Rapeseed and canola prices continue to rise following oil prices, which stopped the fall in rapeseed prices in Ukraine

Oil quotes rose by 20% in a week amid the escalation of the war in the Middle East, and September Brent crude futures crossed the psychological threshold of $100.6/barrel (+36% for the month), which gave an additional boost to rapeseed quotes in Paris and canola in Winnipeg, which were rising in price due to export restrictions from the Black Sea.

Grain exports from Ukraine through Black Sea ports have virtually stopped due to shipowners' refusal to load vessels due to targeted Russian attacks on civilian vessels, as well as damage to grain terminals in ports.

November rapeseed futures on the Euronext Paris exchange have increased by another 3.3% over the past 7 days to €563.5/t or $641.5/t (+7.8% month-on-month), while August futures have decreased to €544/t due to a sharp increase in supply with delivery in August.

European farmers have significantly increased the supply of rapeseed at prices that have risen sharply from €500/t to €540-560/t with delivery to the factory, so processors are already supplied with supplies until October - November and are not ready to accept rapeseed from Ukraine, the supply of which farmers have also significantly increased directly to factories, and not through international traders.

On the ICE exchange in Winnipeg, November canola futures rose 6.5% to CAD 836/t or $593/t over the past 7 days, adding 12.2% for the month amid a sharp rise in oil prices.

In Ukraine, export demand prices for rapeseed at ports are practically non-existent, and demand prices with delivery to the western border decreased by 10-20 €/t to 460-470 €/t or 525-535 $/t under the pressure of a sharp increase in supply and the lack of possibility of deliveries to terminals in August and September.

Processors have reduced their purchase prices by UAH 2,000-2,500/t to UAH 21,000-22,500/t ($415-440/t excluding VAT) delivered to the plant during the week due to limited export opportunities for oil and meal and increased supply. According to processors, the volumes of rapeseed already purchased will be enough for processing until October.

We hope that traders will quickly restore rapeseed supply routes to the port of Constanta and find additional European trains for delivery to EU factories, taking advantage of the sharp decline in rapeseed prices in Ukraine and the rise in prices in the EU.

The increase in prices for Canadian canola and the reduction in rapeseed supplies from Ukraine pose a question to the EU as to where to get about 5-5.5 million tons of rapeseed to import in the new season, given the decrease in the harvest in Australia, so it is better for Ukrainian farmers to wait with rapeseed sales until October-November, when logistics will improve and the harvest volumes in Canada and Australia will become clear.