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Sustainable canola demand to grow as EU rapeseed deficit continues


Australia
October 28, 2021

On the cusp of what is almost Australia's largest canola harvest, global demand, particularly from the EU, will guarantee a solid export program into 2022 and ensure any carry-over stocks are minimised.

The solid and growing demand from the EU will also see growing demand for certified sustainable canola. "With the ISCC certification scheme now widely adopted by growers and exporters, Australia is ideally placed to capitalise on the EU opportunity over the coming export season" says Nick Goddard, CEO of AOF. Last season, just on 2.5 million tonnes of canola. valued at A$1.66 billion, was traded as ISCC certified into the EU biodiesel market. 

New additions to the ISCC scheme, following updates to the EU Renewable Energy Directive, has meant that Australian growers are even better placed to supply canola into the EU. One of the additions to ISCC is the need for growers to allocate 5% of their arable area to safeguarding and improving biodiversity. Such measures could include areas set aside for fallow, area for nitrogen-fixing crops, and/or maintenance or establishment of pollinator crops. "With canola as a pollinator crop, Australian canola growers naturally meet this new requirement" Nick Goddard said. "Add to that the inclusion of nitrogen fixing crops such as pulses or pastures, and the strategic use of fallow, Australian growers are well ahead of many countries where monoculture still dominates the grain growing landscape."

UFOP, the peak oilseed body in Germany is reporting that even though canola production in the EU is up on last year, demand requirements will continue to be augmented with imported canola, all of which will need to be certified as sustainable for use in biodiesel. UFOP reported EU-27 imported around 1.3 million tonnes of rapeseed in the first 15 weeks of the 2021/22 season. This was a 43 per cent decline compared to the same period last year and a 75 per cent drop over 2019/20.

However, according to investigations conducted by Agrarmarkt Informations- Gesellschaft (mbH), the European rapeseed crop will amount to around 16.9 million tonnes in the current marketing year, which will not be sufficient to cover demand. German oil mills alone process more than 9 million tonnes of rapeseed. With Canada supplies severely constrained, the market will rely on Australian certified sustainable canola to satisfy market demand. Even the UK, is now sourcing imports from third countries, including Australia.The UK imported 148,000 tonnes of canola from Australia from the 2020 harvest. 

Restrained deliveries from the Ukraine have also added to the EU import shortfall. Although the harvest was larger, rapeseed deliveries from Ukraine were down 37 per cent year- on-year. 

For the 12 months to June 2021, the EU accounted for 78% of Australia's canola exports, valued at A$1.66 billion. With the coming record harvest, ongoing strong demand from Europe, and unprecedented prices, Europe is likely to consume an even greater proportion of Australia's certified sustainable canola exports, delivering value likely to be in excess of A$3 billion back to Australian farmer's pockets.


 

 



More news from: Australian Oilseeds Federation


Website: http://www.australianoilseeds.com

Published: October 28, 2021

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