Rapeseed Prices Recover as Demand Rises

Rapeseed prices have started to rebound after earlier declines. Strategie Grains recently increased its rapeseed inclusion forecasts for the EU due to a smaller sunflower harvest. This change has supported prices across the vegetable oil sector, particularly in Europe.

Ukraine, one of the key suppliers of rapeseed, reported a significant drop in export volumes. November shipments fell to 291,000 tonnes, compared to 475,000 tonnes in October. As a result, projections for the 2024/25 season were adjusted down to 3.30 million tonnes from an earlier estimate of 3.70 million tonnes. This reduction has tightened supplies and forced European buyers to explore other sources.

EU Imports and Canadian Supplies

The EU is working to secure additional rapeseed supplies through imports. Canada, a major producer of canola, is expected to fill part of the gap left by Ukraine. However, trade volumes from Canada remain limited, and some processors in Europe have reported difficulties in securing sufficient stocks. The Canola/MATIF price spread is currently $140, reflecting ongoing market uncertainties.

Poor weather in key producing regions has reduced rapeseed output. Heavy rains in Indonesia disrupted palm oil production, which indirectly supports rapeseed prices. Meanwhile, dry conditions in India have weakened the country's rapeseed crop, leading to higher demand for imports. These weather-related disruptions are adding pressure to global vegetable oil markets.

Rapeseed’s Role in Food and Energy Markets

Rapeseed remains essential for vegetable oil and biodiesel production. Short-term price fluctuations are partly driven by speculative trading, with short positions now making up one-third of the market. At the same time, commercial buyers are actively purchasing supplies to meet growing demand in food processing and renewable energy sectors.

Conclusion

Rapeseed markets are adapting to lower Ukrainian exports, poor weather conditions, and increasing demand in regions like India. With supply under pressure and imports playing a larger role, rapeseed remains a crucial commodity for food and energy production. Future trends will depend on how quickly suppliers can adjust to shifting demand and supply constraints.





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