Rapeseed prices fall following oil prices, but rapeseed prices in Ukraine are rising, but farmers have suspended export sales pending settlement of customs duties

Statements by Ukrainian officials about a quick settlement of the procedure for exporting rapeseed and soybeans without paying duties by producers led to farmers suspending sales and deliveries pending the government's decision. This increased pressure on export prices as traders resumed purchases and planned new ships for rapeseed.

Farmers' doubts about the feasibility of exporting rapeseed and temporary (as customs officials explained) payment of duties were reinforced by the statement of the Chairman of the Verkhovna Rada Committee on Finance, Tax and Customs Policy D. Hetmantsev that duties paid for soybeans and rapeseed may not be returned to farmers. "Already UAH 200 million in duties from soybean and rapeseed exports have been received by the budget, and they should go to the needs of the army, and avoiding paying 10% of the duty with the help of dubious certificates is a blow to the country's defense capability," he said.

Export demand prices for rapeseed in Ukraine increased by UAH 100-200 per week to UAH 23,300-23,600/t or $540-550/t with delivery to Black Sea ports, while processors left their prices at UAH 22,500-23,500/t with delivery to the plant.

November canola futures in Winnipeg fell 1.7% to CAD 605/t or $ 435/t yesterday (-1% for the week, -4.1% for the month) following a 3.3% drop in oil prices on the day. Delayed canola harvests and reports of wheat and canola sprouting due to rains support prices above CAD 605/t, although analysts had expected them to decline to CAD 560-580/t amid China's tariffs and export blockade.

Diplomats may have been able to resolve the Canadian canola issue. Traders are expecting a resolution to the tariff issue with China, especially after Canadian Prime Minister Mark Carney met with Chinese Premier Li Keqiang at the United Nations in New York to discuss trade issues, including canola exports.

Rapeseed quotes on the Paris stock exchange also fell 1% yesterday to €465.25/t or $545/t under pressure from lower canola and oil prices, but Canadian canola, even at a $110/t discount to European rapeseed, is not yet being actively contracted by European processors as Canadian farmers await the resumption of exports to China.

Recall that Canadian farmers have threshed only 45-50% of canola acreage as of September 23 (compared to 70-75% on average), and new precipitation forecast this week will delay the harvest. Therefore, markets will expect the harvest to be completed, and any bad weather (and usually in Canada from October 10-15, temperatures drop sharply and snowfall begins) could lead to a speculative increase in quotes.