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German oilseed sector hit by acute rapeseed shortage

Date:Jan 14th, 2022
The agricultural information network AgriCensus reported that according to market sources, there is a severe shortage of rapeseed across Germany, causing problems with the supply of raw materials for rapeseed crushing plants and seriously affecting the profitability of the industry.

The Jan. 14 report said this happened because a poor harvest in the main rapeseed-producing region had slashed global production, with market sources estimating that Germany needed to secure 1.4 million tonnes of raw material to maintain operations.

Stephan Arens of the German Union for the Promotion of Vegetable Oils and Proteins (UFOP) told AgriCensus that "German vegetable oil mills are in a dire situation because they do not have access to the rapeseed raw material they need for processing".

The crisis comes against the backdrop of years of high canola oil prices, which has further boosted oilseed processing amid higher crush margins.

AgriCensus reported that the canola shortage comes amid lower-than-expected canola production last year, down 7 percent from the five-year average, while drought in Canada has led to lower production there and cut off sources of feedstock supplies.

According to the latest EU data, weekly rapeseed deliveries to the European Union (EU) from July 2021 to January 9 this year have fallen by 33% to 2.56 million tonnes.

 "Europe has a very short supply of rapeseed and the mills will be in trouble," a trade source said.

 The current high rapeseed price has led farmers to increase the proportion of oilseed crops, further supporting raw material prices, the report said.

Typically, farmers sell about a third of their crops in forward contracts, according to market sources. However, German farmers have sold about 50 percent of this year's crop this year, they said.

While rapeseed in Germany is expected to expand by about 800,000 hectares, up 9 percent from last year, a number of factors have affected yields, such as high fertilizer costs and pest problems, AgriCensus reported. There are still too many unknowns and uncertainties. Germany is the main rapeseed producer in Europe.

“Dingsheng Machinery” continues to provide high-quality rapeseed oil processing equipment for the European market and the global market, from rapeseed pre-treatment to pressing, leaching of rapeseed cake, and refining of rapeseed oil. All kinds of technical support, after-sales service, etc., integrity management and thoughtful service, welcome to the company to discuss cooperation.