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German rapeseed market quiet on biodiesel worryReuters News HAMBURG, Aug 16 (Reuters) — A continued sharp fall in German biodiesel sales coupled with low profit margins among vegetable oil mills continues to reduce business in the country's physical rapeseed market, traders said on Thursday. Germany's once-booming biodiesel industry is said by its industry associations to be working at only 50 to 60 percent of its four million tonnes annual capacity, largely because of the German government's biofuels taxes which have greatly reduced the price advantage over fossil diesel. «With the government planning a further tax rise on biodiesel in January (2008) the outlook for the biodiesel industry is very uncertain,» one trader said. «Some biodiesel producers are saying they may close plants if the second round of tax increases goes ahead.» «It is hard to say where the rapeseed crop will go if biodiesel demand evaporates.» Meanwhile, the current high prices of oilseeds generally was cutting oil mill's profit margins, making them only sluggish rapeseed purchasers, traders said. Germany's rapeseed crop is likely to be down this year following rain during harvesting in July and August on plantings already weakened by a drought and heatwave in the spring. Analysts' forecasts of this year's harvest range between 5.1 to 5.3 million tonnes, down from 5.34 million tonnes last year despite a seven percent increase in planted area. Harvesting is now finished. «The size of this year's harvest is not a major price factor this year,» one trader said. «The international commodity price background is dominating…the German market has lost its own price dynamism.» «There is expectation that investment funds will move more money into commodities because of the current weakness in equity markets and German rapeseed prices could benefit from this.» Some farmers, especially in south Germany, were starting to sell rapeseed more aggressively. «Farmers are holding back new crop wheat and malting barley, which they see as having the greatest potential for price rises, and selling rapeseed,» one trader said.
Date: 16.08.2007 Leave your comment
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