Food and biodiesel demand supports rapeseed prices as vegetable oils outpace grains
Global vegetable-oil demand has increased by an average of 5.66 million tonnes annually over the past decade, supporting rapeseed oil and seed prices. In Europe, an estimated 56.6% of rapeseed oil production in 2026-2027 will be used for biodiesel.
Vegetable-oil demand separates from grain markets
Expanding consumption of vegetable oils for food and biofuels is supporting rapeseed prices and changing the balance of the European oilseed market. Sébastien Poncelet, development director at Argus Media France, said at a press briefing on 27 August 2026 that the effect of steadily rising global demand was visible in prices.
According to La France Agricole, prices on the European Rotterdam market have almost doubled compared with their average level during 2016-2020. Poncelet described the market during 2015-2020 as relatively subdued before prices surged in 2020 amid the Covid pandemic and subsequently the war in Ukraine. Grain prices later eased and remained lower, but vegetable oils did not follow the same path because consumption continued to grow in both food and biofuel markets.
Global consumption adds 5.66 million tonnes a year
Argus Media estimates that global vegetable-oil demand has increased by an average of 5.66 million tonnes per year over the past decade. Within that expansion, industrial demand has added 2.24 million tonnes annually, mainly for biofuels, while food use has grown by 2.82 million tonnes a year. These two outlets provide a broader demand base than a market dependent on a single end use.
The figures also help explain why vegetable oils have remained firm after some of the exceptional pressures associated with the pandemic and the war in Ukraine diminished. For rapeseed processors, stronger oil demand raises the value of the principal product obtained from crushing. For growers and traders, that support is transmitted back to seed prices, although crushing margins, competing oils and regional supply conditions can affect the strength and timing of the transmission.
Biodiesel dominates European rapeseed-oil use
Biodiesel is the largest outlet for rapeseed oil in Europe. Argus Media estimates that 56.6% of European rapeseed oil production in the 2026-2027 season will be directed to biodiesel, and describes the segment as growing. This concentration makes fuel demand and biofuel regulation particularly important for crushers, biodiesel producers and oilseed traders.
The statistical relationship between products is strongest near the crushing stage. Poncelet put the correlation between rapeseed oil and rapeseed seed prices at 83% in recent years, reflecting the importance of oil as the crop's primary outlet. Rapeseed oil and rapeseed biodiesel prices also show an 80% correlation. By contrast, the correlation between rapeseed biodiesel and seed prices falls to 50%.
Processing and regulation weaken price transmission
The weaker direct relationship between seed and biodiesel reflects two successive industrial stages and competition from alternative products at each stage. Once the supply chain reaches finished fuels, additional factors—particularly biofuel regulation—have a greater influence on pricing. A change in biodiesel policy can therefore move the value of the finished product without producing an equivalent or immediate change in rapeseed prices.
The market is also gaining a new risk-management instrument. CME Group has launched a rapeseed oil futures contract quoted in euros per tonne and settled against the Argus Media “rapeseed oil FOB Dutch Mill” price benchmark. Poncelet said the contract is intended to improve price transparency and provide another way to manage risk in what he described as an extremely volatile market. Its development will be relevant to processors and traders seeking a hedge more closely linked to the European physical oil market.
