31 August 2012 23:59 [Source: ICIS news]
Participants in both the European and UK hexane markets reported an increase in demand this week, citing interest from the oil extraction industry and buyers returning to the market from summer holidays as contributing factors.
A Mediterranean producer said the market wass experiencing a sustained level of demand due to hexane being used by the vegetable oil extraction industry, and was expecting demand to continue through to December, depending on harvest times in different countries.
Hexane is still regularly used in the oil extraction process for olive, soy and sunflower oils despite consumers steadily drifting away from chemically extracted oils.
A report released by Dutch agribusiness bank Rabobank showed Europe continues to be the leader in olive oil production, with Spain, Italy and Greece, accounting for 70% of the world’s olive oil production.
However, most growth is expected to come not only from Spain, but from the US, Australia, North Africa, the Middle East and Chile who, are focusing on producing high quality extra virgin olive oil, according to the report’s findings.
Despite the increase in market share, the production of extra virgin olive oil is via pressed techniques, rather than chemical extraction, which could limit the opportunities for hexane demand.
ICIS assessed hexane at $1020-1050/tonne FOB (free on board) Rotterdam this week.
($1 = €0.80)
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