October 14, 2013

Global rapeseed prices have been unable to rise in the past week, despite a recent development in which the EU will raise anti-dumping duties on biodiesel from Argentina and Indonesia. 

In the first session of trade on the key French futures exchange, MATIF, there was a 3% rally in European rapeseed values, which has quickly been given up.

Lloyd George of AgScientia, said that Australian values had ended last week down a dollar a tonne, after earlier rallying at US$15/tonne.

"The EU news is supportive on the surface, but even with that, rapeseed prices were still lax," George added.

"I think the StatsCan announcement that they are raising Canadian production estimates to 16 million tonnes had as big an impact on the downside as the EU news did in bringing prices up. The facts are there's a lot of oilseeds about, the EU has had a big crop, Canada has had a record crop and I think we're in for a bigger year than expected here in Australia. The cool finish and good spring rain will mean there should be some very heavy yields to compensate for slightly lower acreage."

Lachie Stevens of Lachstock Consulting, said that the EU announcement would put a floor in the market rather than provide a price spike. "It's not going to push prices up too much, but it is certainly supportive for oilseeds."

In particular, he said that the sentiment shown by the EU shows a likely continuation of support for biofuel.

According to Malcolm Bartholomaeus of Bartholomaeus Consulting, the larger European and Black Sea crops meant that Australian rapeseed would not have crucial demand out of Europe.

"There are big crops in the EU, and even if they need more, there are supplies in Ukraine, which is much closer than Australia," he explained.

"On the flip side, the Australian crop will be smaller, and China has opened up for Australian rapeseed exports, so there will be a different dynamic here this year."