Low prices for rapeseed oil contribute to the growth of global demand

Against the background of attractive prices and significant production, the consumption of rapeseed oil in 2023 reached a record 29.8 mln tonnes, which is 11% or 3 mln tonnes higher than last year, Oil World (Germany) reports.

At the same time, the share of rapeseed oil consumption increased not only in the edible oil market (primarily in India and China), but also in the biodiesel market in North America and the EU. The premium for rapeseed oil compared to soybean oil in Rotterdam decreased from 263 USD/t in 2022 to 37 USD/t in 2023, which made Argentine biodiesel uninteresting for European buyers, and therefore its supplies to the EU in January-October 2023 decreased to 0.2 mln tonnes compared to 1 mln tonnes in the same period in 2022.

The decline in rapeseed oil prices contributed to the increase in its use in biodiesel production in the EU. Against this background, the consumption of this oil in 2023 may increase by 0.4 mln tonnes to the record 10 mln tonnes in the EU, by 1 mln tonnes or 40% to the record 3.7 mln tonnes in the US, and by 0.2 mln tonnes to 1.2 mln tonnes in Canada.

At the same time, the global production of rapeseed oil in 2023 will exceed the consumption rate by 0.7 mln tonnes, resulting in the stocks increase to the 7-year high of 4.15 mln tonnes (compared to 3.42 mln tonnes at the end of December 2022).

Tags: prices, rapeseed oil, supply and demand balance