Rape prices in Ukraine remain under the pressure of low demand from the EU

Blocking the export of agricultural products from Ukrainian Black Sea ports increases the pressure on purchase prices, and low demand and prices in the EU almost paralyze trade in Ukraine.

In the EU, the increase in the rape harvest against the background of last year's significant stocks is putting pressure on domestic prices. According to the European Commission, the import of rapeseed to the EU in the new season has slowed down significantly, and for the period from July 1 to August 13, it amounted to 249.05 thousand tons, which is 63% lower than the 678.2 thousand tons for the same period of the 2022/23 FY. At the same time, deliveries from Australia decreased from 423 to 103 thousand tons, from Ukraine - from 176.3 to 20.1 thousand tons, while from Moldova they increased from 23.4 to 95.3 thousand tons.

The export of rapeseed from the EU in the 2023/24 MR also slowed down and amounted to 86.5 thousand tons on August 16, which is 45% lower than the corresponding indicator of the previous season (156.6 thousand tons), and 41.7 thousand tons were delivered to Canada rapeseed and to Great Britain - 41.1 thousand tons.

In Ukraine, the purchase prices for rape remain at the level of $365-375/t or UAH 14,600-15,200/t with delivery to Danube ports. The number of offers is increasing as producers prepare to harvest soybeans and sunflowers, which will exceed last year's harvest, putting pressure on prices for all oilseeds. In the western regions, the demand for rapeseed is higher, but truck queues of 6-12 days at the border with Poland and Romania limit prices to UAH 13,300-14,000/t for EXW-elevator and FCA-farming.

The queue of trucks for transit through Poland reaches 12 days at the border due to the delay of mandatory veterinary control, although rapeseed is mainly sent for processing into biodiesel (for technical purposes), which is not subject to veterinary inspection. The Polish authorities have already announced that they will not allow the import of Ukrainian grain after September 15, but it is unclear why its transit to the ports of Latvia and Lithuania and factories in Germany is being delayed.

The prices of physical demand for rapeseed in the EU remain at the level of 400-410 €/t DAP Germany, 390-400 $/t Romanian CRT ports, 390-400 €/t Baltic CRT ports, but with delivery in October - November. Many buyers are asking to stop deliveries under August contracts due to overcrowding in warehouses.

On Paris Euronext, November canola futures for the week rose 2.6% to €468.25/t or $509.7/t (-1.6% on the month) following Canadian canola prices, supported by a rally demand for soybeans in the US amid growing demand for biodiesel.

On the Winnipeg exchange, November canola futures were up 4.3% for the week at CAD795/t or $586.8/t (-5% on the month), but the start of harvest amid favorable weather will add pressure in the near term on prices