Purchase prices for rapeseed in Ukraine are falling against the background of a decrease in export demand

Increasing supplies through the Black Sea ports allowed Ukraine to increase rapeseed exports against the background of blocking borders with neighboring EU countries for 3 months. But most of the traders are ending their rapeseed export programs, so the demand for it is decreasing, and it is not worth counting on a rise in prices in the near future.

Rape prices in Ukraine remain at the level of $365-380/t with delivery to the Black Sea ports, but hryvnia prices increased during the month against the background of strengthening of the dollar by 5% to UAH 15,500-16,200/t. The lack of competition and the possibility of exporting to the EU by road allows traders to buy the necessary consignments at the port.

Demand prices for deliveries to Germany and the Czech Republic for the month fell by 10 €/t to 400-410 €/t, which makes them unprofitable for farmers in view of the 1.5-fold increase in logistics costs caused by the blocking of borders compared to August-September.

In December, rapeseed exports from Ukraine decreased by 17% compared to November to 290,000 tons, and in total in 2023/24 MR it reached 2.7 million tons from the forecasted 3.5 million tons.

The pressure on global quotations is intensifying the seasonal increase in canola supplies from Australia. According to the Australian Bureau of Statistics (ABS), canola exports in November increased by 43% compared to October to 544 thousand tons (761.7 thousand tons in November 2022), of which 129.9 thousand tons were delivered to Germany, 119 5 thousand tons - to the UAE, 118.2 thousand tons - to France. This year's canola crop is estimated by Lachstock Consulting at 5.8 million tons, and by ABARES at 5.5 million tons, which is significantly lower than the previous season's record 8.5 million tons. Against the background of a decrease in production, the export of canola in the 1st quarter of 2023/24 MR may decrease by 20% compared to the same period of 2022/23 MR.

According to the European Commission, currently prices for Australian canola are $495/t FOB (-2% for the month), Canadian – $504/t FOB (-6%), European rapeseed – $463/t FOB (-2% ).

In 2023/24 FY, EU countries imported 2.84 million tons of rapeseed out of the projected 5.1 million tons, which is 28% less than last year's rate (3.97 million tons). 64.5% of this volume or 1.83 million tons was supplied from Ukraine, 21.5% or 610 thousand tons from Australia, only 1.5% from Canada, although last year its share reached 30%.

February canola futures on the Paris MATIF fell 1.9% to €424.75/t or $461.2/t for the month under pressure from a significant supply volume, so shipments from Canada remain unprofitable.

March canola futures on the Winnipeg exchange fell 5.5% for the month to CAD 630/t or $466/t (-30% since early September).

The demand for oil and biodiesel is decreasing against the background of increasing sales of electric vehicles, so the demand for energy crops will also decrease in the near future. In 2023, global sales of electric and hybrid cars grew by 31% compared to 60% in 2022. According to Bloomberg, sales of such cars will increase by 21% to 16.7 million units in 2024, and 70% of them will be fully electric.