Most arable farmers have a love-hate relationship with the golden-yellow rapeseed crop. The challenges in cultivation ensure the highest price in 6 years. The big downside is that yields are dramatically poor in Europe, leaving little product to sell.
The futures market price for rapeseed on the Matif in Paris for this period of the year is at the highest level since 2013. This season, with ups and downs, the price level rose by almost 10%. The November contract now amounts to €380 per tonne. That is not a record, but it is relatively high. Between 2010/2011 and 2012/2013, a tonne of rapeseed even traded for more than €500. The Groningen stock exchange last recorded a price at the beginning of August: €365 per tonne.
Significantly higher prices
Compared to 1 year ago, the price is significantly higher. At that time the Matif stood at €375 per tonne. This is the result of a poor rapeseed harvest. European production this season is 26 million tons, compared to 28 million tons a year ago; just 1 years ago this was still 5 million tons. The lower production is offset by doubled imports. All rapeseed is purchased in Ukraine, already ace also Canada on the European market.
Arable farmers in Germany, France and the United Kingdom would like to benefit from a healthy market. Wheat prices are low, which means rapeseed yields a better margin. However, they face 2 major challenges: drought and the lack of neonicotinoids, which have now been completely banned from cultivation.
The area of rapeseed in the Netherlands is small. Since 2013, when the area was almost 3.500 hectares, the area has shrunk to 1.840 hectares in 2019. Most of this is winter rapeseed. The majority of all Dutch rapeseed is grown in Groningen's Oldambt region.
Drought affects growing season
A dry sowing season last year caused many crops to fail. The current sowing period, roughly between mid-August and early September, is also extremely dry. In France and Germany in particular, there are again many problems with the germination of the new crop. Poland is another important rapeseed country in Europe and it is also extremely dry there. Of all European countries, cultivation has increased only in the latter country.
Seed coating with neonicotinoids has been banned for flowering crops, including oilseed rape, since 2013. As a result, problems with flea beetles have increased enormously, causing entire crops to be eaten. This is especially disastrous in the United Kingdom. This year the country achieved its smallest harvest since 2014 due to flea beetle damage. The UK harvest is 1,5 million to 1,7 million tonnes, which is a decrease of almost 25% compared to 2018.
More demand for oil
The British also have to import rapeseed and oil. An additional problem is Brexit, because it makes it difficult to import the product from the European Union. In addition to the futures market price, the Rotterdam trading price for rapeseed oil has also risen to the highest level since November 2017. The European Union has implemented a tariff increase on biodiesel from Indonesia (made from palm oil), causing demand for rapeseed oil to grow. The price of rapeseed meal does show a downward trend.
A positive market beckons to European arable farmers, who are eager to benefit from it. Grain and sugar beets offer little financial alternative in the construction plan. However, the first sown plots have already been destroyed and confidence is minimal. The fatty sausage simply passes farmers by.