World market prices of rapeseed have recovered sizeably in March, supported by the rally in vegetable oil prices. Nearby prices in northern Europe reached $ 475 last month, up 5% from a month earlier but still trailing $ 519 in March 2023. Palm oil and soya oil were the price leaders upward in March with partly two-digit gains as a result of limited export supplies.
However, the uptrend of the two major vegetable oils has lost momentum. Sunflower oil has gained market share recently thanks to widening price discounts, exerting some pressure on the entire vegetable oil complex. Partly diverging fundamentals are currently pulling vegetable oil prices in either direction. However, we consider it likely that the supportive to bullish factors will gain the upper hand in the foreseeable future.
EU rapeseed prices are also supported by the prospective tightening of domestic supplies in Apr/June due to the current low stocks caused by the still relatively large EU rapeseed crushings and a slowdown of imports in recent months. Combined exports from Ukraine, Australia and Canada to the EU-27 declined by 1.2 Mn T or 22% in July/Feb 2023/24.
Preliminary industry data suggest a year-on-year increase in EU rapeseed crushings of 7% in Jan/Feb 2024, bringing the total to a record 17.1 Mn T in July/Feb 2023/24 (vs. 16.3 Mn T a year earlier). We expect processing to slow down seasonally in coming weeks and to at best match the year-ago level in Mar/June 2024.
Monthly Prices of Rapseed in Europe since 2005
EU rapeseed oil prices are likely to be supported by improving profit margins of biodiesel producers in coming weeks. RME prices jumped by 6% to US-$ 1280-1290 in the week to April 4, supported by the rally in gasoil futures. In contrast, rapeseed oil prices in Rotterdam increased only marginally during the week in review, widening the discount vis-a-vis RME to the highest level since Oct 2023. Another supportive factor for EU rapeseed oil prices is to be seen in the further sizeable increase in crude palm oil prices in Rotterdam.
Relatively firm vegetable oil prices are likely to favour processing of high oil-yielding oilseeds such as rapeseed in coming months. Ongoing high crush rates and insufficient imports are seen reducing EU stocks below initial estimates at the end of the 2023/24. This should be supportive for EU rapeseed prices in coming weeks. Latest OIL WORLD estimates project nearby prices in northern Germany to average US-$ 500 in Apr/June, up about 5% from a year earlier.
Update prepared by ISTA Mielke GmbH – Global Oil World analyses and forecasts for oilseeds, oils & fats and oilmeals in Hamburg, Germany. On www.oilworld.de more details are provided about the company profile and the individual services.