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Oilseed Prices Rise Despite Global Supply; European Rapeseed Production Falls
Oilseed Prices Rise Despite Global Supply; European Rapeseed Production Falls

Oilseed Prices Rise Despite Global Supply; European Rapeseed Production Falls

  • 22-Mar-2024 12:27 PM
  • Journalist: Li Hua

As, we proceed toward the end of the first quarter of 2024, i.e., in March 2024, the prices of various edible oils are likely to rebound across the European market including Rapeseed oil. Despite ample global supplies of oilseeds, including Rapeseed, markets are likely to witness resilience as prices gradually rebound from February's decline. Factors such as rising oil and palm oil prices, coupled with forecasts of decreased European Rapeseed production, are likely to contribute to this upward trend in its prices. Various market experts’ forecasts indicate a projection harvest of Rapeseed around 20.2 million tons for European countries and Great Britain within 2024, thereby representing a decline of about 1.1 million tons as compared to the previous year's harvest of Rapeseed. Supporting the oil market, data from the EIA agency revealed around a 2-million-barrel decline in US crude oil inventories to approx. 445 million barrels, surpassing analysts' expectations of a 1.2-million-barrel decrease. Additionally, many palm oil futures on Bursa Malaysia climbed by 1.7% with a weekly increase of 1.8%. Correspondingly, May futures for soybean oil on the Chicago exchange rose by 1.7% to $1,079/t, marking a 1% weekly rise. Moreover, May canola futures on the Winnipeg exchange currently witnessed an increase of about 2.2% to CAD 648.5/t, reflecting about 3.8% of the weekly increase. This growth was supported by a report from the Canadian Food and Agriculture Organization of the United States (AAFC), which lowered the forecast for canola production in FY 2024/25. Similarly, May Rapeseed futures on the Paris MATIF witnessed an increase of 1.3%, with a 2.9% weekly increase and a 6% monthly rise.

Furthermore, despite speculative growth in oil and vegetable oil prices projected by market players, several factors may limit further escalation that might further affect the market activity of vegetable oil including Rapeseed oil. These include a reduction in downstream demand from the Apac region primarily India and China, as well as the impending seasonal increase in other vegetable oil supply from South America a leading producing nation for Soybean oil along with palm oil from Asia, which is expected to commence in April.

Overall, the oilseed market continues to navigate through fluctuations driven by a myriad of factors, including production forecasts, global demand, and geopolitical developments across the global market including the European region. Despite challenges, market experts’ anticipation of the recent recovery in prices of various vegetable oils including Rapeseed Oil might showcase the resilience of the market, while ongoing trends and forecasts provide insights into future market dynamics for edible oils including Rapeseed oil.  Lastly, Investors and stakeholders must remain vigilant amidst evolving conditions to make informed decisions in this dynamic market landscape.

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