Analysts’ perception – how flexible is the demand of the EU?

Over the past six months, we have talked a lot about the value of a person who has gone astray.

Yesterday, November-21 Paris, the futures contract closed at 4 564.25 / t. Prices have been down so far this week, but the November 21 deal was € 187.80 / t from the previous 5 November contracts.

Alternative products, such as oilseeds and vegetable oils, stimulate demand. But while European guilt is on the rise, this is limited.

Demand for crude oil can be divided into two categories: food and industry. According to the USDA, the EU’s demand for rap oil is 25% for food and 75% for industry.

With a diet of interest, it is easier to switch from crude oil to alternatives, such as sunflower oil or palm oil. Converters are too heavy for industrial use, and this is a major demand for EU oil.

Industrial use includes biofuel and technical applications. Modification of animal feed for biodegradation is limited by EU climate. Biodiesel made from rapeseed oil has a lower melting point than palm oil or soybean oil, making it more suitable for the EU climate. Therefore, despite the high prices, the flexibility of EU oil use is limited.

Sunflower oil has closer properties to palm oil than palm oil or soybean oil. Consumption of sunflower oil in energy is very low (www.oilworld.biz) but is expected to increase in the EU.

According to the new EU Commission balance sheet, random oil consumption is at an all-time high from 2017/18. That said, Oilworld (www.oilworld.biz) Peg has consumed 3.8% year-on-year. Although rap oil is forecast to fall 6.3% year-on-year.

In addition, the global supply chain is incredibly tight. Earlier this week, Statistics Canada reported a 2021/22 cannabis crop with a 14-year low of 14.7 m.

Prolonged production is expected to increase in Ukraine year by year and increase in Australia. However, the market remains relatively stable. Annual growth forecast for exports from Ukraine and Australia is only 15% of Canadian exports with a forecast of 3.7Mt. These factors support a weakened price compared to other oilseeds.

Estimation for the future

Although rape values ​​are supported in the short term, and in this case, in the long run, long-term demand is no longer certain.

A key feature of the future is the EU’s agenda to offset the economy. This includes plans to reduce demand for palm and soybean oil from unsustainable sources. This is most recently listed in the RED II.

This could lead to a slight increase in arbitrary oil consumption in the medium term. This, in turn, supports British prices, and British physical prices are closely linked to the future of the Paris Rapis.

Long-term demand can lead to biofuels produced from used cooking oil (UCOME). It is still unmatched by any other technology in the world, but that could change in the future.

Transition to electric vehicles; Despite long-term expectations, this is something else to consider. It can also reduce the need for diesel and therefore bio-diesel.

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