Big carryover tipped for Australian canola

30 Sep, 1999 08:16 AM
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AN unprecedented global glut of rapeseed could see Australian growers stuck with as much as 100,000 tonnes of surplus canola by the time next year's harvest rolls around. Australia in on track to produce a record 2.2 million tonnes of canola this year but a leading oilseed analyst says it could have trouble finding a home for the 1.75mt it hopes to export. Thomas Mielke, editor in chief of Oil World Publications in Hamburg, Germany, said Australia would probably be left with sizeable carryover stocks of canola at the end of the season in October 2000. "The marketing job for the new season has become more difficult," he told the 10th International Rapeseed Congress in Canberra last week. "Farmers worldwide have overproduced. The world market is now facing an unprecedented glut, so that rapeseed producers are going to accept price concessions to improve demand and stimulate disposals. "It is doubtful whether the export surplus of probably 1.8mt you have here in Australia for the next 12 months starting November can be disposed of on the world market. "So we might have a situation for the first time where Australian producers have a carryout in October 2000 of 50,000 to 100,000t or more, depending on production in the rest of the world and, of course, on the import side." Mr Mielke said global rapeseed production had leaped by a third in the past three years to a forecast 41.5mt in 1999-2000. With global stocks tipped to hit 4.75mt by the middle of next year, rapeseed was being discounted by US$10-$12/t below soybeans, when normally it sold at a premium. Oilseeds were now at the bottom of a five-year price cycle but, in the past two months, prices had started to recover as insufficient moisture and poor growing conditions, particularly in the US and India, cut forecasts for this year's soybean crop. Mr Mielke said world soybean stocks would slide in the next 12 months to 30.3mt, cementing the recovery, but the glut of rapeseed would see the price gap between the two oilseeds widen before canola prices kicked in 2001-02. But he offered hope for Australian exporters, particularly in China and India, as global rapeseed imports were predicted to leap 15 per cent to 7.7mt in 1999-2000. Faced with stagnant domestic production and soaring demand, Chinese imports < almost zero a few years ago < were surging and were now expected to top 2.6mt or even 3mt. Meanwhile, production in India had slumped and local crushers were falling on hard times. If, as widely expected, India slashed its import tax from 40pc to five or 6pc, this would open the door for up to 500,000t of extra imports. "India could become a major outlet for Australian canola," Mr Mielke said. The Australian Bureau of Agricutural and Resource Economics (ABARE) recently forecast an average Australian canola price of $283 in 1999-00, a drop of 17pc on last year's $341.

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