A leading global soy player, the firm will build up softseed-crushing capacity at Oelmuhle Hamburg.
"The company's current customer base has created additional demand, which requires the conversion of some soy capacity to rapeseed capacity," ADM said today.
The US firm hopes the move will enable it to meet growing demand for rapeseed and soy product customers, while continuing to feed growing needs in biodiesel.
Rape seed, palm oil and soybean are all experiencing strong market growth as food makers continue to turn away from animal fats in favour of vegetable alternatives.
By 2008 analysts Business Communications Company predict these key vegetable edible oils will account for 69.9 per cent of the US market alone.
Today, soybean and palm oil combined account for over half of all oil consumed in the world.
After tight crops in 2003, soy oil has come in at 35 million tons for 2004, offering some relief to prices, that in 2003, hit 15 year highs. Today, soy oil is selling for about $470 (€359) a ton.
The third largest vegetable oil crop, rape seed oil, reached 15 million tons and is currently trading at about $666 (€509) a ton.
"Rape oil prices have been rising on the back of increasing demand from food and biodiesel industries, despite record global supplies," Josh Dadd, an economist at the UK Home Grown Cereals Authority (HGCA), recently told FoodNavigator.com.
The fourth largest vegetable oil crop, sunflower seed oil, reflects a similar picture to rape see oil, with prices becoming bullish on a tighter balance sheet. For 2004, world production reached 10 million tons. Prices are currently trading at around the $690 (€527) mark.