Pressure on the price of palm oil has impacted the cost of vegetable oil and presents potential volatility for that of rapeseed oil, according to the latest figures by the Agriculture and Horticulture Development Board (AHDB).

The Board said that the return of wheat exports from the port of Odessa and a general fear of recession are among the key factors driving large price volatility in the global oil markets. According to the report, domestic rapeseed prices have also been affected.

The latest outlook for Paris rapeseed futures dropped £34.22/t, to £545.10/t.

AHDB said that there are other developments in the vegetable oil market that could potentially influence rapeseed prices further. Greater pressure on the demand for palm oil, driven by the lifting of an export ban in Indonesia, has meant that in recent weeks, the “floor” of the vegetable oil complex has been pressured.

According to AHDB, the price of palm oil will continue to play its part in underpinning the vegetable oil market over the coming months. If that floor on palm oil reduces, it will open the opportunity for the price of other oils to drop too. This in turn will influence rapeseed oil, which will impact the price producers receive for their rapeseed at the farm gate.

However, AHDB noted that there are some “supportive factors” that are providing some assistance to the vegetable oil market. These include the US’ current soyabean crop and the recent dry weather in Europe that has reduced output for EU sunseed.