EU: Oilseed Report
17 December 2007 However, according to the US Dept. of Agriculture’s Foreign Agriculture Service (USDA-FAS), the most influential factor for most farmers this year has been weather. The northwest part of the EU has had a cold and rainy season, while the southeast has had a severe drought during the summer that has damaged the harvest. In the southeast, where the drought caused severe yield decreases, the most important oilseed is sunflower seed.
Canola
Despite high prices for canola and canola oil, the planted area is expected to decrease in 2007/08 due to the high price of wheat. As a rule, the price for canola must be double the price for wheat to generate the same profit due to input costs.
In France, canola production has been lowered due to poor weather conditions. The wet summer favored fungi development and reduced yields from an expected 3.14 metric tons per hectare (MT/Ha) to 2.81 MT/Ha. Overall, canola production still increased in 2007, due to the increase in area.
French canola production in 2007 is 4.39 million MT. For next years crop, plantings are estimated to decline by 10% due to wheat’s profitability, the reduction of compulsory set-aside rate from 10% to 0% by the European Commission, and the questioning of the energy crop program under the EU Common Agriculture Policy (CAP) Health Check discussions, which could effect the level of subsidies paid to farmers in the country.
In Germany the preliminary final canola production estimate for 2007 reached 5.3 million MT, just a minor decrease compared to 2006 despite an 8% reduction in yield (thanks to an 8% expansion in area). A lack of spring rain and presence of the black leg fungus contributed to lower yields. Germany estimates a reduction of winter canola plantings for 2008 by about 8% to 10% to around 1.4 million Ha, again due to the attractive price of wheat.
In the U.K. the area planted with canola in 2007 was greater than predicted, with an increase of over 20% year on year. The summer floods did not affect canola growing areas, so the harvest yields have not been affected.
In Romania the canola area was four times higher than in 2006, reaching 348,000 Ha. However, due to unfavorable weather, the output was 38% lower than expected. The area sown with canola this Fall expanded by 17%.
In Hungary, the canola area has steadily grown for several years. Production is over 40% higher than expected due to high yields, and the 2007/08 Fall seeding indicates another 10% to 12% increase in area.
In the Czech Republic the canola area increased by 16% due to biofuel production expectations. For 2007/08, a production increase of 17% is expected.
Finally, Sweden’s yields were higher than expected due to favorable weather conditions. However, the biodiesel sector did not perform as well as anticipated. Plans to increase capacity for biodiesel production have been put on hold due to uncertainties regarding government incentives to support the industry.
Sunflower seed
In Hungary, the sunflower seed harvest this year is 25% lower than estimated because of the serious drought. The major consumer of sunflower seed in Hungary is Bunge, which has recently upgraded its main crushing facility, and domestic crush of sunflower seed may increase by 15% to 20% percent in 2007/08.
Sunflower seed production in Romania suffered from the severe drought as well as extreme heat, causing production this year to fall 62% below estimates. Romania has been an exporter of about 500,000 MT of sunflower seeds per year, but this year the country’s total production will be around this figure, and the domestic processing industry will only be partially covered, leaving no room for exports.
Also in Bulgaria, the sunflower crop was affected by drought, leaving the estimated harvest at 650,000 MT. In major production areas, 25% of the sunflower crop was severely hit, with the remaining 75% in relatively good condition. However, first reports indicate poor quality, with low fat content high levels of foreign matters.
Total French sunflower seed production fell from 1.36 million MT in 2006 to 1.28 million MT in 2007 due to reduced acreage, despite higher yields. The area planted to industrial sunflower seed increased from 54,000 Ha in 2006 to 128,000 Ha in 2007, and Subsequent industrial sunflower seed production went up from 120,000 MT in 2006 to 310,000 MT in 2007.
In Germany sunflowers are grown on a relatively small area. Compared to 2006, the average yield increased by 30% to 2.5 MT/Ha. However, this was more than offset by a 40% reduction in area to only 18,000 Ha, resulting in a total crop of 47,400 MT, which is 23% smaller than 2006.
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