Rapeseed oil prices have tumbled thanks to good harvests at home and abroad.
In the UK, where the harvest is in full flow and has almost finished in the south, the crop is looking in much better shape than last year. Initial yields are slightly lower than had been hoped, but according to farmer-owned grain marketing business Openfield, the UK remains on track to produce 2.6 million tonnes compared with two million tonnes last year.
Early signs are that the quality of the crop is good and oil content will be several percentage points higher than normal.
The EU is also expecting a better crop this year, in the region of 22.8 million tonnes, which is about one million tonnes higher than last year.
The strong supply situation has depressed prices. At £514.8 a tonne, the crude EU rapeseed oil price is 5.4% down month on month and 27.7% lower year on year [Mintec]. Prices have also fallen on the expectation of a strong US soya crop - which can be used as a substitute in some applications.
However, Openfield trader John Thorpe said prices had started to stabilise and were unlikely to fall much further. “Growers have put a lot of rapeseed into store because they don’t want to sell at the current prices,” he said.
Lower prices should help to sustain growing interest in rapeseed as a cooking oil. Value sales have climbed 39% over the past year to £12.2m [Kantar Worldpanel 52 w/e 2 March].
“This increase in demand, compounded by a reasonable harvest has allowed us to sustain our low prices,” said Ben Guy, MD of rapeseed oil producer Borderfields. “We are running promotions at many major supermarkets over coming months, starting at Morrisons in September, which will reduce the price of top quality, cold-pressed rapeseed oil even further.”