Rocketing world prices for canola and palm oil have encouraged Australian farmers to plant more of the crop, increasing its expected size, traders said on Thursday. Extra hectares of the oilseed, in demand as a feedstock for bifocal, were being planted even though the sowing season normally would have ended by now, and this was helping to contain further price rises.
"They are sneaking a few extra (acres) " trader Cameron Pratt of leading canola exporter GrainCorp Ltd told Reuters. Seed companies were also saying that their stocks are depleted. "That would indicate that there's been a pretty decent crop go in," Pratt said. Australia is the second-biggest canola exporter after Canada. Exports of the oilseed, traditionally used for cooking oil, mainly go to Japan, Pakistan, Bangladesh and China, although Chinese demand varies widely from year to year.
Forecasters say Australian canola production in 2007/08 could as much as triple from a drought-affected 513,000 tonnes in 2006/07, one of the smallest crops on record.
The Australian Oilseeds Federation has forecast a crop of 1.55 million tonnes, while the government unit the Australian Bureau of Agricultural and Resource Economics is looking for somewhere in the region of 1.27 million tonnes.
GrainCorp's Pratt sees a crop of 1.1 million tonnes from Australia's eastern and southern growing areas. Western Australia could produce 400,000-500,000 tonnes, bringing the national crop to 1.5 million tonnes.
Australia's recovery from its worst drought in 100 years may also encourage planting of canola because farmers are looking for alternative uses of land made available by the sale of livestock.