Biofuel market heats up, but farmers are unlikely to follow.
Crude Canola Oil & Rapeseed Oil
Market & Price Trends
Innovation & Technology
Caio Alves
Published Jun 24, 2020
Biofuel industry comes back from quarantine looking for rapeseed, even though supply still is a concern.
Farmers are holding seed stock with several months left in the current marketing year yet to go, as they intend to sell it at even higher prices after an already tight season, considering adverse weather prevented producers to resume better crop yields. The increase can be further explained by the demand pressure from the biodiesel industry, of which is heating up again, summing up to lower rapeseed meal prices. Such lean margins for the crushing industry relies on a bearish trend, as European rapeseed meal prices have been receiving meaningful pressure by the soybean meal overstocks.
Paris rapeseed futures for August delivery jumped to €4.25/mt yesterday to €381.25/mt, its highest level since February. The premium of rapeseed-oil methyl ester (RME) last Thursday was at $60/mt, up from $17/mt earlier this month, as rallying RME prices outpaced RSO prices. Today, FAME (Fatty acid methyl ester) is added to conventional diesel fuels in the amount of 7% average in EU.
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