Rapeseed: Cycles

What Canada's 2021 drought did to oil prices

The World Bank benchmark is for rapeseed oil, not seed. It averaged $1,440/t in September 2026, against $1,268 a year earlier and $1,629 five years earlier, during the 2021 Canadian drought. The ten-year range is $759 to $2,266. Rapeseed oil follows crude oil through biodiesel demand, and follows palm and soybean oil because they substitute. Weather in Canada, Europe and Australia sets supply. Farmers can expand acreage within a season, so high prices bring quick supply responses.

Rapeseed oil price

Chart: Rapeseed oil monthly price

Super-cycles in rapeseed

Rapeseed oil moves with the vegetable oil complex and, since the mid-2000s, with diesel because of EU biodiesel demand. The World Bank series (starting 2002) rose from $411/t in April 2002 to $1,592/t in June 2008, slid to $748/t by April 2015, then hit a record $2,266/t in April 2022. It was $1,440/t in September 2026. Booms come when weather cuts Canadian or EU crops at the same time as high energy prices; they end within one or two seasons because the crop is annual and area responds quickly. The long-run trend is a rising floor, as biofuel mandates absorb nearly 30% of oil supply.

1. 2006-2008

   EU biodiesel mandates, crude oil above $100/bbl and low oilseed stocks drove the first biofuel-era boom; the financial crisis ended it.

   World Bank monthly average from $411/t (April 2002) to $1,592/t (June 2008); 2009 average $872/t

2. 2010-2011

   Poor crops and strong Chinese buying lifted all vegetable oils again; record Canadian crops from 2013 then pushed prices down.

   $1,447/t (April 2011), down to $748/t (April 2015)

3. 2020-2022

   Drought cut Canada's crop to 14.2 Mt in 2021/22 from 19.5 Mt (USDA PSD); then the war in Ukraine cut sunflower oil exports and Indonesia briefly banned palm exports.

   $759/t (April 2020) to a record $2,266/t (April 2022); 2023 average $1,065/t

4. 2024-2026

   US renewable diesel demand for Canadian canola oil, a smaller Ukrainian sunflower crop and firm palm prices lifted prices again.

   $963/t (February 2024) to $1,522/t (June 2026); $1,440/t in September 2026

What drives the cycle

• Biofuel policy in the EU, US and Canada. Industrial use is 28.5% of rapeseed oil demand (2025/26); mandate and credit changes move demand by millions of tonnes.
• Canadian and EU weather. Canada and the EU grow 45% of world output; drought on the prairies or a bad European winter tightens supply quickly.
• Price spreads to soy, sunflower and palm oil. Buyers switch oils on price, so all four move together.
• China trade policy. China is the largest seed importer by value; duties on Canadian canola reroute trade.
• Crude oil and diesel prices. Set the value of rapeseed oil as fuel feedstock.
• India's import duties and MSP. Shape Indian crush margins and how much mustard oil competes with imported oils.

Metrics to track