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The European Union (EU)’s rapeseed sector is under pressure due to a huge increase in imported biodiesel, according to FEDIOL, the trade association representing the EU vegetable oil and protein meal industry.

Imports of biofuels classified as waste-based – hydro-treated vegetable oil (HVO) or fatty acid methyl esters (FAME) ­– were taking place at such scale that it had led to serious disturbances in the EU markets for rapeseed methyl ester, and consequently in the rapeseed and rapeseed oil markets, FEDIOL said in a statement on 25 May.

Over the last five months, prices for rapeseed oil had dropped by over 30% to €800/tonne (US$857/tonne), driving down physical rapeseed prices for spot delivery from €625/tonne (US$669/tonne) to €410/tonne (US$439/tonne) over the same period, the report said.

In addition, futures prices for new rapeseed crops, which provide rapeseed farmers with a price indicator, had dropped this year from about €600/tonne (US$643/tonne) in early January to around €400/tonne (US$428/tonne) by mid-May, according to FEDIOL.

“This will not only impact rapeseed farmers’ revenue, but also future planting decisions,” FEDIOL said.

“These trends cannot be explained by other market developments and are a signal that there is abnormal market behaviour. The magnitude of biodiesel imports’ growth is such that it raises questions as to the authenticity of their classification as originating from waste streams. There is urgent need to investigate the legitimacy of these imports.”