Look at Britain’s fields and you’ll see our green and pleasant land is turning a cheerful shade of yellow. UK rape planting is thought to have hit an all-time high this year as British farmers take advantage of the high prices being demanded for rapeseed - base ingredient of many vegetable oils - and other edible oils.
The European rapeseed crop was hit by frosts, with some observers predicting yields at a five-year low. This has given British farmers an opportunity to reap the rewards of increasing plantings for the third year in a row, with acreage estimated to be as much as 7% up on last year. “The UK came out of this winter OK, but it killed a lot of the crop in Europe - particularly along the German/Polish border and further east,” says HGCA analyst David Eudall.
Reduced global demand and buyers switching to less expensive palm kernel oil continue to put downward pressure on coconut oil prices, which are now nearly 40% below 2011 levels, having fallen by a further 16.6% in the past month. Exports from the Philippines - the world’s main exporter of coconut oil - were down 40% year-on-year in April.
Meanwhile, the price of rice has risen by 6.7% month-on-month and is now up 22.2% year-on-year amid concerns about tighter supplies following the Vietnamese harvest.
Prices were further supported by the Thai government extending its rice intervention scheme to the end of June and buying up greater quantities of the crop.
Much of the UK crop is used by the local food industry, although some analysts are predicting strong UK yields will give farmers the opportunity to export more to Europe.
Because of rising export demands, oil users in the UK claim there is little to indicate the price they are paying for sunflower or vegetable oil will drop substantially in the near future. In recent weeks, sunflower oil prices - rising since the autumn - were pushed up further by reports of a fire badly damaging a French refinery, with one importer saying this had increased the cost by as much as £45/t, although prices have since started to drop.
Sunflower and rape prices may also have been held up by rising demand for soy, which is set to be exacerbated by drought damaging the crop in South American, one of the main producers. The appetite for soy has been strong in China - imports are up 50% in the past five years - which has had a knock-on effect as some users dip into sunflower and rape to bolster supplies.
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