http://www.planetark.org/dailynewsstory.cfm?newsid=11474 Planet Ark German rape prices boosted by biodiesel, weak euro
UK: July 9, 2001 LONDON - German rapeseed prices ratcheted higher this week, propped up by firm demand from the biodiesel industry and the potential of the bumper German crop to meet orders unfilled by other EU producers, traders said on Friday. Solid buying from Germany's producers of biodiesel fuel, a cheap local alternative to petrol, has also kept rape oil at a hefty premium over soyoil - and demand is expected to rise as the industry builds new capacity at its crushing plants. The rape/soy oil premium was holding steady at around 30 euros a tonne for August/October deliveries basis Rotterdam, marginally lower than last week. Premiums for November/January weakened to around 50 euros from around 60 euros last week. These premiums are still the highest for several years. "Rape oil prices have been a lot higher than soyoil for a long time," said Karl-Josef Gross, analyst at German oils mills association VDO. "In the past it used to be the opposite with rape cheaper than soyoil - now there's a big difference." "The main reason is that there is demand for rapeseed oil from biodiesel and the food industry," he said. Analysts say consumer concern over the safety of genetically modified (GM) crops has hastened the food industry's switch to rape oil from soyoil due to the difficulty of guaranteeing the GM-free status of some soybean imports into European countries. At the same time, the biodiesel industry is expanding its crushing plants and capacity is seen rising from 300,000 tonnes at the end of last year to 1.2 million tonnes by mid-2002. "The capacity in Germany is increasing rapidly at the moment. There is a huge demand for this purpose alone and this increases the demand especially for rape oil," said Florian Gay, analyst at Hamburg-based industry newsletter Oil World. "Rapeseed has an upward potential for next season because production is not seen as rising sufficiently," he said, referring to lower crop expectations in Canada and the European Union - with the notable exception of Germany, which is forecast to produce more than 40 percent of EU output this year. SOARING FUTURES, WEAK EURO LEAD GERMAN SEED PRICES HIGHER Cash rapeseed delivered Kiel/Hamburg for August was last quoted at 465.00/470.00 marks per tonne, up from 440.00/445.00 a week ago. November rapeseed also rose during the week and was quoted at 482.50/487.50 against a previous 457.50/462.50 marks. German seed prices were also boosted by the euro's weakness against the dollar this week, making exports more attractive, and soaring rapeseed futures on the Paris Matif exchange on the back of limited availability at the tail-end of the old crop. French rapeseed futures jumped to new contract highs on Thursday on worries that production and yields might be lower than previously expected, mainly due to poor weather conditions. This should be good news for Germany, where yields are expected to be higher than usual this year. "Weather conditions were much better than last year, there was no problem in the winter with freezing and there was also enough rain in eastern Germany," VDO's Gross said. Last year, for example, rapeseed farmers in the northeastern states of Brandenburg and Mecklenburg-Vorpommern saw lower final yields due to months of low rainfall, Gross added. The improved yields in Germany's northern states, where areas planted to rape have also risen this year, are expected to drag the average national yield up to more than 3.50 tonnes per hectare from the 3.30 tonnes seen last season, analysts say. "The rise in rapeseed planting this year has moved more into the north and east of Germany so even the higher-yielding areas will produce more so we're expecting quite a high average yield for the whole of Germany," said Oil World's Florian Gay. German traders say they do not expect much delay in new-crop supply despite the delayed end to spring sowing this year, as old-crop stocks are still sufficient to meet demand. In addition, much of this year's crop is already sold in advance as farmers took advantage of firm prices earlier in the year. "The prices for harvest-time (quoted) earlier this year were already much higher than a year ago so lots of people made forward contracts, they have locked the price in," said one. Many of these contracts are believed to be mostly for delivery at harvest-time or for the October/November period. Story by Jeremy Smith REUTERS NEWS SERVICE Biofuel at Journey to Forever: http://journeytoforever.org/biofuel.html Please do NOT send "unsubscribe" messages to the list address. To unsubscribe, send an email to: [EMAIL PROTECTED] Your use of Yahoo! Groups is subject to http://docs.yahoo.com/info/terms/
