Mintec's prices for EU rapeseed and rapeseed oil increased by 6% and 3% month-on-month (m-o-m) to EUR 712/MT and EUR 1,570/MT, respectively, on 17th January 2022. Prices have, however, eased since reaching record-highs in early January following limited demand from buyers due to the high price levels.
The Euronext rapeseed price reached a record high of EUR 758/MT (up 15% m-o-m) on 7th January. EU rapeseed prices continued to rise amid high demand and limited global supply attributed to a lower-than-expected crop in main producing regions (Canada and EU) in 2021. Additionally, the United States Department of Agriculture (USDA) revised its estimate for the 2021/22 soyabean crop lower by 9.5 million tonnes due to adverse weather in South America's key producing regions (Brazil and Argentina), further supporting rapeseed prices.
Market participants have reported tight EU rapeseed crush stocks, which have compelled producers to reduce their rapeseed oil production. High energy prices have also resulted in high production costs for rapeseed oil producers, further dampening production levels. Furthermore, due to the recent crude oil rally and good crush margins, demand for rapeseed oil as a feedstock for biodiesel production remains strong, as alternative vegetable oils (soyabean oil and palm oil) have restricted use in biodiesel in some EU countries. Consequently, the Mintec Benchmark Prices (MBP) for EU rapeseed oil reached a record high of EUR 1,680/MT on 10th January (up 87% y-o-y).
Market sources expect demand to increase soon as buyers aim to secure rapeseed volumes. Prices for both EU rapeseed and rapeseed oil are thus likely to remain firm in Q1 2022 as supply conditions remain tight despite an expected increase in production in several regions, including Germany, Australia and India. Also, prices are likely to be determined by developments in the soyabean market