Vegetable oil markets firm as energy prices rise

Vegetable oil markets strengthened through March as escalating geopolitical risks and higher crude oil prices injected fresh momentum into the sector.

The surge in crude values following renewed conflict in the Middle East added a significant risk premium, filtering directly into energy and biofuel markets and lifting demand prospects for key oils such as soybean and rapeseed.

Soybean oil prices reached €1,155 per tonne fob German mill at the end of March, around 6% higher than late February, supported in part by US biofuels policy. However, this level proved short‑lived, with values easing back to roughly €1,105 per tonne in recent weeks.

Rapeseed oil has shown firmer resilience, trading at approximately €1,165 per tonne on 21 April — an 18% year‑on‑year increase — despite generally subdued demand and cautious buying. Tight supplies of rapeseed oil raffinate have yet to stimulate additional purchasing.

According to UFOP, the impact of Germany’s newly adopted greenhouse gas quota framework on domestic markets remains uncertain, though higher RED III targets across the EU are expected to lift biofuel obligations and support rapeseed production. The association also reiterated that national caps on crop‑based biofuels limit usage, leaving no basis to revive the ‘food versus fuel’ debate.

Palm oil has climbed to the top of the vegetable oil price range at around EUR 1,345 per tonne, buoyed by expectations of rising biodiesel demand in Indonesia and Malaysia, though record global output could temper further gains.