The cultivation of rapeseed is rapidly declining in popularity. The growing conditions are difficult and that often makes the product unprofitable for many growers. At the same time, rapeseed is a very valuable raw material. We process it into edible oils and biodiesel fuels and the residual product goes to the animal feed industry. So quite circular. Due to the low interest in cultivation, the supply was tight and the prices high for years. That could change this season, according to Strategy Grains.
Rapeseed is the largest oilseed crop in the European Union and is used, among other things, to make edible oils, animal feed and biodiesel fuel. Those who grow it are very enthusiastic about it. "Everyone benefits from rapeseed. We need oil worldwide, for fuel and for food. You can make it from rapeseed, and the residual product - the proteins - can be used as animal feed," Geert Lindenhols previously said. RTL News. That sounds positive, but the cultivation faces one major problem: it is a cultivation with many challenging conditions. Think of insects and not being allowed to use neonicotinoids. The number of farmers who want to grow rapeseed is therefore decreasing rapidly.
Less tight supply
In recent years it has resulted in an increasing number of smaller rapeseed area in the European Union. In the largest European rapeseed country: France, the area has fallen from 1,6 million to approximately 1,1 million hectares in recent years. In Germany the area fell from 1,4 million to less than 1 million hectares and in the Netherlands today only just over 1.600 hectares of rapeseed is grown. As a result, the European harvest has decreased in recent years to approximately 17 million tons. It has only happened three times in the last twelve seasons that the harvest has been below 20 million.
And another season is now expected to be added. Although the expectation for the harvest is less sad than previously expected. Market agency Strategy Grains expects a harvest of 17 million tons for this season. A month earlier, 16,8 million tons were expected. The rapeseed harvest is therefore slightly higher than a year earlier. This plus is mainly due to an increase in Romanian production, where growing conditions are more positive than previously anticipated. The supply of rapeseed should therefore be slightly less tight than in recent years. And that will result – as analysts expect – in a drop in the price.
High level prices
The average rapeseed quotation on the Matif is around €360 per tonne. This was a normal price, especially between 2014 and 2019. However, at the beginning of last year the price rose rapidly, supported by the general shortage on the raw materials market. A new high of no less than €626 per tonne was reached at the end of April. Today the quotation stands at €507 per tonne. Although that is a lot lower than the record level of a few months ago, it is still a huge difference compared to a few years ago. The tight supply and increased demand (especially from China) is the reason for this.
Now that the supply of rapeseed is increasing slightly again, analysts expect that a price drop is in the offing. Strategy Grains does take a bit of a swing by saying that this is entirely dependent on the yield results in the European Union and the yield prospects of Canadian canola and American soybeans. Fluctuations in the price of crude oil also have an effect, because they affect the biofuel market. In any case, it is clear that processing rapeseed - for example into rapeseed oils, which are frequently used in cooking - will remain expensive in the coming period. But... less expensive than it is now.