The price of rapeseed on the Matif futures market closed on Friday afternoon at its lowest price level in a year and a half. Since January 1, the January contract has lost 8,7% in value. Statements by German environment minister Steffi Lemke in particular leave their mark.
The oilseed rape price was in the red all week. The week closed on Friday at €533 per tonne, but the biggest blow came earlier that week. In two days the contract lost more than €25 per tonne. The European market appeared to be very sensitive to statements made by German Environment Minister Steffi Lemke on Tuesday, January 17. It caused a chain reaction of German stock traders leaving the market. The closing price is the lowest price since August 4, 2021.
Phasing out biofuels
The website of the environment ministry published statements made by Minister Lemke regarding biofuels. Germany wants to abandon this in the short term because, in Lemke's words, it 'causes a loss of biodiversity and is an attack on land use'. According to her, 20% of the German agricultural area (17 million hectares) is needed to replace 4% of fossil fuels. Costs and benefits therefore do not outweigh each other.
This year, palm oil will no longer be used as a biofuel, but rapeseed can also no longer be used as a component of biodiesel and bioethanol in the long term. Lemke's plans - which have yet to be presented to the cabinet - can count on support from agriculture minister and Grünen party member Cem Özdemir. He also believes that food crops should not be used as a raw material for biofuel.
Currently, 4,4% biofuel from rapeseed, grain corn, wheat or soy is mixed into biodiesel and ethanol. This percentage will be reduced to 2024% in 2,3 and to zero in 2030. It is striking that the environment minister did not say a word about the production of biogas, for which mainly silage maize is grown.
Impact of statements
The impact of German environmental measures also affects other rapeseed producers. Australia exports 30% of its volume to Germany for biofuel production. As a result, prices fell 'down under'. The Canadian futures market in Winnipeg was also lower.
Lower soy price
In addition to the news from Germany, there are other factors that contribute to a negative mood on the Paris futures market. At the CBoT in Chicago, the price level for soybeans fell by 2,2% last week, which also has a side effect on canola. Yet the soy price remains relatively high due to drought in Argentina and the impact it has on the harvest in the country. Rainfall last weekend and more water in the forecast provide a slightly moderate forecast.