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Factors Hindering the Growth of the Global Rapeseed Oil Market

Mar 15, 2018

In 2015, the Telegraph UK came up with an article on rapeseed oil headlined, “Goodbye, olive oil: why we’ve all fallen in love with rapeseed.” Even today, the headline perfectly outlines the growing popularity of rapeseed oil as a healthier home-grown option. Consequently, it is also the third-largest source of vegetable oil in the world after palm oil and soybean oil. The oil is extracted from the seeds of the Brassicaceae flower, which is a common crop in Europe. Rapeseed oil is commonly used in culinary applications such as sautéing, frying, and baking. It is preferred over other oils due to its higher smoke point compared with other vegetable oils. This oil has higher essential fatty acid contents and has the lowest saturated fat levels compared to any other oil. Owing to such health benefits, the demand for rapeseed oil is on the rise in emerging economies such as China, India, and Brazil. The procurement market intelligence report from SpendEdge estimates the market to grow at a CAGR of 4.64%. Although the market faces a healthy growth prospect, suppliers in this market have to overcome a few challenges to take advantage of the market’s growth.

Request Free SampleChallenges in the Rapeseed Oil Market

Threat from disease and crop infection

The rapeseed plant can be affected by series of infection which affects various parts of the plant across its lifecycle. For instance, fungal diseases such as Sclerotinia stem rot is caused by the fungus Sclerotinia Sclerotiorum, and the fungus Leptosphaeria Maculan causes blackleg. Such infections are further complicated by rainfall, as it drives up the infection rates. For instance, in Australia, a prolonged period of rainfall resulted in yield losses of about 25% in 2016. A severe reduction in the crushing volume increases the prices for rapeseed oil. To tackle such problems, regulatory bodies across regions have created guidelines for cultivators to manage aspects such as field selection, use of fertilizers, weed control, and harvest cycles for rapeseed.

Wide range of available substitute

The vegetable oil market has a wide range of substitute products available. Be it in the field of food applications or non-food applications, the number of oils available is enormous. For instance, people across the world use either sunflower, safflower, coconut, olive, soybean, or peanut oil for culinary applications. Also, rapeseed oil can be substituted by soybean, kernel, or palm oil in non-food applications. Dietary revolution is a major factor in determining the preference for a particular kind of oil. Over the last few years, people are increasingly using extra virgin olive oil due to its light and fruity flavor and other health benefits. According to industry estimates, the consumption of olive oil increased by 250% and 1,400% in the US and Japan, respectively, in the last 25 years.

Adulteration and contamination

Suppliers in the vegetable oil market are adulterating edible oils with inexpensive oils such as bran and cottonseed oil to save costs. Such cases are prominent in emerging economies where the supply chains are not structured. Such adulteration and contamination can have serious health issues as well. For instance, in the spring of 1981, adulterated rapeseed oil created toxic syndrome that affected about 25,000 people. Also, the mixture of mustard oil with inexpensive argemone oil causes dropsy disease, which causes oxidative stress and the death of RBCs. It is possible to use brassicasterol to detect adulteration of rapeseed oil.

Health and safety issues

Although rapeseed oil is considered to be more healthier than other oils, its high content of omega-3 fatty acid can make it rancid and foul when exposed to oxygen and high temperatures. Additionally, some reports link consumption of canola oil with kidney and liver diseases, hypertension and stroke, and retarded growth among infants. The availability of such reports could affect the sales and consumption of canola oil.

Read more about the challenges in the rapeseed oil market along with supply market insights, procurement best practices, sourcing models, and key suppliers in SpendEdge’s upcoming report on the global rapeseed oil market.

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