For the Quarter Ending March 2024
North America
Rapeseed Oil pricing in the North American region mirrored the market trajectory of European regions, showing an overall pessimistic outlook but a steady rise towards the end of the period. In January, the notable drop in Rapeseed Oil prices resulted from reduced downstream demand and higher inventories held by market participants. Responding to oversupply, downstream processing enterprises adjusted procurement strategies, further lowering prices, aided by the consistent appreciation of the dollar against major producing nations' currencies.
However, traders continued to exhibit reluctance amid weakened purchasing observed in end-user biofuel and food industries. Moving into February, significant price declines were influenced by exporting nations' provinces, particularly Germany, reducing prices, enabling US market players to adjust strategies to remain competitive. Additionally, the FAO Vegetable Oil Price Index averaged 120.9 points in February, down 1.6 points (1.3 percent) from January and standing 15.0 points (11.0 percent) below its year-ago level. The decline mainly reflected lower world prices of soy, sunflower, and rapeseed oils, more than offsetting marginally higher palm oil quotations.
Global sunflower and rapeseed oil prices decreased, reflecting ample global export availabilities. As March 2024 began, the market witnessed a steady rise in downstream consumption of rapeseed oil, supported by improved demand from end-user sectors. Overall, the market sentiment in North America regarding rapeseed oil remained negative, with a steady rise towards the end of the quarter supporting a balanced supply-demand outlook.
Asia Pacific
In Q1 2024, Rapeseed Oil prices in the APAC region showed a predominantly positive trend, starting with a steady decline attributed to a robust harvest in the previous season. Initially, favorable weather conditions likely boosted yields, reducing import dependence and shaping a pessimistic market outlook. Local market participants strategically utilized destocking tactics to protect their inventories and prepare for new supplies. Despite the continued depreciation of the INR against the dollar, buying sentiments in the market remained subdued, leading to reluctance among traders to procure goods as inquiries from oil mills stayed low. However, in February 2024, there was a slight uptick in downstream rapeseed oil consumption, initially supported by sufficient inventories provided by traders. Additionally, the HSBC final India Manufacturing Purchasing Managers' Index rose to 56.9 from January's 56.5, surpassing a preliminary estimate of 56.7. This indicates strong production growth, supported by both domestic and external demand from various sectors, including downstream agriculture and food industries. In the meantime, driven by buoyant demand, the output and new orders sub-indexes rose to five-month highs. Additionally, with a significant rise in biodiesel consumption, the off-takes for its feedstock, particularly vegetable oil, surged.
The limited availability of palm oil in the region, coupled with reduced production in major producing countries, kept demand for alternative oils high. This led to higher prices for rapeseed oil due to its similar use in biofuel industries. This trend persisted until late March, with market participants managing their inventories strategically, trading at higher costs to maximize profits. The devaluation of the INR against the dollar further increased imported costs for traders and buyers across the region. As a result, the quarter-ending price for Rapeseed Oil in India stood at USD 1247/MT Ex Jaipur, depicting an overall positive trajectory.
Europe
The European Rapeseed Oil market faced significant challenges during the first quarter of 2024, witnessing a notable decline in prices. Several factors contributed to this downward trend, including global market conditions such as decreasing prices of alternative edible oils like soybean oil. The intricate relationship between soybean oil and rapeseed oil, acting as substitutes in various applications from culinary to biofuel production, played a significant role in shaping market dynamics. Abundant inventories of soybean oil, coupled with a noticeable price reduction compared to rapeseed oil, attracted discerning buyers towards the former, exerting downward pressure on rapeseed oil prices. Additionally, weakened demand in the biodiesel sector further dampened the market's performance. Market analysts and experts grappled with a higher global oversupply of rapeseed oil, affecting supply-demand dynamics. The depreciation of the euro against the dollar made trading rapeseed oil relatively expensive in the regional market, leading market players in neighboring nations to resist placing new quotations from Germany. Meanwhile, the FAO Vegetable Oil Price Index averaged 120.9 points in February, down 1.6 points (1.3 percent) from January and standing 15.0 points (11.0 percent) below its year-ago level. This decline primarily reflected lower world prices of soy, sunflower, and rapeseed oils, with global sunflower and rapeseed oil prices decreasing due to ample export availabilities. However, as March concludes, German rapeseed oil exports surged due to a modest regional consumption rebound, maintaining steady inventory levels among market participants and meeting overall demand. However, to support this rebound in demand, buyers and downstream purchasers adjusted quotations, facilitated by favorable freight costs. Nonetheless, this was counteracted by currency factors, with importing regions accepting the product at higher euro rates, benefiting suppliers and allowing them to regain previous profits. Overall, in Q1 2024, Rapeseed Oil prices in Germany saw a negative trend, declining consistently due to global market factors and weakened demand, with a steady rise at the end of the quarter settling at USD 1244/MT FD Hamburg.
For the Quarter Ending December 2023
North America:
During the entire Q4 2023 across North America, Rapeseed oil prices underwent a dynamic trajectory following the market trend of the European region. Initially, starting from October 2023, prices exhibited a decline because of weakened purchasing activity with ample availability within the domestic market. Despite being a cost-effective option drop in other edible oil prices such as Sunflower oil resulted in further competition, keeping the prices on the south side. This trend persisted until the final weeks of December, with prices experiencing a moderate rebound in the middle of the fourth quarter. This rebound was supported by a sudden rise in regional offtakes, balanced with sufficient stocks among merchants coupled with higher costs of fuel and port disruptions.
Congestion at major ports led to delays and substantial increases in transportation costs, rendering the export of Rapeseed oil more expensive. This, combined with other factors, contributed to a spike in prices for consumers. The uncertain global economic situation and concerns about future supply shortages fueled speculation and heightened price volatility in the Rapeseed oil market, further contributing to the overall price surge.
However, navigating the dynamic market dynamics of Rapeseed Oil's downstream end-products, which exhibited a blend of organization and fluctuation, the supply of downstream products proved to be ample. This accommodated the overarching influx of inquiries and resulted in a noticeable decline in transaction volume within the market as December ended.
Asia Pacific:
Throughout Q4 2023 in the APAC region, a multitude of factors played a crucial role in shaping the Rapeseed Oil market and influencing price dynamics. In October 2023, Rapeseed Oil prices experienced an upward trend in the Indian market, driven by heightened demand during the festival season, which typically runs from September to November. This surge in demand, common during festivals, contributed to increased downstream purchasing activity from retailers and suppliers to manufacturers. Various factors, such as inflation and disruptions in the supply chain, have led to escalated production costs, encompassing higher expenditures on labor, energy, and seeds. High energy prices have further contributed to the rising cost of rapeseed. Manufacturers continued to face challenges in meeting the surging demand, resulting in potential shortages and price hikes in the Indian market until the final weeks of November 2023. However, as the fourth quarter approached its conclusion, prices experienced a considerable decline due to decreased downstream demand for terminal oil, reinforcing a pessimistic outlook for the Rapeseed oil market characterized by substantial fluctuations. This decline can be attributed to the increased availability of rapeseed seed for processing into Rapeseed Oil, driven by higher yields of Heavy rapeseed/canola globally in recent seasons. This surge in supplies has led to augmented exportable surpluses of rapeseed/canola oil in the regional market. Furthermore, the reduced prices of Rapeseed Oil have enhanced its competitiveness against other vegetable oils like Palm, Soybean, and Sunflower, resulting in an expansion of its market share and a subsequent decline in prices. The affordability of Rapeseed oil has positioned it as a preferred choice for cost-conscious consumers, particularly in a market sensitive to fluctuations in edible oil prices.
Europe:
Rapeseed Oil pricing in the European region displayed volatility throughout Q4 2023, influenced by several factors. Initially, Germany witnessed a significant price drop, mainly due to decreased regional consumption. The hesitation of domestic consumers to pay higher prices was fueled by the euro's appreciation against the USD. Economic factors and increased availability of alternative edible oils affected Rapeseed oil demand from key importers. In contrast, November 2023 saw a substantial increase in Rapeseed oil prices, marked by a complex situation involving input cost inflation slowing, stabilization in exchange rates, easing output cost inflation, and optimistic sentiment amid rising new orders. This analysis explores the fundamental reasons and potential consequences of this market shift. To counter this sudden rise and prevent the further shortage industry stakeholders collaboratively took steps to reduce surplus inventories and align production with current market requirements by clearing stocks at a high rate. However, By December 2023, Rapeseed Oil prices in Europe experienced a significant downward trajectory, aligning with global market dynamics, including other edible oil markets. The prevailing anticipation was anchored in the expectation of an increased influx of inquiries from the downstream sector, prompting proactive stockpiling in previous months. However, as December approached, the market took an unexpected turn, requiring merchants to recalibrate their inventory levels in response to the evolving landscape.
For the Quarter Ending September 2023
North America
Rapeseed oil prices in North America, especially in the US, showed conflicting market sentiments during the third quarter of 2023. Prices increased until the middle of the third quarter, but in September 2023 they sharply dropped. Increased demand for rapeseed oil in important exporting regions was the primary driver of this initial increase, sustaining a positive trade momentum in the northern markets. However, this surge was not an isolated incident; rather, it was the consequence of a complex interaction between changing supply and demand dynamics, inflation in input costs, and economic factors. Demand growth resulted in bulk ordering, which accelerated the pace of consumption and further depleted the already scarce supply, raising prices as a result. Furthermore, the manufacturing PMI (Purchasing Managers' Index) increased marginally in August 2023 from the preliminary reading of 47 to 47.9. Rising inventory costs were the main cause of the 18.6-point increase in aggregate logistics costs, which reached a reading of 175.3 in August. However, as September 2023 approached, the US market's rising local inventory levels were blamed for the drop in rapeseed oil prices. A drop in the price of coking coal led to lower fuel costs, which in turn undermined cost support. Additionally, higher inventories deterred domestic buyers from placing large orders. In addition, there was more Rapeseed Oil available due to a minor increase in upstream production.
Asia Pacific
In the third quarter of 2023, there was yet another downward trend in the price of rapeseed oil. The pricing chart at the start of the quarter indicated an increasing trend because of higher downstream demand, which was counterbalanced by high inventory levels. Furthermore, the rising cost of raw materials like rapeseed seeds caused a spike in the production cost of rapeseed oil. Businesses experienced increased cost pressure in August as a result of rising fuel and raw material prices. In spite of this, inflation somewhat decreased as a result of increased market competition, prompting some businesses to provide product discounts. The Consumer Price Index (CPI) increased during this time, from 121.20 points in July 2023 to 122.50 points in August 2023. Rapeseed oil's price started to drop as September drew near after experiencing a sharp rise earlier in the quarter. Reduced demand was a contributing factor to this decline, which was most noticeable in the Philippines. As a result, as the third quarter of 2023 came to an end in September, the market witnessed a brief decline in the price of rapeseed oil.
Europe
As a reflection of the mood of the market, the price of rapeseed oil in the North American region trended upward during the third quarter of 2023 until August. The persistent rise in local demand caused the prices to rise. But as September was coming to an end, the prices started to move lower. The rising domestic demand in the local market was the reason behind the increase in rapeseed oil prices up until August. Rapeseed production is greatly affected by unfavorable weather conditions such as floods and other climate-related events in the major exporting nations, primarily India. Notably, India, a significant producer of rapeseed oil, experienced production challenges due to a weather disruption. However, as we moved towards the end of the third quarter of 2023, i.e., in September, the prices dropped considerably, leading to an excessive stockpiling of inventories among the merchants, balancing the overall supply-demand dynamics.
For the Quarter Ending June 2023
North America
During Q2 2023, North American rapeseed Oil prices followed the European market trends. Rapeseed Oil prices continued to decline from Q1 2023 to June 2023, indicating a continued weaker market sentiment for rapeseed Oil. High Rapeseed Oil stocks in North America, ample supply from Europe buyers, and Russia's suspension of the black sea grain trade continued to weigh on the market as exports from Ukraine (one of the main producers) decreased. There was also a sharp down move in crude oil prices and sharply reduced Russian edible oil and grain offers. The combination of these factors had a very negative effect on corn, rapeseed, and other grain prices. Apart from that, higher interest rates and energy prices weighed on import activity as production decreased significantly in exporting countries. In addition, The robust rapeseed crushing activity has pushed the prices of rapeseed oil below the prices of other vegetable oil. On the output side, the absence of winter rain in Saskatchewan, the main producing region in Canada, could lead to a lower crop size next season. On the other hand, the El Niño weather phenomenon may pose a risk to Australian crops, although it is still too early to assess its impact.
Asia Pacific
Rapeseed Oil prices across the Asia-Pacific region showed a downward trend in the Indian market. At the start of the year 2023, the price of Rapeseed Oil continued to decrease, and in April, it dropped by more than 10 percent from the previous month, as price-sensitive Palm oil has long been the go-to oil for Asian buyers due to its low price and fast delivery. However, palm oil prices have risen to a premium level over other edible oils as soft oil prices decreased, in part due to an unprecedented rapeseed crop which switched the customer's preference towards this vegetable oil as it was available at a cheaper rate. Apart from that, one of the primary factors that supported this decline in the prices includes higher Rapeseed production across the Indian market and minimal demand encountered throughout this quarter, which has contributed to the increase in supply with higher stockpiles, putting further downward pressure on its prices. At the end of June, the prices for Rapeseed Oil prices in India were assisted at USD 1132.74/MT Ex-Jaipur with a consistent diminishing trend.
Europe
The second quarter (2023) of the Rapeseed Oil market ended on a negative note, with a steady decrease in its prices across the region. European rapeseed oil prices in Rotterdam continue declining, pressured by subdued biodiesel demand. Particularly, throughout the second quarter, Rapeseed oil prices continued the market trend in the USA. One of the main reasons for the decrease in rapeseed oil prices across the European region was the presence of sufficient reserves in the market and decreased buying sentiments. However, the interesting fact is that farmers are hesitating to sell their produce. This was somewhat surprising as it was expected that with the harvest season coming up, farmers would 'force' the sale of new crop rape seed. However, now, farmers have the option to store wheat or rapeseed for a longer period of time before the harvest season arrives. As a result, this hesitancy to sell allows Ukrainian farmers or sellers to sell substantial quantities into the European Union.
For the Quarter Ending March 2023
North America
The price of Rapeseed Oil fluctuated in Q1 2023 as a result of an unstable supply and demand equilibrium. Due to high inventories and weak demand from end-use sectors, prices fell in the first quarter of 2023. Additionally, the decision to use canola oil in the creation of biofuel helped to increase demand. Prices consistently decreased in the second part of Q1 as a result of an excess of products in the domestic US market. The lower seed prices are supported by the fact that there was also a great deal of uncertainty regarding the rapeseed crop for the future season. Due to the big inventories, local shops had to reduce their prices.
Asia Pacific
The price of Rapeseed Oil fluctuated throughout Q1 2023 as a result of the product's uncertain market dynamics. The price dropped in the first month as a result of reduced demand from the home market in the Asia-Pacific area and adequate stockpiles. As the second month draws near, prices in India rise, helped by a sharp drop in the amount of imported oil. This low inventory level was essential to preserving the strong domestic Rapeseed Oil market business. Prices grew in the final month of the quarter as a result of inconsistent price growth, which to some part, reduced product stockpiling. Towards the end of Q1 2023, the price of Rapeseed Oil was recorded to be USD 1693.59/MT for Ex Jaipur India in March 2023.
Europe
In Q1 2023, the price of Rapeseed Oil fluctuated due to the uncertain market dynamics in the domestic market. Prices decreased in the first month of Q1 due to a reduction in domestic demand and adequate levels of food consumption. Also, the situation in Ukraine prevented shipments, which significantly affected the price of edible oils in the European home market in the second month of the quarter. Due to a lack of sunflower oil on the domestic market in the second month of the quarter, Rapeseed Oil and other replacement edible oils were used. The price of Rapeseed Oil for FOB Novorossiysk (Russia) in March 2023 was estimated to be USD 2200/MT around the end of Q1 2023.
For the Quarter Ending December 2022
North America
The price of Rapeseed Oil varied due to an unstable balance between supply and demand in Q4 2022. In the first quarter of 2014, prices decreased as a result of high inventories and weak demand from end-use industries. In addition, the agreement to use canola oil in biofuel production further boosted the demand. The second half of Q4 saw prices consistently drop due to the oversupply of items on the domestic US market. In addition, there was considerable uncertainty over the Rapeseed production for the upcoming season, which supports the lower seed costs. Local merchants had to sell the items for less because of the large inventories. When Q4 2022 concluded, the price of Rapeseed Oil for the USA in December 2022 was reported to be USD 2920/MT.
Asia Pacific
In Q4 2022, as a result of the product's unstable market dynamics, the price of Rapeseed Oil varied throughout Q4. Due to a rise in demand from the Asia-Pacific region's domestic market and insufficient inventories, the price was raised in the first month. In the second month approached, prices in India increased, supported by a steep reduction in the volume of imported oil. This low inventory position was crucial to maintaining the brisk business of the domestic Rapeseed Oil market. In the last month of the quarter, the prices were decreased due to a consistent price increase that led to stockpiling of the product to some extent. Towards the end of Q4 2022, the price of Rapeseed Oil was recorded to be USD 20.89/MT for Ex Jaipur India in December 2022.
Europe
The unstable market dynamics in the domestic market caused the price of Rapeseed Oil to fluctuate in Q4 2022. In the first month of Q4, prices rose as a result of a decline in domestic demand and high levels of food consumption. The conflict in Ukraine also caused exports to be disrupted, which had a significant impact on the price of edible oils in the domestic European market. Rapeseed Oil and other substitute edible oils were utilized since the domestic market had a shortage of sunflower oil, which led to an increase in price in the second month of the quarter. A fall in product price was seen in the second quarter of 2014 because of more adequate stockpiles and poor downstream industry demand. The price of Rapeseed Oil for FOB Novorossiysk (Russia) in December 2022 was estimated to be USD 2158/MT around the end of Q4 2022.
For the Quarter Ending September 2022
North America
In Q3 2022, the price of Rapeseed Oil decreased owing to the decrease in demand and increase in the supply of the product. Due to large stocks and weak demand from end-use sectors, prices fell in the first part of Q3. In addition, the abundance of goods available on the domestic US market caused prices to decline regularly during the second half of Q3. Additionally, there was still some doubt regarding the new season's rapeseed output, which continues to support the lower seed prices. Due to huge stockpiles, local traders were forced to sell the product for less. Towards the end of Q3 2022, the price of Rapeseed Oil was recorded to be USD 1910/MT for the USA in July 2022.
Asia Pacific
In Q3 2022, due to the product's unstable market dynamics, the price of rapeseed oil varied throughout Q3. Due to a rise in demand from the Asia-Pacific region's domestic market and insufficient inventories, the price was raised in the first month. However, when Q3's second month approached, prices in China fell, supported by a steep reduction in the volume of imported oil. This low inventory position was crucial to maintaining the brisk business of the domestic Rapeseed oil market. Towards the end of Q3 2022, the price of Rapeseed oil was recorded to be USD 1675/MT for Ex Jaipur India in September 2022.
Europe
In Q3 2022, the price of Rapeseed Oil fluctuated owing to the unstable market dynamics in the domestic market. A drop in domestic demand and high levels of food consumption during the first part of Q3 led to price increases. Additionally, the war in Ukraine's export has greatly improved the home European market price of edible oils. As a result, the domestic market has an oversupply of sunflower oil, rapeseed oil, and other substitute edible oils used, which resulted in a drop in price. Low stocks and high demand from the downstream sectors resulted in an increase in the product price in the second part of Q3. Towards the end of Q3 2022, the price of Rapeseed oil was recorded to be USD 2140/MT FOB Novorossiysk in September 2022.
For the Quarter Ending June 2022
North America
In Q2 2022, the price of Rapeseed Oil kept fluctuating in the USA, owing to the decrease in demand and increase in the supply of the product. The price decreased in the first half of Q2, backed by high inventories and low demand from the end-use industries. Moreover, during the second half of Q2, Canada's new rapeseed planting area decreased, and the overall progress of spring sowing was relatively slow. In addition, there was still uncertainty in rapeseed yield in the new season, which continues to support the prices of the seeds. The domestic traders were compelled to sell the product at a lower price due to high inventories. In addition, the price was decreased due to weak buying sentiments in the region.
Asia Pacific
In Asia, Rapeseed Oil prices fluctuated during Q2 2022, owing to the instability in the market dynamics of the product. In the first month, the price was increased due to increased demand from the domestic market of Asia-Pacific Countries and low inventories. However, entering the second month of Q2, the price was decreased in China, backed by the sharp decline in the quantity of imported oil, and the situation of low inventory was essential to support the high operation of the domestic Rapeseed oil market. Due to fluctuations in the price of the product, the market dynamics remain unpredictable for the upcoming quarters.
Europe
In Q2 2022, the price of Rapeseed Oil decreased owing to the increase in the supply of the product in the regional market. In the first half of Q2, the price was increased due to an increase in domestic demand and significant food consumption. Moreover, the Ukraine war has significantly impacted edible oils in the domestic market of major European economies like the Netherland. The price increase is due to a shortage of Sunflower oil in the domestic market, which led to the use of alternate edible oils, including rapeseed oil. In the second half of Q2, the product price decreased due to high inventories and less demand from the downstream industries.
For the Quarter Ending March 2022
North America
In Q1 2022, the price of rapeseed oil remained elevated with limited supply and increased demand from the downstream biodiesel and food application. Cost support and strong global demand forced the farmers to shift to alternative crops such as cereals. Constraint supply led to deterred exports to China and US with revision in the price trend in the international market. Rising input costs for the Canadian farmers, including Rapeseed oil, remained the key factor for the price elevation. Canada’s crushing capacities accelerated the operating cost from its downstream market.
Asia Pacific
In the first quarter of 2022, Rapeseed oil prices showcased seesaw behavior owing to mixed market sentiments in the Asia Pacific region. At the commencement of the first half of Q1 2022, the prices fluctuated upside. The supply side of the market was tight as compared to the demand side as an effect of the spring festival forming strong cost support, but still, the equilibrium was maintained owing to stable inventories. Later, at the onset of the second half of Q1 2022, the prices gradually dropped due to the Russia Ukraine war and the oil substitution effect. With the Russia Ukraine invasion, the supply side was already compromised. On top of that, the consumption of the rapeseed oil market was under pressure with a strong oil substitution effect.
Europe
The prices of rapeseed oil in Q1 2022 showed mixed market sentiments. At the beginning of Q1, the prices were recorded to be high, attributed to lower-than-expected crops with high demand. Later in mid-February, the prices rebounded to the lower side, contributed by increased planting, slightly larger harvest, and higher production in major Rapeseed producing countries Canada. Later, the onset of the second half of the Russia Ukraine invasion contributed to increasing prices despite the increase in land cultivation owing to increased demand from end-user enterprises.
