Canola crops in Canada, the world’s biggest exporter, are at risk of frost damage after planting was delayed and cool weather slowed development, Oil World said.
Canada’s production of canola, a variety of rapeseed, may be about 15 million metric tons if plants are able to fully mature before the first frost arrives, the Hamburg-based researcher said in an e-mailed report today. Crop development is as much as two weeks behind normal, and recent cold weather may delay growth further. Some crops may not be finished maturing until mid-September, leaving them at risk of frost in areas of Saskatchewan, Alberta and Manitoba, according to the report.
“A frost in the fourth week of August would result in significant damage in the Canadian Prairies, as it would hit the canola crop before maturity is reached,” Oil World said. “The impact could be substantial as a large share of the seeds would remain green and thus be downgraded.”
Canola futures have dropped 17 percent this year on ICE Futures Canada in Winnipeg, while rapeseed on NYSE Liffe in Paris is down 22 percent. The U.S. Department of Agriculture estimates global rapeseed production will climb to 64.84 million tons in the 2013-14 season, the highest on record. The European Union is the world’s biggest producer, followed by Canada.
“European rapeseed prices have been under considerable pressure in recent weeks owing to increasing new-crop arrivals and reports about higher-than-expected production in Ukraine and several EU member countries,” Oil World said.
Ukraine’s rapeseed exports may climb to 2 million tons in the 2013-14 season that began July 1, more than 50 percent higher than a year earlier, Oil World said. While the researcher pegs the country’s harvest at 2.2 million tons, some trade sources indicate production may be as much as 200,000 tons higher, according to the report.
Ukraine’s rapeseed harvest started one to two weeks ahead of normal, and exports in July may have totaled as much as 170,000 tons, a record for the month. Shipments were mostly destined for the EU, Israel and Turkey. Pakistan may have booked at least 140,000 tons of rapeseed from Black Sea region suppliers including Ukraine and Romania, and the United Arab Emirates probably will step up purchases, Oil World said.