A slight upgrade to France’s rapeseed outlook will still leave the country on the brink of its worst performance in overall cereal cropping since 2003, with collective oilseed and grain tonnage pegged down at 55.4mn t this year amid a 31% collapse in wheat output alongside feeble rapeseed production.
French rapeseed farmers are expected to produce just 4.7mn t of seed this year, down 12% YoY, although slightly up from the 4.5mn t forecast at the beginning of August. The figure is 10% lower than the 2011-2015 five year average. Poor sunlight, disease and insect infestations have hammered this year’s crop, with the effects felt particularly hard in the northern French regions of Ile-de-France, Nord-Pas-de-Calais and Picardie as well as eastern departments. Despite the slump in output, French farmers could still pip German rivals eyeing a sub-4.7mn t harvest this year to the rapeseed crown once data sets are expanded.
Avril, France’s dominant biodiesel producer, is currently in the process of reducing output at its fleet of French plants, citing the high cost of feedstock and stiff competition from imported biodiesel and cheaper feedstocks. 43,700t of biodiesel poured into France from Spain in June, with just 4,000t of product moving in the opposite direction the same month.
Together with planned and unplanned biodiesel plant outages, a shortage of rapeseed oil has made itself felt as a major concern in the northwest European biodiesel market, where premiums for RME biodiesel over ICE gasoil have shot into the mid-$550s/t last week. The market retraced sharply to trade around the $500/t mark over gasoil on Monday.
Looming biofuel mandate hikes for 2017 across EU countries representing core biodiesel demand will compound the pressure on sources of rapeseed and rapeseed oil as blenders adjust their ratios to keep pace with higher monthly incorporation requirements next year. Germany’s greenhouse-gas based mandate meanwhile has trimmed the price advantage available to waste-based biofuels under the “double count” systems operating in markets such as the UK and the Netherlands.
France is pegging its soft wheat output down 31% at just 28.2mn t relative to last year’s record output, with this year’s harvest also lagging the five year average by 24%.
MS – 12/09/2016