Spot prices for vegetable oils have risen significantly in the wake of a rally for palm and soyabean oil, with rapeseed oil hitting a three-year high of €830/tonne in October, Germany’s Union for the Promotion of Oil and Protein Plants (UFOP) said on 27 October.

The especially sharp pick-up of rapeseed oil prices was also driven by rising feedstock costs and the weak euro encouraging exports.

“Feedstock prices are also supported by the fact that conditions for harvesting rapeseed have been less than optimal following snowfalls in Canada,” UFOP said.

“Moreover, the European biodiesel industry has an increased demand for rapeseed oil because it has to comply with the quality requirements for winter diesel as laid down by the biodiesel standard.”

UFOP said that rapeseed oil was now more expensive than sunflower oil on the European vegetable oil market in Rotterdam.

“In Germany, the situation is exacerbated by the low water levels on inland waterways. On the one hand, feedstock cannot be delivered, and, on the other, vegetable oil cannot be called forward.”

Agrarmarkt Informations-Gesellschaft GmbH reported that the rally on the futures market was triggered by a reduced supply outlook for palm oil and small supplies of soyabean oil in the USA, UFOP concluded.