2018 drought – small harvest and low prices

January 13, 2019 |

In Germany, UFOP reports that although the German rapeseed harvest was the smallest in 15 years, this fact is not reflected in farmers’ proceeds. Rapeseed producers received on average EUR 356 per ton in the first six months of the ongoing marketing year 2018/19. This was up just 2 per cent from the year-earlier period, although the 2018/19 harvest fell 14 per cent short of the previous year’s.

Temporarily, producers obtained EUR 376 per tonne free storage facility in individual cases, but this kind of peak was only reported for North Germany for a very brief period of time. By contrast, farmers in South Germany sometimes sold rapeseed from the 2018 harvest at EUR 330 per tonne at the beginning of the season. Most recently, there was hardly any movement in bids, which ranged between EUR 335 per tonne in Bavaria and EUR 370 per tonne in Lower Saxony, Agrarmarkt Informations-Gesellschaft (AMI) has reported.

Total proceeds from German rapeseed harvests have varied enormously. In purely arithmetic terms, the 2009 bumper crop yielded proceeds of EUR 1.6 billion. A year later, they were up 24 per cent at approximately EUR 2.1 billion, although the harvest was down 9 per cent. Along with rapeseed supply in Germany, competing supply from abroad and the development of proceeds from rapeseed by-products and processed products (rapeseed meal and rapeseed oil) all have a strong impact on the price level of German rapeseed.

According to the Union zur Förderung von Oel- und Proteinpflanzen (UFOP), rapeseed must stand its ground against competition from soybean processed products and palm oil. In the past several months, abundant soy supply, low palm oil prices as “base prices” for energy-related uses, and the increasing supply of waste oils prevented rapeseed prices from rising. The impact of the international biodiesel market virtually fizzled out. Crude oil prices and the euro-dollar ratio also had a bearing on the price structure.

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Category: Producer News

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