Global Oil Price Decline Puts Pressure on Biofuels, But Rapeseed Prices Remain Resilient

Amid the recent drop in oil prices—down 8.2% for the week due to a lack of escalation between Iran and Israel—biofuel and vegetable oil markets have come under pressure. However, rapeseed prices remain high, particularly in Europe. Despite the downward trends in other related markets, rapeseed futures in Paris continued to rise, maintaining their strength throughout the month.

Rapeseed Prices Hold Firm in European Markets

On Friday, November rapeseed futures on the Paris MATIF rose by 1%, reaching €501 per ton ($544 per ton), marking a 7.6% increase for the month. February futures followed suit, rising 1.2% to €505.75 per ton. These steady increases highlight the resilience of the rapeseed market despite broader market fluctuations caused by the oil price drop.

Canadian Canola Market Sees a Boost

Meanwhile, Canadian canola prices on the Winnipeg exchange also performed well, with November futures trading at CAD 616 per ton ($446 per ton), representing a 4.8% increase for the month. Favorable weather conditions in Canada have allowed for a smooth completion of the canola harvest, which could lead to increased crop estimates in the coming weeks.

The depreciation of both the euro and the Canadian dollar against the US dollar has made Canadian canola more competitive in global markets, with prices already $100 per ton lower than European rapeseed. This price advantage is likely to drive increased exports of Canadian canola to the EU, where demand remains strong.

European Union Increases Rapeseed Imports

The European Union has ramped up its rapeseed imports for the 2024/25 fiscal year. As of October 12, the EU had increased its imports by 12% compared to the same period last year, reaching 1.57 million tons. Ukraine is the largest supplier, accounting for 70.7% of the imports, followed by Australia with 22.5%. Notably, Canada has yet to make any deliveries to the EU this season, but that could change as Canadian canola becomes more competitively priced.

Ukraine’s Rapeseed Market Faces Challenges

In Ukraine, rapeseed export purchase prices rose by UAH 200-300 per ton to UAH 23,900-24,200 per ton ($500-510 per ton) in Black Sea ports. However, the volume of available rapeseed for export is decreasing, making it difficult for traders to form large batches, which could lead to a decline in purchase prices.

Additionally, weather conditions in Ukraine are a growing concern. By October 14, about 91% of the planned winter rapeseed area had been sown, but the lack of rainfall and expected drop in temperatures could negatively impact crop development, potentially limiting yields for the next season.





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