Oilseed consumption estimates fall on the back of reduced demand
World consumption of oils is forecast to decrease by up to 500,000 tonnes compared to that seen in 2019, due to less biodiesel and food demand.
In the UK, vegetable oil demand remains weak due to the reduced requirements from restaurants and the wider food industry. With lockdown and social distancing guidelines still in place, it is not known when this demand may pick up or return back to 'normal' levels, although it is thought to run through until the second half of 2020 at least. As a result, UK crushers are also running below full production.
In Europe, the poor autumn planting conditions have been well documented. There are now reports of recent frost damage, with a lack of rain seen until this week and crops experiencing a short flowering period. As such, predictions are that the crop will reach 16.7 million tonnes – a 14-year low.The weaker sterling has provided some positive news for long holders of UK oilseed rape, but prices near £300/tonne have been heavily impacted by the widespread reduction in demand.