Active demand from the EU supports the purchase prices for rapeseed in Ukraine at a high level

A lower than 2023 rapeseed harvest in Ukraine and a possible reduction in rapeseed production in 2025 are forcing traders to actively buy Ukrainian rapeseed, sometimes offering prices at which factories in the EU buy rapeseed from their farmers.

Rainfall has occurred in the western and central regions of Ukraine, which will improve the condition of rapeseed crops and allow to speed up sowing.

As of September 9, 534,700 hectares or 48% of the planned areas were sown with winter rapeseed in Ukraine, but the early sowings were badly affected by the drought.

During the week, export purchase prices for rapeseed in Ukraine increased by UAH 100-200/t to UAH 22,900-23,200/t or $490-495/t with delivery to Black Sea ports, so farmers intensified sales.

Demand prices for rapeseed with delivery to the factory in the Czech Republic or Germany remain at 465-475 €/t or 510-520 $/t, but road or rail deliveries in this direction are almost non-existent, as the cost of logistics is 60-70 $/t exceeds the cost of delivering rapeseed to the ports.

In the 2024/25 FY (as of September 8), the EU increased rapeseed imports by 46% compared to the previous season to 939,000 tons, of which 505,000 tons or 54% were supplied from Ukraine and 352,000 tons or 37.5% - from Australia.

The pace of canola exports from Australia decreased by 13% in July compared to the previous month, and by 20% in August (according to preliminary estimates). There are rumors that China will start buying Australian canola instead of Canadian, but there has been no shipment from Australia to China in the last 3 months.

Currently, the most available in the EU are Ukrainian rapeseed and Canadian canola (rapeseed with GMO), but processors are limited in the sale of meal from GMO rape, so they try to purchase the largest possible volumes in Ukraine.

China's intention to withdraw canola from Canada does not scare Canadian farmers, as processing capacity in the country continues to increase, and everyone is now interested in whether the strong demand for biofuel in North America will continue after the decline in oil prices.

November canola futures on the Winnipeg exchange fell 3.2% to CAD 570/t or $420/t since Monday (-2.8% for the month) following a 10% drop in oil prices for the week.

A downgrade in the outlook for world canola production and stocks in a new USDA report will support quotes.