Markets

Rapeseed oil consumption growing globally

Grain Central, February 22, 2019

WORLDWIDE consumption of rapeseed – or canola – oil has been increasing, with an estimated 31 million tonnes (Mt) consumed in 2017; an increase of 7.3 per cent on the previous year, according to US-based market researcher, IndexBox.

Overall, total consumption indicates a remarkable expansion from 2007 to 2017: its volume increased at an average annual rate of 5.6pc over the last decade.

The trend, however, indicated some noticeable fluctuations throughout the analysed period.

Based on 2017 figures, rapeseed oil consumption increased by 71.7pc against 2007 indices.

The growth pace was the most rapid in 2009, with an increase of 14pc against the previous year.

Over the period under review, global rapeseed oil consumption reached its maximum volume in 2017, and is expected to retain its growth in the immediate term.

Revenue hike

The global rapeseed oil market revenue amounted to US$33 billion in 2017, jumping by 12pc against the previous year.

This figure reflects the total revenues of producers and importers (excluding logistics costs, retail marketing costs, and retailers’ margins, which will be included in the final consumer price).

In general, the total market indicated a strong growth from 2007 to 2017: its value increased at an average annual rate of 5.6pc over the last decade.

Consumption growth

Based on 2017 figures, the rapeseed oil consumption increased by 18.9pc against 2015 indices.

The pace of growth was the most pronounced in 2008, when the market value increased by 38pc year-to-year.

Global rapeseed oil consumption peaked at $35 billion in 2012; however, from 2013 to 2017, it stood at a somewhat lower level.

China, Germany, India, US

The country with the largest volume of rapeseed oil consumption is China (7.2Mt).

Rapeseed takes up to around 20pc of the total vegetable oil consumption there.

Being the largest rapeseed oil producer too, this country alone accounted for 23pc of total consumption in 2017.

Moreover, rapeseed oil consumption in China exceeded the figures recorded by the world’s second largest consumer, Germany (3.2Mt), twofold.

The third position in this ranking was occupied by India (2.8Mt), with a 9.3pc share.

In China, rapeseed oil consumption expanded at an average annual rate of 4.2pc from 2007-2017.

The United States showed the highest growth rate (12pc) over the 10 years observed, as the media actively spreads the health benefits of rapeseed oil consumption.

The remaining consuming countries recorded the following average annual rates of consumption growth: Germany (0.1pc per year) and India (2.0pc per year).

In value terms, China ($7.9 billion), India ($5.6 billion), and Germany ($2.9 billion) constituted the countries with the highest levels of market value in 2017, with a combined 49pc share of global market.

These countries were followed by the US, France, Poland, Japan, the UK, Canada, Belgium, Mexico, and the Netherlands, which together accounted for a further 34pc.

In terms of the main consuming countries, the Netherlands experienced the highest rates of growth (25.0pc per year) with regard to rapeseed oil consumption, over the last decade, while the other global leaders experienced more modest paces of growth.

Consumption expected to decelerate slightly

The rapeseed oil industry should expect growing demand worldwide from rising income and urbanisation.

GDP per capita in both China and India are growing, and in the former country, it is supposed to gain more than 50pc of the current income level.

Nevertheless, the global trade, especially between China and the US, is becoming less liberalised.

These are the two major economies that are implementing import tariffs to protect domestic industries from potential harms of international competition.

In the few past decades, protectionist measures have caused income and GDP to slow down in countries adopting such measures, and thus similar effects are expected in the medium term today.

At the same time, in light of the rising tariffs, Chinese farmers and manufacturers have reduced access to the US produced soybean.

Therefore, some of them are switching to growing oilseed rape plants for rapeseed oil production to sustain profits and shares.

This would ameliorate the declining production of rapeseed oil in China and have a positive effect on the demand too.

Biodiesel impact

Rapeseed oil demand dynamic would also be affected by the global demand for biodiesel produced out of it.

Currently, biodiesel production is expanding in developed countries, namely in the US.

On the other hand, the demand for biofuel is set to expand worldwide, especially in the EU, where about two thirds of the total amount of the rapeseed oil consumption is intended for biodiesel.

Asia, particularly China, is also a major contributor into the global growth of biofuel market, with demand for fuels increasing consistently.

Therefore, driven by increasing demand for rapeseed oil worldwide, the market is expected to continue an upward consumption trend over the next eight years, although some degree of deceleration seems inevitable.

Market performance is forecast to decelerate slightly, expanding with an anticipated CAGR of 4.5pc for the eight-year period from 2017 to 2025, which is projected to bring the market volume to 39Mt by the end of 2025.

Source: IndexBox, https://www.indexbox.io/store/world-rapeseed-oil-market-report-analysis-and-forecast-to-2020/

 

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