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Production
Estimates and Crop Assessment Division |
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Production
Estimates and Crop Assessment Division |
July 30, 2002
German rapeseed production is estimated to increase in 2002/03 from last year despite Agenda 2000 reforms that are reducing support for the crop. Production of rapeseed is estimated at 4.5 million tons (see table) for 2002/03, up 8 percent from last year. The increase year-to-year is somewhat of a surprise, because compensation payments were reduced for oilseeds in the European Union this year in line with Agenda 2000 Common Agricultural Policy (CAP) reforms. When crops are harvested this season, it will be the first year that oilseed payments are fully aligned with grain payments. Oilseed payments were reduced this year while grain payments were increased.
The increased German rapeseed output is due to an increase in area. Though yield in 2002/03 is favorable at an estimated 3.52 tons per hectare, it is not as high as last year’s record yield of 3.66 tons per hectare. Rapeseed area increased by 12 percent to 1.28 million hectares in 2002/03.
Part of the reason for the increased area was more favorable rapeseed prices prior to planting, which takes place in August and September. Prices CIF Hamburg climbed 16 percent from US$186 per ton in July 2000 to US$215 in July 2001. Sunflowerseed, on the other hand, saw bigger increases in prices than did rapeseed, up 35 percent for pre-planting prices, with forecast production and area lower for 2002/03 (see table). The rise in sunflowerseed prices was due to poor crops in major producing countries.
Yield increases for German rapeseed over the past decade have allowed rapeseed to become more competitive compared with other crops. Yields averaged 3.41 tons per hectare between 1997/98 and 2001/02, up from an average 3.04 tons per hectare between 1987/88 and 1991/92.
The increase in German rapeseed area is not a one-year phenomenon. Rapeseed harvested area is estimated at a record 1.28 million hectares, up from 1.08 million two years ago despite declining compensatory payments in both of the last two years. Further, rapeseed harvested area is up 28 percent over the past decade.
Rapeseed area in Germany is up probably due to two long-term developments. First, rapeseed oil is in strong demand from the food industry. Less bitter rapeseed oil was introduced in the 1980’s with the development of “double zero” rapeseed varieties that are low in erucic acid and glycosinolate. This development has given the consumer a light, mild tasting oil which has gradually gained in popularity and which is now Germany’s most widely consumed edible oil.
Second, the biofuels industry in Germany has increased rapidly as Germans are investing heavily in biodiesel production. In 2002, around 200,000 tons of new rapeseed diesel production capacity is due to come on line according to the Association of German Biodiesel Fuel Producers. Sales currently are running about twice what they were a year earlier. They are running at around 45,000 to 50,000 tons monthly or 500 thousand tons annually, but are below industry capacity of 650,000 tons. Sales have rebounded after they fell 20 percent in the autumn after bad publicity about its performance in extremely cold temperatures.
Germany sees biodiesel production from rapeseed oil as one way to help meet its obligations under the Kyoto Protocol to reduce greenhouse gas emissions. Rapeseed oil or another vegetable oil in the presence of a catalyst can be made to combine with methanol to form methyl-ester and glycerin. Methyl ester can be used in diesel engines with little or no modification. In Germany, methyl ester used for transportation receives a 100-percent exclusion from the motor fuel tax.
Rapeseed can be grown on set-aside land for industrial purposes (mostly biodiesel) without losing CAP set-aside payments. Use of rapeseed oil for biodiesel production has expanded to the point where production of rapeseed on set-aside land will not be sufficient to satisfy the demand for biodiesel, and some utilization of food-use land for biodiesel will be necessary.
Looking ahead, biodiesel production may get an additional boost if a current proposal before the EU commission is put into effect. The proposal would require 2 percent of motor transport fuels to be produced from renewable resources by 2005, and the requirement would rise to 5.75 percent in 2010. The proposal does not mandate which renewable fuel would be used, but it is widely believed that biodiesel would be more than half of the supply, while bioethanol would be most of the remainder. To put this in perspective, private sources have estimated that it would require 8 million tons of vegetable oil to produce the required biodiesel in 2010. Eight million tons of vegetable oil can be produced from 21 million tons of rapeseed. Current EU rapeseed production is only 9.76 million tons. More rapeseed will be accessible from new EU member states in Eastern Europe such as Poland and the Czech Republic.
