UK oilseeds markets fall below £350/t

Weakening Chinese demand, increased supply from the Black Sea region and low crude oil prices are all putting downwards pressure on oilseeds markets.

UK prices have halved from where they were this time last year, when they surged past £800/t at the start of the Russian invasion of Ukraine.

Ex-farm oilseed rape spot prices collected by Farmers Weekly averaged £349.81/t midweek, down £45.34/t on week-earlier levels.

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Owen Cligg, trading manager at United Oilseeds said it was all looking a bit dismal, with rapeseed oil at a discount to palm oil for the first time in more than 20 years.

Global markets plummeted to new seasonal lows with May 2023 Paris rapeseed futures closing at €441/t (£386.93/t) on 21 March. Those values were down €42/t (£37/t) on the week, and €146/t (£128/t) since the beginning of the year.

What’s influencing prices?

  • Brent crude oil dropped to US$75/barrel (£61) on 22 March
  • Oilseed production in Ukraine is forecast to increase by 5.5% in 2023
  • Demand from China for US product is reportedly weaker with less US exports being required
  • Harvest in Brazil is under way, but progress is behind where it was this time last year
  • Crop estimates in Argentina have been revised down

Mr Cligg said: “The Argentinian crop could be less than 25m tonnes so, in theory, that should provide some demand for rapeseed meal and rapeseed oil, but it’s not become apparent as of yet.”

He added there was a bit of “toing and froing” on the Black Sea corridor, which is now up and running for at least 60 days and could encourage Ukrainian businesses to sell grain while they can still get it out.

Looking forward, Mr Cligg said rapeseed is due to flower in the next two weeks and there are one or two crops that look a bit backwards and have some larvae damage.