Scarcity of supply drove rapeseed prices

In Germany, UFOP reports that the rally in rapeseed prices in Paris also reached the German spot market and drove producer prices. For this reason, many farmers marketed their remaining stocks over the past two weeks.

Considering the difficult overall environment, the Union zur Förderung von Oel- und Proteinpflanzen e.V. (UFOP) sees the development of prices as a glimmer of light for arable farmers.

Rapeseed prices in Germany surged considerably over the past two weeks in the wake of very firm forward prices in Paris. MATIF prices exceeding EUR 415 per tonne led to the highest rapeseed prices since January 2020 in the German spot market in calendar week 47. According to research conducted by Agrarmarkt Informations-Gesellschaft (mbH), bids for rapeseed amounted to EUR 370 to EUR 400 per tonne ex farm in calendar week 47. This was up on average EUR 9 per tonne on the year and as much as EUR 25 per tonne compared to two years earlier. In some cases, the mark of EUR 406 per tonne was reached in drop shipping.

The higher price levels induced many producers to sell stocks in the past two weeks. As a result, stocks were largely cleared in some regions with only remaining quantities left in storage. Since contract business was also brisk with comparatively high prices, there have already been sales of rapeseed from the 2021 crop. Sales activities were also fuelled by memories of the price slide that started in January 2020. At the time, rapeseed plunged 16 per cent within two months. Many producers wanted to forestall this potential development by marketing their rapeseed early enough.

The Union zur Förderung von Oel- und Proteinpflanzen (UFOP) sees this development of prices as a glimmer of light. Considering the fact that the situation in arable farming is fundamentally challenging due to low producer prices, weather-related declines in harvest volumes and increasing regulatory requirements, the essential question is whether the market will ever be able to fill the gap. The association has called on politicians to respond as promptly as possible. UFOP has said that anyone who believes that digitisation alone will solve this basic problem is in denial of the reality of international competition.

According to UFOP, the German government’s agricultural strategy lacks an adequate approach to generating higher earnings through increased diversification. But only then will arable farming, enhanced to include pulse production, be an economic prospect – in line with the economic pillar of sustainability.

For years, producer prices have remained below a level that would allow farmers to make the investments that would be required to develop their farm businesses further.