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EU rapeseed harvest seen hitting new low in 2019 after sowing woes

PARIS, Feb 1 (Reuters) - Rapeseed production in the European Union is set to shrink further this year to its lowest in over a decade after drought disrupted sowing, speakers at a grain conference said on Friday.

Summer drought that continued into early autumn forced European farmers to abandon some rapeseed sowing plans while leaving other fields in poor condition.

Last year's drought had contributed to pushing the 2018 EU harvest down to a six-year low of just under 20 million tonnes. Thomas Mielke, head of Hamburg-based oilseeds analysts Oil World, said this year's crop could fall to 18.7 million tonnes.

Christophe Beaunoir, managing director of French oilseed processor Saipol, meanwhile told the Paris Grain Day conference that the EU crop could drop to 18 million tonnes.

EU rapeseed output was last below 19 million tonnes in 2007, when the bloc produced 18.5 million, after producing just 16.1 million in 2006, European Commission data shows.

Rapeseed prices were nonetheless likely to fall in coming months after decorrelating from other oilseed markets due to the reluctance of European farmers to sell and a rally in rapeseed-based biodiesel fuel, the speakers said.

That price pullback could come in April-June after a winter peak in biodiesel demand for rapeseed oil, which is better suited to cold conditions than other biodiesel feedstocks, Mielke said.

Rapeseed prices would then have potential to recover in the second half of the year, they said, with Beaunoir citing the need to encourage farmers to expand area and Mielke pointing to expected strength in vegetable oil markets.

(Reporting by Gus Trompiz, additional reporting by Michael Hogan in Hamburg; Editing by Dale Hudson)

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