The global rapeseed oil market is primed for heightened volatility as the perfect storm of climatic disruptions, below-expectations harvests in the prime production regions, and expanding biofuel usage fuels elevated prices. With only the 2025/26 marketing year underway, rapeseed oil is back in the limelight, hinting at rising concern over snug world availability and skewed regional recoveries.

World rapeseed production is likely to increase by around 5% to nearly approx.89.5 million tonnes, reports the latest USDA data. Yet this banner headline recovery conceals severe shortfalls in a number of key sectors. Ukraine, one of Europe's chief suppliers of rapeseed and rapeseed oil, has had its harvest outlook plunge from the USDA forecast of around 3.7 million tonnes to domestic estimates of around 2.0–2.5 million tonnes. The cumulative impact of drought, late frost, and re-sowing that prevailed has bred serious skepticism regarding exportability.

As a result, ahead Ukrainian rapeseed prices have gone up significantly in just a week of time in May 2025, with Black Sea port offers showing increased buyer apprehension. The rapeseed oil market has reacted similarly, with spot and forward contracts climbing steadily throughout Europe and Asia.

In the EU, prices for rapeseed oil are being driven higher by both Ukrainian tightening supply and strong domestic demand, especially from the biofuels market. Although the EU is likely to experience a small increase in rapeseed production, the crop will remain below last year's levels. Adding to the squeeze, EU imports of rapeseed oil are predicted to drop by around 21% from a year ago, further contributing to regional supply tightness.

Additionally, Canada, the world's largest exporter of canola (a type of rapeseed), is seeing seasonal highs in canola prices, with rapeseed oil following closely behind. Canadian yields are likely to increase, yet the market is extremely sensitive to weather unfolding in the Prairie provinces. Analysts caution that even mild droughts or heatwaves may send further rallies in rapeseed oil futures.

In the meantime, the U.S. rapeseed oil market has continued its steady upward trend up to May 2025, bolstered by approx. 8% rise in planted acreage and firm demand from biodiesel manufacturers. As government blending mandates continue to shape oilseed markets, rapeseed oil has become an increasingly popular strategic input because of its beneficial fatty acid profile and low carbon footprint. Also, in the month of April, the U.S. faced major port disruptions due to labor strikes, trade tensions with China, and severe weather, causing logistical delays and supply chain stress. Simultaneously, global rapeseed (canola) markets saw increased volatility despite higher production forecasts for the EU and Canada. Futures prices remain 1.4–2.4% above last year due to ongoing weather concerns—dryness in Germany, planting delays in Canada, and frost in Ukraine. While some regional gains help offset French declines, strong early-year processing has tightened stocks. Ukrainian farmers are also delaying sales, anticipating further price rises. With weather affecting transportation as well as output, markets continue to be sensitive to shocks, with ongoing volatility possible up to mid-2025. Weather continues to be a dominant price driver across the world. Australia too will likely post stable to modestly higher yields but has limited scope to shape global rapeseed oil prices due to export volume constraints and logistical constraints.

With speculative purchases rising and international vegetable oil markets shifting bullish, rapeseed oil is likely to stay high in the next few months. Both traders and producers keep a very close watch on weather forecasts, especially from Ukraine and Canada, where the uncertainty of production continues to threaten the whole supply chain.

With increasing demand for biofuels and upward pressures on the supply side, rapeseed oil is projected to be a key determinant of global edible oil and biodiesel markets in the balance of 2025.