MBF Group
Production of unrefined rapeseed oil in Europe is growing rapidly, supported by favorable crop forecasts for 2024 and stable demand for the commodity in both the food and biofuel sectors. Globally, the rapeseed harvest will reach a new record, and ample supply will stabilize prices. Poland is one of the largest producers of rapeseed oil in Europe, making its imports mainly focused on supplementing domestic production to meet growing demand for the commodity.
Ukraine, which is one of the key rapeseed exporters, maintains a significant share of the European market despite the difficult war conditions, which could put pressure on rapeseed oil prices. However, changing factors such as weather conditions, agricultural policies and input prices could affect the final shape of the market in the second half of 2024. Stable demand, especially in the biofuel sector, can counteract possible price declines, making the market situation unpredictable.
MBF Group SA specializes in importing rapeseed oil to Poland and European Union countries. By working with trusted suppliers from Eastern Europe and Asia, the company guarantees the high quality of the supplied raw material. We have a reputation as a reliable partner in the industry, taking care of the reliability and timeliness of orders. Long-term relationships with suppliers make us a trustworthy player in the vegetable oil market.
Oilseed rape harvest in Europe
Europe’s rapeseed harvest, especially in countries such as Poland, Germany and France, is projected at a good level for 2024. Global rapeseed production is expected to reach a new record of about 86.3 million tons, up more than 16% from previous years. The high availability of raw material in Europe and other major producing regions, such as Canada and China, is helping to increase the supply of rapeseed oil.
The situation in the rapeseed market is dynamic and depends on a number of factors, such as weather conditions, plant diseases, national agricultural policies and demand for vegetable oil. In recent years, rapeseed yields in Europe have been fairly stable, although of course there have been both better and worse years. Yields are affected by, among other things:
- Climate change: Droughts, heavy rains or frosts can significantly affect yields.
- Plant diseases: Fungal diseases are particularly dangerous to rapeseed.
- Fertilizer and crop protection product prices: High prices for these products may discourage farmers from growing canola.
Impact of harvest on rapeseed oil prices
An abundant rapeseed harvest may contribute to a reduction in the price of unrefined rapeseed oil, as the increased supply of this commodity usually leads to a decline in its market value. For consumers, this means potentially lower prices for food products and other products based on this oil. Nevertheless, the continued demand for canola oil in the food industry, as well as its growing use in biofuel production, could limit the impact of oversupply on prices and prevent them from falling sharply.
In some regions, such as Eastern Europe and Ukraine, booming demand for rapeseed oil may also have a stabilizing effect on prices, even in the face of rising production. In addition, the price of this commodity can be susceptible to local economic conditions such as inflation, changes in currency exchange rates and trade policies, which can also affect its final price in the market.
In Eastern European countries, especially Ukraine, the rapeseed sector is playing an increasingly important role, and demand for rapeseed oil is increasing due to the need for both food and biofuel feedstock. These factors mean that while ample supply should put downward pressure on prices, at the same time, stable demand may mitigate these trends. As a result, rapeseed oil prices may remain relatively stable even with an abundant harvest, depending on local market conditions and global supply and demand trends
Price forecasts for the second half of 2024
Prices for unrefined rapeseed oil in the second half of 2024 may show a stabilizing trend with possible fluctuations. Increased demand from biodiesel producers and price competitiveness with other vegetable oils will be key factors affecting prices.
It is estimated that prices may rise slightly due to limited supply and rising consumption, but specific values will depend on a number of variables, including global weather conditions and the macroeconomic situation. Therefore, it is important to keep an eye on market developments and external factors that may affect the rapeseed oil price situation in the coming months.
Prices for unrefined rapeseed oil in Eastern Europe and Ukraine:
- High volatility: rapeseed oil prices are very sensitive to any changes in the market, so it is difficult to give accurate forecasts for the second half of 2024. In addition, global changes in trade policy may affect price volatility. The introduction of tariffs, embargoes, trade sanctions or changes in biofuel regulations can cause sudden changes in the price of agricultural commodities, including rapeseed oil. It is also worth considering other external factors, such as changes in currency exchange rates, which can affect the profitability of exporting and importing canola and its products. Therefore, it is difficult to predict exactly how prices will develop in the second half of 2024. Commodity markets are prone to dynamic changes, which makes any forecasts subject to a high risk of error.
- Impact of war in Ukraine: The armed conflict in Ukraine has had and continues to have a major impact on vegetable oil prices in the region. Destruction of infrastructure, restrictions on exports and increases in production costs are just some of the factors that are driving up prices. In addition, the war caused a significant increase in production costs. High energy prices, lack of availability of some raw materials and uncertainty about the future of the conflict mean that vegetable oil producers are facing rising operating costs. These factors have a direct impact on the increase in rapeseed oil prices in Ukraine and the entire Eastern European region, and their impact may also be felt in the coming months and years.
- Eastern Europe: Prices for canola oil in Eastern Europe are generally similar to those in Ukraine, but there may be slight differences due to transportation costs and customs duties. Additional factors such as inflation, fuel prices, labor availability and exchange rates also affect the final price of canola oil in each country. In some cases, differences in fiscal and customs policies can lead to higher prices in countries that impose higher tariffs on imported agricultural products. In the event of supply declines from Ukraine, Eastern European countries must look for alternative suppliers, which could lead to further price fluctuations.
Impact of rapeseed harvest on global rapeseed oil prices
Ukraine’s rapeseed harvest is crucial for global rapeseed oil prices, especially in the context of the European market situation. For the 2023/2024 season, Ukraine forecasts a rapeseed crop of about 3.8 million tons, grown on about 1.4 million hectares. Despite the difficult conditions associated with the war, the area under oilseed rape cultivation has not been significantly reduced, allowing production to remain stable.
Ukraine is one of Europe’s major rapeseed exporters, accounting for about 40% of EU rapeseed imports. A high harvest could affect global rapeseed oil prices by increasing supply. Increased availability of crude from Ukraine could lead to a drop in rapeseed oil prices, which will affect the European and global markets.
On the other hand, stable demand for rapeseed oil in the biofuel and food processing sectors may counteract price declines. In the second half of 2024, rapeseed oil prices may trend upward or stabilize, depending on the balance between supply and demand and global weather conditions. Ultimately, Ukraine’s rapeseed crop has the potential to influence global rapeseed oil prices, especially if production and export levels can be kept high.
Market analysis summary
The rapeseed market in Europe, especially in countries such as Poland, Germany and France, is forecasting a stable harvest in 2024, which will affect the increased supply of rapeseed oil. Nevertheless, stable demand for the commodity in the food and biofuel sectors may counteract price declines. Ukraine, which is one of the key rapeseed exporters, plays an important role in shaping the European market, and its stable production and exports can influence global prices. External factors, such as weather conditions and the macroeconomic situation, will be key to the final shape of rapeseed oil prices in the second half of 2024.
