Edible oil prices in Europe have fallen significantly

VOLUME imports of Australian canola and Ukrainian sunflower seed have contributed to a sharp drop in European vegetables oil prices to lows not seen since late 2020, according to analysis from Argus Media.

The insights were presented in a webinar last week entitled The Russia-Ukraine conflict’s impact on global agriculture & fertilizer markets, with global editorial manager agriculture Jade Delafraye speaking on grains and oilseeds

Vegoil oversupplied

Ms Delafraye said in light of the Russia-Ukraine conflict, the most dramatic price declines have been seen in vegoil markets, with Australia a contributor because of its “very strong” canola crop.

Australian Bureau of Statistics data indicates Australia exported a record 3.4 million tonnes (Mt) of canola in the six months to March 31, the first half of its marketing year.

This is up 28 percent from the record 2.66Mt shipped in the corresponding 2021-22 period, with Europe the major destination in both cases.

Crushing of the EU’s own oilseeds, as well as imported soybeans, canola and sunflower seed, have flooded the local market, and Ms Delafraye sees little upside in the near term from export parity.

“North-west Europe’s prices have had to come down to a level where vegoil exports to the rest of the world become attractive,” Ms Delafraye said.

Indicative prices for rapeseed oil and sunflower oil in north-west Europe. Source: Argus Media

“At the moment, the EU is oversupplied in the vegoil market.”

Graph 1: Vegoil prices in  € per tonne in north-west Europe. Source: Argus Media

Ms Delafraye said sunoil prices in north-west Europe dropped early last week.

“That’s something to watch out for in the next few weeks and months.”

Prior to the Russian invasion, Ukraine crushed the vast majority of the sunflower seed it produced, and exported the oil.

With the country under attack, crushing at most Ukraine plants has been suspended, and traders are exporting seed instead of oil as a less risky option.

Ukraine shipped around 80,000t per month of sunflower seed to all destinations prior to the Russian invasion.

“After March ‘22, we’ve seen that export capacity has almost doubled.

“We’ve had several months of 160,000t…to all destinations.”

Tags: Australia, Ukraine, sunflower oil, sunflower, EU, prices, soybean, rapeseed, rapeseed oil