Focus on Australia canola crop as supplies tighten

SYDNEY: Australia's official 2011/12 canola crop estimate may be too optimistic as a mice plague is threatening production in the world's second-largest exporter of the oilseed, an industry official said on Thursday.

The Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) on Wednesday projected the 2011/12 crop could rise 6 percent to 2.3 million tonnes but farmers saw risks.

"In some areas there's been extensive damage to canola crops because of the mice...there's been some resowing going on but the later you plant the lower the yield is going to be," said Mark Hoskinson, grains committee chairman in New South Wales state.

"ABARES' estimate could be the case because of where the price is but a lot of the crop has been chewed up and ABARES has always been on the high side of estimates," said Hoskinson.

He said the damage was still to be determined.

Rapeseed or canola production in Australia is being keenly watched around the world as other major producers of the oilseed also face yield challenges.

In Canada, the top canola exporter, adverse planting weather means seeding of crops is behind schedule, with unplanted acres in the key province of Manitoba expected to reach a record level.

Poor yields in Western Europe, due to drought, are also adding to supply tightness.

ICE canola futures are near a year high, closing at $581.10 per tonne on Wednesday.

Last week, the U.S Department of Agriculture (USDA) lowered Canada's 2011/12 canola crop estimate by 500,000 tonnes to 13 million tonnes due to reduced plantings resulting from excessive moisture.

Britain's National Farmers Union said on Wednesday the country's yields were seen 9 percent below the five-year average.

Copyright Reuters, 2011