Surprising 2023/24 rapeseed season in Ukraine, despite 5 EU member states banning rapeseed imports

UkrAgroConsult

Article author:

Svitlana Kupreeva

Oilseed Market Analyst

Ukraine harvested a record 4.2M mt of rapeseed this year. Despite the EU ban and the grain corridor termination, the rapeseed market is very optimistic. This suggests the full export potential can be realized by redirecting trade flows to the Danube ports and overland transit routes. Big volumes of rapeseed were transited thru the territory of the 5 neighboring countries to other EU member states.

The 2023/24 export potential of the rapeseed, rapeseed oil and meal is estimated at a record level.

UkrAgroConsult’s forecast of a sharp increase in rapeseed crushing is fully justified. The 2023/24 season is likely to see unprecedented crush volumes. The main reason for this is the high rapeseed crush margin. This has encouraged not only big companies, but also much smaller market players to increase their crushing. Some of the players had never been involved in crushing before.

In fact, the ban on rapeseed imports to the five neighboring countries was a good incentive to increase rapeseed processing in Ukraine.

The MinAgroPolicy of Ukraine predicts winter rapeseed area will decrease by more than 10% to 1.2 M ha in 2023 autumn.

In recent years, the level of under-reporting by farmers has increased, so that UkrAgroConsult’s own estimates/corrections of officially projected/reported areas are common not only for sunflower, but also for other oilseeds. Is it safe to say that the actual rapeseed area will be higher than the officially forecasted/reported area? And if so, by how much?

However, there is still a rainfall deficit in almost all of Ukraine and soil dryness is spreading, which is unfavorable for sowing winter crops for the 2024 harvest. The regions most involved in rapeseed production are at risk.

However, dry conditions during the winter rape sowing season are not new to Ukraine. Farmers face this phenomenon almost every year. They often shift the sowing dates a little, and sometimes even the sowing is shifted to a date much later than the best time for sowing.

In any case, the area under winter rape is expected to decrease in 2023, while oilseeds incl. rape traditionally win in terms of profit. The poor weather currently being reported in Australia and South America is likely to reduce oilseed production there and may help to increase production margins for rapeseed and other oilseeds.

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Tags: Ukraine, export, EU, rapeseed, supply and demand balance, sowing, restrictions