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Biofuels boom raises rapeseed appeal in Argentina.By Karina Grazina Reuters News BUENOS AIRES, June 1 (Reuters) - Yellow fields of flowering rapeseed are a rare sight in Argentina, but strong global demand for biofuels is tempting more farmers to experiment with the oilseed, especially as an alternative to wheat. Farmers are expected to plant less wheat this year, partly due to government intervention in the market aimed at stemming rising food prices. Rapeseed oil is not consumed by Argentines, meaning the crop would escape such anti-inflation measures. "People tend to think of wheat as a problem from a price perspective because it's a political crop in Argentina, but that's not the case with rapeseed," said Diego de la Puente, an analyst at the agricultural consultancy Novitas. Rapeseed, used to make oil and meal for animal feed, is the raw material of choice for Europe's booming biodiesel sector, and demand is expected to grow strongly as wealthy European countries seek to reduce their dependence on fossil fuels. Leading suppliers of rapeseed to the European Union include Ukraine, Russia and Croatia. Rapeseed production in Argentina is tiny compared with more established crops such as soybeans, sunflowers, corn and wheat. While the 2006/07 rapeseed harvest was 12,000 tonnes, wheat production was 14 million tonnes, according to Agriculture Secretariat figures. But wheat has lost its appeal among farmers angry at government measures that have included setting maximum prices in local wheat markets and suspending exports, and rapeseed is seen taking some land away from wheat. "A medium-sized farmer, instead of sowing the 100 percent wheat he had planned, might sow 80 or 90 percent wheat and more rapeseed," De la Puente said. "That obviously has an impact on Argentina's fledgling rapeseed output. It points to significant growth," he said. OPPORTUNITY According to Oil World, the increasing demand for vegetable oils as a renewable energy source turned the European Union into the world's biggest importer of the oils derived from soy, palm, rapeseed and sunflowers last year. Imports of rapeseed oil surged to 688,000 tonnes, eight times more than a year earlier, and Argentine farmers are keen to take advantage of the opportunity. Earlier this year, agricultural firms launched a rapeseed project that touted the virtues of the oilseed as "an alternative in crop rotation." Companies including Glencore, Cargill and Nidera banded together to plant between 600 and 800 hectares (1,482 to 1,976 acres) of trial plots in different parts of the vast country to assess the crop's progress in varying weather conditions. Argentina is a top-five wheat exporter, and rapeseed must compete with the grain for land because wheat and rapeseed have the same growing season and prosper in similar areas. Rapeseed also needs more soil nutrients and harvesting is more complicated. "This means rapeseed isn't a cheap crop and unless we get an acceptable yield, it's not very competitive," Miguel Redolatti, an analyst at the AACREA crop research association, wrote in a newsletter. However, rapeseed is harvested a little earlier than wheat, making it appealing to farmers who plant wheat and soy back to back. Soy tends to have higher yields when sowed early. But analysts say the global oilseeds market, as well as the Argentine government's policy on wheat, will be the main factors in making up farmers' minds.
Date: 01.06.2007 Leave your comment
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