Start of palm oil harvest keeps EU rapeseed prices in check
With a market share of 30%, palm oil is one of the most important vegetable oils with the special characteristic of being very inexpensive. Among other things, this is due to the high yields of up to 6,000 kg of oil per hectare and the favorable production technology. The plantations can be used for 35 years or more after a 4-year start-up phase. Under tropical conditions with high temperatures and rainfall of around 2,000 mm, sufficient fertilizer and plant protection must be provided.
This year, 2013/14, the season has already started at a high level and promises to be another high-yield year. The final stocks built up in the past two years, which were higher than the current harvest result, have been reduced below the production line, but the upcoming main season should help to rebuild them.
This means that the supply of vegetable oils remains high. The main victim of this development is local rapeseed, whose valuation is heavily dependent on the vegetable oil price, while the rapeseed meal price is only of marginal importance.
Despite the current weakness of the US soybean harvest, a record soybean harvest is expected in South America, so that a recovery of the rapeseed market in the course of 2013/14 is not very promising from this side of the oilseed market either. From today's perspective, rapeseed storage appears to be less profitable.
