US), a major supplier of agricultural products. The aim is to increase the domestic output of key oilseeds like soybeans and rapeseed while reducing reliance on imported meal for animal feed.

Australia Forecasted 33% YoY Drop in 2023/24 MY Rapeseed Production

According to the Australian Bureau of Agricultural and Resources Economics and Science (Abares), rapeseed production in Australia is projected to decrease by 33% year-on-year (YoY) to 5.5 mmt in 2023/24 MY. This decline is attributed to a shift in crop rotation practices, as farmers have maximized available hectares for winter crops in the past two years, benefiting from favorable weather conditions and high produce prices. The reduction in rapeseed cultivation area is also influenced by the return to a more typical crop rotation scheme and a decrease in rapeseed prices to longer-term averages. Despite the anticipated decline, the estimated production remains above the 10-year average due to the second-largest cultivation area in history.