May 8, 2012

Pressure hits UK rapeseed prices

The rapeseed prices in the UK are likely to come under pressure in about harvest time as production overtakes the local demand, according to UK grain cooperative Openfield.

The UK may have an exportable surplus of rapeseed of more than 600,000 metric tonnes, the trader wrote in a weekly market report on its website. The country's growers historically sell 40% or more of their rapeseed crop at harvest, it said.

"This will likely lead to harvest price pressure as there are insufficient homes to cope with the tonnage," Colsterworth, England-based Openfield wrote.

Long-term price prospects are positive because EU rapeseed production is expected to fall by more than 1.1 million tonnes, meaning the bloc will be the world's largest importer of the oilseed for a third year, Openfield said.

"This puts heavy reliance on imports from the Ukraine and Australia," the trader wrote. "This, coupled with the lack of South American soybeans, should see vegetable-oil prices supported long-term."