07/09/07
Global influences underpinned by demand for biofuel are
set to maintain a firm oilseed rape market well into the
foreseeable future, according to United Oilseeds’ northern
area manager, Graeme Leslie.
“Oilseed rape is trading at £218/t plus oil
bonuses, for May 2008 delivery, a figure that is destined
to compete with feed wheat for the same period,” he
explains.
“Furthermore, growers are not only operating in
a favourable marketplace, they also have improved genetics
and management to hand in order to push yields far beyond
the current 3t/ha UK average and exploit the crop’s
true potential.
“For example, at Crossfell House Farm, Kirkby Thore,
near Penrith, NK Grace has just come off the field at 5.56t/ha,
while further north at Hadden Farm, Kelso, Ian Fullarton
reports the same variety yielding 5.1t/ha.
“Take that 5t/ha yield worth more than £230/t
including oil bonuses and returns will be well over the £1,100/ha
mark,” says Mr Leslie.
The backdrop to the marketplace is Europe’s 10%
target for the Renewable Transport Fuels Obligation (RTFO)
by 2020, and which the European Commission anticipates
lifting oilseed prices by up to 18% in the medium to long
term. Added to that is the expanding world demand for vegetable
oils.
Combined with this year’s supply shortage with the
European 2007 oilseed rape harvest estimated down by 25%
to 15m tonnes, said Mr Leslie.
“Reports across Europe suggest that the weather – the
spring drought followed by floods has taken its toll on
oilseed rape. In addition, the RTFO is placing priority
on the crop for fuel over food usage, while mineral oil
has escalated from $65/barrel to $72/barrel in the last
three months.”
He adds: “Growers however should not be complacent
when it comes to future trading; simply awaiting for the
newly drilled crop to emerge before making marketing decisions
maybe too late. If they want to take full advantage of
the current future market and reduce risk, then they should
consider selling a percentage of next year’s crop
now at a fixed price, or else commit the crop to a pool
which trades on the acreage planted.”
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