The Vesper West EU Forward Price Index revealed a decrease in the price of crude rapeseed oil to €860 per metric ton (mt) (FOB DutchMill/Extank, May) and the price of crude sunflower oil to €839 (FOB 6Ports (FOSFA 52), Apr-May-Jun) highlighting a downward trend in the market, see Figure 1.

European rapeseed and sunflower oil
Figure 1: Forward VPI Price Positions (P3) for EU Sunflower Oil and Rapeseed Oil

The decline in prices is attributed to a strong supply of sunflower oil from Ukraine and a bearish bean complex, exerting pressure on both sunflower oil (SFO) and rapeseed oil (RSO) markets. Shipping data reveals significant increases in sunflower oil shipments from Ukraine and Russia, alongside a slight uptick in Turkey’s sunflower oil imports:

  • Ukraine sunflower oil vessel line up for 1-22 Feb vs. 1-22 Feb last MY vs. full Jan 2023 (mt): 234,800 vs. 94,500 vs. 397,100
  • Russia sunflower oil vessel line up for 1-22 Feb vs. 1-22 Feb last MY vs. full Jan 2023 (mt): 153,600 vs. 64,100 vs. 418,700
  • Turkey sunflower oil imports Feb 1-24 vs full Jan: 110,639 mt vs. 103,059 mt

Tensions have arisen due to Poland’s resistance against the influx of duty-free trade from Ukraine, with agricultural workers threatening to block borders. Despite these issues, Ukraine plans to enhance exports through an alternative route across the Danube River, as stated by Ukrainian Infrastructure Minister Oleksandr Kubrakov: “We are planning container transportation through the upper Danube, as Romania is more predictable than the Polish border.”

The drop in rapeseed oil prices is also linked to reduced RME (Rapeseed Methyl Ester) prices, affecting the biodiesel sector. A Germany-based crusher noted an increase in biodiesel activity, driven by improved margins for new crops, indicating a sustained interest in biodiesel production.

For a detailed analysis of the vegetable oil and biodiesel market, Vesper offers comprehensive highlights upon request here.