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EU rapeseed prices drop

Date Added: 08/09/2017

Trader's View: By Owen Cligg, Trading Manager, United Oilseeds

The long awaited announcement on the change in Argentinian import tariffs on biodiesel into the EU came on Thursday, which reduced the duties from over 20% to between 4% and 8%. This possibly opens the EU biodiesel market up to cheaper imports which will affect the demand for rapeseed oil. Hence the Matif rapeseed market fell by 4 euros and a further 2 to 3 euros on Friday.

However, the full implications of this decision are still to be understood, and there are many complicated factors which may not make this decision as bearish as first thought. The EU regulations are based around Green House Gas values and various reductions are required, which may not necessarily be met by Argentinian biodiesel sourced from soyoil. Also, Northern Europe requires biodiesel manufactured from rapeoil which does not wax during the winter months.
Prices for rapeseed in Sterling are therefore lower and valued around £315 ex for September, rising to £320 ex for November/December close to the crush.
Whilst rapeseed prices are going down, conversely, soya prices are going up. This is a function of a weaker dollar and dryness in the US, whilst also the disruption to oil production and refining in the US could also be a supporting factor.

Owen Cligg

United Oilseeds Marketing Ltd
Tel           01380 729200
DD           01380 732313

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