The European rapeseed harvest has seen a modest increase of almost 1%, according to the latest report from the US Department of Agriculture. This year’s harvest yielded approximately 10.25 million tons of rapeseed oil equivalent, compared to 10.16 million tons in the previous year. The stability in production has attributed to the current consistent prices of rapeseed oil in the market.
The year started with uncertainty surrounding the rapeseed harvest, leading to prices fluctuating around 900 EUR/t +/- 100 EUR/t. However, favourable weather conditions in most parts of Northern Europe during the spring caused prices to drop by approximately 150 EUR/t, reaching nearly 750 EUR/t. Subsequently, cold and rainy weather caused prices to rise above 1000 EUR/t. Concerns over low rapeseed oil content and excessively wet harvests were alleviated as this year’s harvest is approximately 1% higher than that of the previous year, in terms of rapeseed oil production.
Moving forward, prices have remained relatively stable, ranging between 900 and 930 EUR/t. Currently, the trading price stands between these two figures at 930 EUR/t. “From a historical perspective, taking inflation into account, the current prices are relatively low. This is undoubtedly good news for our customers, especially for those considering a switch to B100,” said biofuel trader Per Koustrup.
Looking ahead, forward-prices for rapeseed oil range between 900 and 930 EUR/t. This anticipation is supported by positive expectations for the Canadian rapeseed harvest later this year and the Australian harvest in early next year,” explained Per Koustrup. The availability of forward-price curves until the next European harvest in July 2024 provides our customers with a great sense of security and helps them plan their future investments confidently.
Furthermore, projections by the US Department of Agriculture’s Foreign Agricultural Service (USDA FAS) indicate that the major vegetable oil production in the EU-27 – including sunflower oil, rapeseed oil, and soybean oil – is set to increase in the 2023-24 marketing year. Rapeseed oil production is estimated to rise to nearly 10.25 million tons, reflecting higher output and crush. In line with USDA’s September World Agricultural Supply and Demand Estimates (WASDE) report, rapeseed oil consumption in the EU is expected to reach 9.8 million tons, driven by industrial consumption from the biofuel industry.
Moreover, the USDA FAS projects an increase in rapeseed oil exports from the EU to 750,000 tons in 2023-24, compared to 664,000 tons in the previous year. For sunflower oil, marginal growth in production is anticipated, reaching 4.26 million tons in 2023-24. However, higher supply might curb the EU’s sunflower oil exports to key markets in Asia and Africa.
The growth in vegetable oil production is expected to benefit EU consumers, while a recovery in tourism and increased demand from the food industry are projected to drive consumption. However, rising price inflation may pose a challenge to the growth in food consumption, according to USDA FAS.
Overall, the increasing rapeseed harvest and stable prices of rapeseed oil provide optimism for the European market. The steady growth in vegetable oil production projects a positive future for the industry, allowing customers to plan for long-term investments and benefit from a stable market outlook.
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