Rapeseed oil prices, also known as canola, have continued to drop in January 2026, influenced by various factors including weaken purchasing, oversupply in the international market, competitively priced exports from Canada, and weak support from the energy markets. Increased production of oilseed crops in the world, especially in the European Union, where the plantings of winter rapeseed have risen by nearly 5%, reaching a record 6.4 million hectares, is expected to ensure a strong supply of oilseed crops in the global market soon. The North American oilseed market is characterized by a glut, attributed to the 23% drop in import prices in 2024. The United States continues to depend heavily on Canadian imports. Ongoing trade tensions between Canada and China have encouraged Canadian exporters to find alternative markets, hence keeping Canadian availability high and prices well contained in the United States. Biofuel demand has provided some support, but low and weakening mineral oil prices have limited the incentive for biodiesel blending. Ongoing growth in oilseed stock levels and crude oil market surplus are expected to weigh on rapeseed oil prices.
The export price of Rapeseed oil from the US market continued the downward trend in January 2026, owing to factors such as global supply, continued pressure of exports originating in Canada along with weaken purchasing sentiments. The price has fallen by 1.57% as of January 2026.
The downward trend in Rapeseed oil is likely to persist in the near term, considering the supply-demand scenario. The prices are declining in the presence of increasing global oilseed supply, where the European Union has witnessed an increase in the sowing of winter rapeseed, which has led to an increase in the cultivated area by nearly 5%, reaching 6.4 million hectares. . While the actual output of Rapeseeds and Rapeseed Oil is expected to be greatly influenced by weather conditions in the spring and early summer, the expansion in acres under cultivation is suggestive of the possibility of a record output from the European Union. This is one of the reasons that has contributed to the bearish outlook for the global rapeseed oil market, reinforcing the view that supplies of the commodity would be plentiful during the 2026 marketing season.
In North America, the market is being impacted by the high levels of supply glut prevailing in the region. The import price of canola oil was seen to fall considerably during 2024, laying the foundation for low prices of the oil, which have persisted during 2025 and early 2026. While the levels of demand for Rapeseed Oil have been consistent, they have not been at levels that can match the rising levels of inventory. The relationship between supply and demand still restricted the potential for oil prices to rise in the US export market during January 2026. The country remains heavily dependent on imported supplies for its domestic consumption of rapeseed oil. The country relies on imported supplies for its consumption, with majorly being sourced from Canada. The rise in Canadian Rapeseed oil supplies, as well as trade disputes between Canada and China, have made Canadian producers look for new markets. This has ensured that supplies remain available at competitive prices, hence exerting downward pressure on export prices.
The demand for biofuels, which often acts as a price-supporting factor, has provided little help. Although rapeseed oil is an attractive option for biodiesel producers, low and falling mineral oil prices have reduced incentives. The presence of a surplus in crude oil has been a factor that has constrained energy markets as a whole, preventing a rise in vegetable oil prices.
Market indicators have been mixed over the latter part of 2025 and the early part of 2026. While European rapeseed prices have risen to a 31-week high in late January 2026, they have done so following a 15-month low recorded in December 2025. Such movements have been tenuous at best. In addition, Rapeseed oil/Canola futures have fallen further in December 2025.
Looking forward to the future, it has been predicted that the prices of US Rapeseed oil exports will continue to face downward pressure over the next few months. Moreover, with oil seed stocks rising globally and Canadian Rapeseed oil exports remaining high and energy markets offering no support, the existing trend is expected to continue.
