2020 was not a successful year for the rapeseed harvest in the UK and other parts of Europe. Many growers can no longer cover the risks and decide to switch to alternative crops. The expectations for 2021 are also not very positive.
Market agency Strategy Grains recently reported that the rapeseed area in the European Union will remain virtually stable at around 5,5 million hectares next year. A small plus may only be expected in Germany and Eastern Europe. In contrast, a sharp decline is expected for the United Kingdom: -18% to 312.000 hectares, the smallest area since 1986. According to the expectations of government agency AHDB, this results in a production of 1,04 million tons.
The rapeseed area in Ukraine is also expected to decrease next year, to 1,08 million hectares. This is 20% less than in the 2020 harvest year. Production would therefore amount to 2,4 million tons, a decrease of 11% compared to the 2020 harvest year. Many growers who previously grew rapeseed appear to have switched to the cultivation of sunflowers. (+1,5%) and soybeans (+10%). After all, the return that can be achieved with these crops is greater.
Tight supply expected
Taking the above into account, the European Union and the United Kingdom jointly arrive at a harvest of 18,2 million tons, which is only slightly more than the yield of the 2020 harvest. That is exceptional. If we look at the past 11 seasons, the yield has only fallen below 2 million tons twice before. This is no longer entirely surprising to insiders, because the popularity of rapeseed cultivation has been declining for years.
The rapeseed area in the Netherlands has also decreased significantly in recent years, although cultivation here has never been very large. Since 2013, when cultivation still covered 3.500 hectares, the area shrunk to 1.680 hectares in 2020, according to data from Farmer&Bunder. However, most companies only have less than 2 hectares. In short: the Netherlands does not provide much added value when it comes to this cultivation.
As a result of a smaller rapeseed area and lower production, many traders are taking into account a tight supply in the future. And that tight supply can sometimes lead to a higher price. The rapeseed quotation on the Matif in Paris is now €433,25. The price is now higher than in recent years.