W46 Canola/Rapeseed Update: USDA Revises Production Estimates Upward for 2023/24, While Germany Anticipates Decline in Acreage for 2024 Harvest

USDA Boosts Global Rapeseed Estimates for 2023/24

In W46 in the canola landscape, the United States Department of Agriculture (USDA) revised global rapeseed production and consumption in the 2023/24 marketing year (MY). The USDA now estimates global rapeseed volume at approximately 85.6 million metric tons (mmt), a 500 thousand-metric ton (mt) increase from the Oct-23 forecast. Despite this adjustment, there is still an expected decline of 3.6% year-on-year (YoY). Adjustments to the Russian harvest primarily influence the upward correction. The USDA also revised the forecast for global rapeseed consumption in 2023/24 to 85.7 mmt, a 500 thousand mt increase from Oct-23 and 500 thousand mt more than the previous marketing season. This higher consumption is attributed to the larger harvest, particularly in Russia.

Global canola exports from Jul-23 to Sept-23 increased by 1 mmt compared to the previous year, reaching 4.6 mmt. This growth was driven by record shipments of oilseeds from Australia and the resumption of exports from Canada, compensating for the decline in rapeseed exports from the European Union (EU) and Ukraine. Australia's canola exports in Sept-23 more than doubled from the previous year to 368 thousand mt. The main shipments were made to the United Arab Emirates (UAE) at 127 thousand mt (61 thousand mt last year) and Japan up to 124 thousand mt (36 thousand mt). Moreover, the total shipments of Australian oilseeds from Jul-23 to Sept-23 reached 1.2 mmt, contributing to a total of 5.8 mmt for the 2022/23 MY, up by 300 thousand mt from the previous year. The increase in Australian canola exports to traditional Canadian markets offset reduced shipments to the EU.

In the Irkutsk region of Russia, grain exports to China have quadrupled, with oats, rapeseed, barley, and flax being exported for industrial processing. This trade relationship is mutually beneficial, involving the import of various goods, including engineering products, agricultural equipment, vehicles, consumer goods, household items, and fruits from China to the Irkutsk region.

Challenges Persist for Ukrainian and Belarusian Rapeseed Harvests, While Germany Anticipates Acreage Decline in 2024

As of the second week of November, Ukrainian farmers sowed almost 5.7 million hectares (ha) of winter crops, including 1.15 million ha of winter rapeseed. Despite a good harvest in 2023, the Ukrainian agricultural sector is expected to remain unprofitable due to limited export opportunities and low domestic prices. Agricultural production in Ukraine has consistently exceeded last year's figures by 5 to10%, particularly in crops like corn, soybeans, and rapeseed. However, despite the increased production, economic challenges persist.

Despite challenging weather conditions, Belarus achieved higher yields in rapeseed in 2023. Deputy Minister of Agriculture and Food Vladimir Grakun announced that a total of 9.5 mmt of grain, including rapeseed, have been harvested in Belarus. The rapeseed harvest increased by 111 thousand mt compared to the previous year. Some farms in Belarus achieved impressive rapeseed yields, with the highest harvest recorded in the Berestovitsky District at 5.83 mt per ha and the Grodno region at 5.8 mt/ha. Several agricultural organizations even reached rapeseed yields of approximately 7.29 mt/ha, surpassing previous goals of 2.2 to 2.5 mt/ha.

For the 2024 harvest, it is anticipated that the winter rapeseed acreage in Germany will decrease by 4 to7%, ranging from 1.09 to 1.13 million ha, as reported by the German Oilseeds Producers Association (UFOP). Its price decline in the previous year has diminished rapeseed’s appeal to farmers. Germany, a key competitor of France as Europe's largest producer of rapeseed, utilizes the crop for edible oils, animal feed, and biodiesel. Despite a fall in prices, UFOP notes that rapeseed crops in Germany are currently in "good to very good" condition, benefiting from heavy rains in October-November that replenished water reserves after a dry fall.