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Rapeseed oil prices skyrocket as demand outstrips supply

The global market price of rapeseed has risen by almost 40 percent compared to last year.

rypsfält i lappträsk.
More and more farmers are turning away from the crop due to poor harvest seasons. Image: Pontus Nyqvist / Yle

Finland is experiencing an acute shortage of rapeseed oil, which is now being sold at historically high prices.

A 40 percent increase saw prices skyrocket to 700 euros per tonne in May before dropping to the current price of between 500 and 600 euros per tonne. The figures are based on Euronext's stock exchange's future rapeseed oil prices.

"However, these prices are only indicative and they can fluctuate" says MTK Cereals expert Max Schulman. "Quality and special bonuses are usually paid on top of that."

Despite the profits on offer right now, many farmers are hesitant to grow the crop because of poor yields in recent years.

Rapeseed is a popular cooking oil but industrial varieties are also used as lubricants and even fuel.

"Too challenging"

The past three years have witnessed a steady decline in the farming of oilseeds, and according to Schulman, rapeseed oil land has reduced from well over 50,000 hectares to between 20,000 and 40,000. About 80,000 hectares would be needed to cover demand in Finland for rapeseed oil.

"Farmers feel that rapeseed cultivation is becoming too challenging — and this is happening across the world. Its market price is not as rewarding as other crops that are easier to cultivate and protect, which is why growers have resorted to safer options" Schulman tells Yle News.

As a result, demand for domestic rapeseed oil is significantly higher than supply. The shortage of raw materials has also led to suppliers importing rapeseed from abroad, especially from the Baltic region.

Finnish farmers hope that the autumn harvest will provide a solution to the supply shortages following a poor spring harvest. Autumn rapeseed is generally better protected from pests and illness but the crop's long period of growth and susceptibility to winter frost mean that growing oilseed presents many challenges.

The autumn seeds sown in July 2020 are now in bloom. At the turn of July-August, they will have matured for harvesting, hopefully replenishing the depleted stocks of the oil mills.

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