Bunge rapeseed oil customers face extended disruption

By Jess Halliday

- Last updated on GMT

Related tags: Rapeseed oil, Lipid, Fatty acid, Omega-3 fatty acid

Bunge may increase the capacity of its rapeseed oil plant in Germany as it rebuilds after a fire in its preparation building, but production will be halted for 15 to 18 months in the meantime.

Fire swept the preparation room of the plant in Mannheim, Germany, on 26th April, and although it was controlled within a few hours and noone was injured, production at the site was halted immediately.

The plant crushed a 1.1.m tonnes of rapeseed a year, and use of the oil in foods has been growing in recent years largely because of awareness about its healthy profile: it is rich in omega-3 (ALA) and omega-6 fatty acids.

The company has said that it is considering increasing capacity at the site, but a apokesperson did not respond to an inquiry about the likely scale of the increase, or whether it would have been on the cards had the fire not occured.

In the meantime, however, supply to the food and feed industries will be interupted for a long time.

"We are doing our utmost to get the Mannheim plant operational and to minimize disruption to our customers. We will keep them informed on a regular basis,"​ said Bernd Koelln, Managing Director.

According to Reuters, the price of rapeseed oil increased after the fire, the cause of which has not been communicated. In April the price of rapeseed was US$914.95 per MT (FOB at Rotterdam), according to Index Mundi. But the likelihood that 15-18 months of less rapeseed on the market will cause some cost grief for industry users, an analyst from Euromonitor International told FoodNavigator.com that spot movements stemming from incidences like the Bunge fire tend to even out over time in terms of their impact on retail food prices.

After steadily rising for a year, the price of rapeseed oil hit a peak in July 2008 at $1736.46 a MT. Use of rapeseed by the biofuel industry contributed to this price hike story.

Since mid 2006 rapeseed crushings in Europe have increased from 15.7m to 22.8 m MT, according to Oil World. But it predicts that next year will see a stagnation or even a slight decrease in crushings – although much will depend on production levels in the EU27 (currently estimated at 20.9m MT.

“It has become partly too dry in some regions and favourable rainfall will be required in the near to medium term,”​ says Oil World.

Related topics: Market Trends, Fats & oils

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