German oilseed association expresses its concerns over falling prices
Expectations of another sub-standard rapeseed harvest in Germany are the driving force behind oil mills' efforts to procure supplies for the coming season well in advance, according to the German oilseed growers‘ association.
The Union zur Förderung von Oel- und Proteinpflanzen (UFOP), which took a closer look at the 2020 sowing trends, has warned about stagnating or declining rapeseed supply from Germany and other European production.
Ex-farm prices of rapeseed experienced a steep decline in February, plummeting to €329 per tonne, the lowest level since May 2018. The association has underlined the need for legislative action to stop the use of palm oil in biofuels.
Prices have gradually moved up since mid-March on support from the futures markets. However, the increase has not been based on new or old-crop transactions.
Many producers sold out exceptionally early this year, stocking only few remaining quantities from early February onwards. Oil mills are stocked up well until the end of the 2019/20 marketing year.
However, demand from oil mills for batches of rapeseed ex-crop 2020 has been strong since mid-March and started earlier than in previous years because another shortage in rapeseed supply is expected for 2020/21. Because of this, processors are interested in securing their re-supply. However, farmers' willingness to sell is virtually non-existent because the corona crisis has caused uncertainty. Also, the price level is unattractive and the development of the field crops is uncertain.
UFOP has expressed fears that the current market situation offers little incentive for farmers to expand the scale of rapeseed cultivation.
Pressure on vegetable oil supply continues to be unabatedly strong worldwide. UFOP has stressed that, for this reason, the importance of demand from the biodiesel industry should be highlighted again.
According to the association, the biodiesel industry will remain the key recipient of rapeseed oil that is certified as sustainable in the future. However, in the vegetable oil market pricing is strongly influenced by the low level of palm oil prices.
UFOP has called on the Federal Ministry for the Environment to create the legal basis for abandoning the use of biomass feedstock with a high risk for changes in land use.
This step would stimulate the domestic market in Germany, especially because German oil mills process more than 9 million tonnes of rapeseed per year, while also making by far the most important contribution to GM-free feed protein supply with more than 5.4 million tonnes of rapeseed meal.
UFOP has emphasised that dairy farms rely on this supply and also pointed out the regional nature of both rapeseed production and processing at oil mills.
The Union zur Förderung von Oel- und Proteinpflanzen (UFOP), which took a closer look at the 2020 sowing trends, has warned about stagnating or declining rapeseed supply from Germany and other European production.
Ex-farm prices of rapeseed experienced a steep decline in February, plummeting to €329 per tonne, the lowest level since May 2018. The association has underlined the need for legislative action to stop the use of palm oil in biofuels.
Prices have gradually moved up since mid-March on support from the futures markets. However, the increase has not been based on new or old-crop transactions.
Many producers sold out exceptionally early this year, stocking only few remaining quantities from early February onwards. Oil mills are stocked up well until the end of the 2019/20 marketing year.
However, demand from oil mills for batches of rapeseed ex-crop 2020 has been strong since mid-March and started earlier than in previous years because another shortage in rapeseed supply is expected for 2020/21. Because of this, processors are interested in securing their re-supply. However, farmers' willingness to sell is virtually non-existent because the corona crisis has caused uncertainty. Also, the price level is unattractive and the development of the field crops is uncertain.
UFOP has expressed fears that the current market situation offers little incentive for farmers to expand the scale of rapeseed cultivation.
Pressure on vegetable oil supply continues to be unabatedly strong worldwide. UFOP has stressed that, for this reason, the importance of demand from the biodiesel industry should be highlighted again.
According to the association, the biodiesel industry will remain the key recipient of rapeseed oil that is certified as sustainable in the future. However, in the vegetable oil market pricing is strongly influenced by the low level of palm oil prices.
UFOP has called on the Federal Ministry for the Environment to create the legal basis for abandoning the use of biomass feedstock with a high risk for changes in land use.
This step would stimulate the domestic market in Germany, especially because German oil mills process more than 9 million tonnes of rapeseed per year, while also making by far the most important contribution to GM-free feed protein supply with more than 5.4 million tonnes of rapeseed meal.
UFOP has emphasised that dairy farms rely on this supply and also pointed out the regional nature of both rapeseed production and processing at oil mills.
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