BBC News - Who what why: Why is there more oilseed rape being grown? - 31 views
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Why is there more oilseed rape being grown?
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Adam Seldis on 30 May 12This looks like it might a supply issue - so microeconomics supply and demand
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more than ever before
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So there has been a shift outwards in supply. I can show this on a diagram. However I need to explain why it has shifted.
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rocketing prices as it becomes more desirable for food
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So the only way this can be explained is that demand has increased more than the increase in supply, therefore leading to a 'rocketing' in prices. Again, would be good if I could explain why.
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- ...9 more annotations...
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£388 per tonne, which compares to £240 in 2010
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I can use these numbers on my diagram. 240GBP was the original equilibrium price, 388GBP the new equilibrium.
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698,000 hectares in England and Wales and around 37,000 hectares in Scotland have been sown with oilseed rape this year, up about 6% on last year
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rapeseed oil is actually one of the highest quality vegetable oils, and it has gained a certain culinary respectability over recent years.
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"It's being used as mayonnaise, in margarine, salads, anywhere vegetables are used. It has a good health profile, has low saturated fat, is high in omega-3, and some claim it is better than sunflower oil," he say
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The UK's "consistently high yields" of rapeseed have made the crop a success, according to Gagen.
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Other places like Germany, Poland and Ukraine have had a dreadful winter, the crops were exposed to severe cold temperatures, I suspect the French suffered as well.
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I can bring in here the concept of substitute goods - that German etc rape crops are a substitute good. That their fall in supply will have lead to an increase in the price for them, leading to a fall in demand. This will have lead to an increase in demand for UK rape crops. Could show this diagrammatically if needed.
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and they are 45% oil - and the other 55% is high protein animal feed - they are an amazing piece of nature," he says. Burnett says oilseed rape is also being used for biodiesel, while a very small amount has specialist industrial uses, for instance as lubricants.
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Again, this explains the surge in demand. It has a number of different uses. (Called composite demand).
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Burnett says oilseed rape has probably been more visible this year because it has flowered for almost twice its normal length of time - eight weeks, instead of four - as a cold and wet April and May stopped flowers developing and dying at their normal rate.
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We could start to use this as some kind of evaluation - the fact that there might not have been a shift in supply at all.
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So, overall, I could write a commentary about how a small shift in supply and a large shift in demand has led to an increase in the price for rape seed. I can easily show this with a diagram and explain the factors behind each movement. I would need to show the shift in supply being less than the shift in demand. For evaluation I could start to look at the impacts of PED and PES. Might they be inelastic or elastic and how might this impact the price mechanism. I could also speculate a little about what might happen in the future, based on the information in the article, and its impact on the price of rape seed in the UK
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This is the article I would like you to read first. You may not use this one in the future.
