Purchase prices for rapeseed in Ukraine remain under the pressure of low demand

The decrease in quotes for rape and canola on world exchanges increases the pressure on the export prices of Ukrainian rape, which, against the background of low demand from buyers, may soon turn prices down.

In Canada, the weather is favoring the formation of the canola crop, and if these conditions continue for a few more weeks, the market will see a significant increase in supply, especially given the drop in demand for oilseeds from China.

According to experts at Exceed Grain (Winnipeg), many Canadian farmers refused to sell canola at $900/t in anticipation of a better price. However, if prices fall further, it may happen that funds and farmers will try to sell their rapeseed at the same time, which will collapse the quotation.

• November canola futures fell 4.9% for the week to CAD 815/t or $630.5/t, losing 5% for the month. Whereas a year ago they traded at 937.5 CAD/t or $744/t, and in April 2022 they reached a record 1,100 CAD/t.
• November rapeseed futures on the Paris MATIF dropped 7.3% for the week to €615/t or $626/t.

Due to active deliveries from Australia and the start of export of the new crop from Ukraine, from July 1 to August 14, the EU imported 718,600 rapeseeds, which is 65% higher than last year's figure.

International traders are very slowly resuming purchasing activities in Ukraine, and rape remains the only crop they are interested in.

Loading and shipping of ships from the Black Sea ports is at a slow pace, so traders are in no hurry to resume purchases at the terminals. Purchase prices for rape with delivery to the port of Odesa or Chornomorsk remain at the level of 15,500-16,000 hryvnias/t, while foreign exchange prices have decreased to $430/t against the background of a significant excess of supply over demand, but traders refrain from buying for currency.

At the elevators of Ukraine, the purchase prices for rapeseed rose to UAH 14,000-15,000/t during the week, and in the western regions there is a demand for rapeseed loaded into big bags for delivery to the EU. Against the backdrop of a sharp increase in supply, demand prices for DAP deliveries to Poland, Romania, and Bulgaria fell by $20-30/t to $520-550/t during the week, but buyers are only interested in deliveries in September and October.

An increase in the supply of rapeseed on the world market will increase the pressure on prices, which will lead to a decrease in prices in Ukraine. And only the stabilization of the operation of port terminals and the reduction of freight costs can keep the demand prices in the ports of Odesa and Chornomorsk at the level of $450-470/t SRT.