Oilseed rape prices recover as palm supplies tighten
© Tim Scrivener Oilseed rape prices found support in the week to 8 February on the back of tighter global palm oil supplies.
Although markets lost £10/t in the previous week – due to poor crushing margins and the imminent arrival of stocks from Australia – UK oilseed rape prices recovered by £5.20/t this week to average £350.40/t ex-farm for spot delivery.
This recovery had been driven by tight global supplies and strong demand for vegetable oils, said Isobel Robinson, analyst at AHDB Cereals and Oilseeds.
See also: Grain markets quick to react despite ample supply
Of particular note were low palm oil stocks in Malaysia: The US Department of Agriculture recently cut its production estimate by 13% year on year to 20m tonnes.
As a result, stocks at the end of January had fallen to a five-month low of 1.49m tonnes, down 10.7% on the previous month, according to a Reuters report.
Low UK and EU rapeseed production had also contributed to this rally, with Strategie Grains cutting its monthly estimate for 2017 EU rapeseed production by 0.5m tonnes to 21.56m tonnes, following winter crop damage in Eastern Europe.
The weaker pound and euro against the dollar was supporting European export activity, with lower crude oil prices the main negative factor.