Rape prices in Ukraine are rising, despite falling canola prices

The mass harvesting of rapeseed in Ukraine has not yet started, but traders who have contracted significant volumes of rapeseed are actively raising purchase prices at the ports in order to accumulate the maximum lots, as the decrease in the harvest in the new season will significantly increase competition with processors.

 

During the week, export purchase prices for rapeseed in the Black Sea ports increased by $15-20/t to $430-450/t or UAH 19,000-20,400/t, which corresponds to the level of forward prices and contributes to the activation of sales by producers. Demand prices for rape with delivery to the Czech Republic and Romania are 430-440 €/t, and to Germany - 440-450 €/t, but deliveries are possible no earlier than September.

 

Spike Brokers experts believe that 600-800 thousand tons were sold under forward contracts in Ukraine with delivery in July-January in all export directions. At the same time, domestic processors will not be able to compete with exporters and will be forced to expect a July price decrease under the pressure of increased supply.

 

Favorable weather in Canada is improving the outlook for the canola crop, putting pressure on prices. Thus, during the week on the exchange in Winnipeg, July canola futures fell by 0.8% to 600 CAD/t or $440/t (-12.2% for the month), and November - by 1% to 618 CAD/ t or $453/t (-12.1%). In the current season as of June 16, Canada exported 5.8 million tonnes of canola, down 21% from last year's pace, so unsold stocks are putting pressure on quotes as harvest approaches.

 

On the Paris MATIF, August rape futures rose 1% during the week to €462/t or $496/t (-6.2% on the month), supported by forecasts of a lower EU harvest, but still under pressure from falling prices on canola

 

In the June report, the experts of the MARS agency reduced the forecast of rapeseed yield in the EU in 2024/25 MR from 3.21 to 3.16 t/ha compared to May estimates, while the average 5-year indicator is 3.17 t/ha. Rains and low temperatures in Germany and France worsen the outlook for the harvest.

 

According to the FEDIOL association (oil and protein producers in the EU), in May rapeseed processing in the EU reached 1.576 million tons, which was 8.5% higher than the 5-year average. However, it will decrease in June as a result of carrying out regulatory work at oil factories, although in general in 2023/24 the EU countries + Great Britain will process more than 26 million tons of rapeseed.

 

We will remind that in the new season the European Union will need to compensate for the lack of supplies of rapeseed meal from the Russian Federation and Belarus, of which 316 and 254.5 thousand tons were purchased in the 2023/24 MR, respectively, or 40% and 32.5% of all imports, while deliveries from Ukraine amounted to only 161.3 thousand tons (20% of imports). For this, the EU will be forced to additionally import more than 1 million tons of rapeseed.