New demand from China improves outlook for oilseeds markets

Farmgate oilseed rape prices have been under pressure in recent months with limited global demand, but this could change as China reopens following Covid lockdowns and demand improves.

The average ex-farm spot price collected by Farmers Weekly stood at £462.25/t on Wednesday 18 January, down £3.50/t on week-earlier levels, while UK delivered oilseed rape prices ranged from £457/t in Scotland to £485/t in Erith, Kent.

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Global markets continue to dictate UK prices. Chicago and Paris futures are both up marginally on the month, but still well below where they peaked in 2022.

Frontier trader Lucinda Redgate said the market continued to see a heavy supply of world rapeseed in an environment where demand remains less certain.

“There are subsequent concerns over the speed of the global economic recovery, which forecasters now predict will remain slower and take longer,” said Ms Redgate.

Supply

In the short term, further price gains may be capped as the Australian crop comes to the marketplace following record yields, according to the AHDB.

Longer term, a large European rapeseed crop is due, which will add further pressure.

Droughts in Argentina are supporting markets, however, with the Rosario Grain Exchange cutting its 2022-23 production forecast by 12m tonnes to 37m tonnes.

Grower-owned co-op and marketing specialist United Oilseeds said global markets were also reacting to a record soya bean crop predicted in Brazil, which should more than offset cuts to the Argentinian crop estimates.