Prices for vegetable oils surge: report

In Germany, UFOP reports that spot prices for vegetable oils  rose significantly in the wake of the rally for palm and soybean oil. Having risen to a three-year high at EUR 830 per tonne, rapeseed oil is more expensive than sunflower oil. Prices for rapeseed oil picked up especially sharply as their surge was additionally driven by rising feedstock costs and the weak euro (which encourages exports).

Feedstock prices are also supported by the fact that conditions for harvesting rapeseed have been less than optimal following snowfalls in Canada. Moreover, the European biodiesel industry has an increased demand for rapeseed oil because it has to comply with the quality requirements for winter diesel as laid down by the biodiesel standard. On the European vegetable oil market in Rotterdam, rapeseed oil is more expensive than sunflower oil, reflecting the contrary supply situation clearly.

In the Netherlands, even premiums are currently paid on contracts for rapeseed. In Germany, the situation is exacerbated by the low water levels on inland waterways. On the one hand, feedstock cannot be delivered, and, on the other, vegetable oil cannot be called forward. Agrarmarkt Informations-Gesellschaft mbH reports that the rally on the futures market was triggered by the reduced supply outlook for palm oil and the small supplies of soybean oil in the US.

More on the story.