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Analysis Rapeseed oil

Rapeseed oil stable due to lower yield estimate

April 29, 2024 - Niels van der Boom

Disappointing acreage and yield figures in the European Union have caused the market for rapeseed and rapeseed oil to rise in price in April. The upward trend is now reversing. The price increase of other vegetable oils has also contributed to this.

The European Commission estimates a rapeseed harvest of 19.41 million tons. That is 2% less than the previous estimate and 10% less than the five-year average. Coceral, the industry organization for European traders, expects slightly lower volumes: 19.13 million tons. Some analyst firms estimate the production to be around 18 million tons. It is clear that a smaller rapeseed acreage and the wet weather have not been beneficial for the crops.

Less import
During the 2023-2024 season, the EU imported less rapeseed from Ukraine, Canada, and Australia. The volume decreased by more than a fifth, amounting to 1.2 million tons. At the same time, 7% more rapeseed was processed in Europe, leading to a decrease in available stocks. Despite these figures, the price of rapeseed oil - which stood above $1,000 per ton FOB last month - has only marginally increased. Higher prices for, for example, palm oil help to maintain this price level.

In Ukraine, the analyst firm APK-Inform expects a decrease in rapeseed production to 4.3 million tons, 7% less than in 2023. Like in other (Eastern) European countries, rapeseed has bloomed extremely early this year. Analysts believe this will have a negative impact on the yield. A short period of low temperatures and frost at night does not help either.

Canadian production declines
Canada - the other major rapeseed-producing country in the world - also expects a slightly smaller rapeseed harvest this year, although most of this crop still needs to be sown. The extreme drought in the prairie states, where much of the 'yellow gold' is grown, is not helping.

Pressure in the crude oil sector has no impact on the various vegetable variants. Analysts expect rapeseed to remain at a stable price level in the coming months and possibly even rise slightly. In addition to lower yield figures, market expectations for palm and olive oil also contribute to this.

Niels van der Boom

Niels van der Boom is a senior market specialist in potatoes and other soft commodities at DCA Market Intelligence.
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Analysis Rapeseed oil

Concerns about harvest drive up price of rapeseed oil