Rapeseed prices in Ukraine are rising despite falling canola prices

Massive harvesting of rapeseed in Ukraine has not yet begun, but traders who have contracted significant volumes of rapeseed, actively raise purchase prices in ports to accumulate maximum parties, as the decline in the new season will significantly increase competition with processors.

During the week, the export purchase price of rapeseed in the ports of the black sea increased by 15-20 $/t to 430-450 $/t or 19000-20400 UAH/t, which corresponds to the level of forward prices and contributes to the intensification of sales by producers. Demand prices for rapeseed with delivery to the Czech Republic and Romania are 430-440 €/t, and to Germany – 440-450 €/t, but deliveries are possible not earlier than September.

Spike Brokers experts believe that 600-800 thsd tonnes of rapeseed were sold under forward contracts in Ukraine for delivery in July-January in all export directions. At the same time, domestic processors will not be able to compete with exporters and will have to expect the July price decline under the pressure of increasing supply.

Favorable weather in Canada improves the prospects for the canola crop, which puts pressure on prices. Thus, during the week on the Winnipeg Stock Exchange, the July canola futures fell by 0.8% to 600 CAD/t or 440 USD/t (-12.2% for the month), and the November futures – by 1% to 618 CAD/t or 453 USD/t (-12.1%). In the current season, as of June 16, Canada exported 5.8 million tons of canola, which is 21% lower than last year’s pace, so unsold stocks increase pressure on quotations as the harvest approaches.

On the Paris MATIF August futures for canola during the week rose 1% to 462 €/t or 496 $/t (-6.2% for the month), supported by forecasts of lower yields in the EU, but still remain under pressure from falling prices for canola.

In the June report, the experts of the Agency MARS lowered in comparison with the estimates of may forecast of rapeseed yield in the EU in 2024/25 MG from 3.21 to 3.16 t/ha, while the average 5-year average is 3.17 t/ha. Rains and low temperatures in Germany and France worsen the harvest prospects.

According to the Association FEDIOL (oil and protein producers in the EU), in May, the processing of rapeseed in the EU reached 1.576 million tons, which is 8.5% higher than the average 5-year average. However, in June it will decrease due to the maintenance works at the oil mills, although in general in 2023/24 MY the EU + UK countries will process more than 26 mln tonnes of rapeseed.

In the new season, the EU will have to compensate for the lack of rapeseed meal supplies from Russia and Belarus, which in 2023/24 MY amounted to 316 and 254.5 thsd tonnes, respectively, or 40% and 32.5% of the total imports, while Ukraine’s supplies amounted to only 161.3 thsd tonnes (20% of the total imports). For this purpose, the EU will have to import additional 1 mln tonnes of rapeseed.

Tags: Ukraine, Romania, EU, prices, France, rapeseed, Germany, Czech Republic