Diminishing supplies in the key producing countries as well as appreciating vegetable oil prices have pushed rapeseed & canola prices higher in the week to Feb 21, with Canadian canola prices on the ICE reaching a 7-month high of CAN-$ 680.10 in the May position on Feb 20. EU rapeseed prices followed the rally in Canadian canola only at a distance of late, narrowing the premium in the May positions to only around US-$ 80 compared to $ 110 in mid-January.
The looming slowdown of rapeseed crushings and appreciating sunflower oil prices pushed rapeseed oil prices in Rotterdam to a five-week high of US-$ 1158 on Feb 19. Subdued demand from EU biodiesel producers as well as frontloaded crushings resulted in a temporary supply surplus in the EU in Dec and Jan, pushing rapeseed oil prices into an unusually wide price discount vis-a-vis sunflower oil and even palm oil. However, market fundamentals are currently changing, providing additional support to EU rapeseed prices.
World production of the eight major vegetable oils will increase by only 0.3 Mn T in Oct/March 2024/25 according to latest OIL WORLD estimates, curbed by poor productivity in palm oil and diminishing output of sunflower oil and rapeseed oil. The forecast improvement of the production growth to 1.8 Mn T in April/Sept 2025 is based on a sizable recovery of palm oil yields and on soybean processing staying unusually high.
EU imports of rapeseed & canola reached a record 4.0 Mn T in July/Dec 2024 (up 0.8 Mn T on the year), with biggest increases in arrivals from Ukraine to 2.5 Mn T (up 0.55 Mn T) and Australia to 1.2 Mn T (up 0.38 Mn T). Insufficient domestic supplies are likely to keep EU import requirements high at an estimated 3.2 Mn T in Jan/June 2025 (vs. 2.95 Mn T a year earlier), of which at least 1.2 Mn T from Canada and 1.5 Mn T from Australia.
Outlook 2025/26: South American farmers are planning to sharply raise plantings of rapeseed in response to increased prices. In Uruguay the area will probably double to 250 Thd ha this year, while farmers in Brazil are expected to boost the area to around 200 Thd ha and in Paraguay to 90 Thd ha. Combined South American production is forecast to rise to 930-980 Thd T in Oct/Sept 2025/26, a record level and sharply above the 560 Thd T produced this season.
A record 550 Thd T of rapeseed will probably be exported from these 4 South American countries in Oct/Sept 2025/26 (against 208 this season), of which Uruguay 350 Thd T (vs. 108) and Brazil 150 Thd (vs. 82), a large part of which likely to be exported to the EU, raising competition for domestically produced rapeseed.
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.