21 May 2024 19:13

Rapeseed harvest in Ukraine to be lower than forecast, prices to rise - analysts

MOSCOW. May 21 (Interfax) - Ukrainian rapeseed in the 2024-2025 agricultural year (for oilseeds in September-August) will rise significantly in price amid the local May frosts, rising exchange market prices, and competition for raw materials between exporters and processors, Ukrainian media reported, citing a report from the Pusk [Start] analytical cooperative, which was established as part the All-Ukraine Agrarian Council (VAR).

"There was a sharp increase in rapeseed prices on the exchange from 475 euros per tonne to 485 euros per tonne on May 20. If growth continues on the exchange, then prices could reach 500 euros per tonne in the next two weeks. Even if the exchange shows a decrease in prices, then the prices for Ukrainian rapeseed will likely exceed 500 euros per tonne in the long term. Local problems with May frosts will contribute to the growth. There is currently no official information to date, however, according to producers, there is damage to rapeseed crops in the Dnepropetrovsk, Kharkov, and Kirovograd regions, and it is up to 30%-40% at some farms," the analysts said.

The analysts said that the previously forecast gross harvest of rapeseed in Ukraine will not happen. It was possible to harvest 4.7 million tonnes in 2023, though the harvest this year will likely not exceed 4.1 million tonnes. A reduction in production will drive up prices.

They also forecast that competition between oilseed exporters and processors will intensify in the coming season.

"There are plans in Ukraine to process around 500,000-550,000 tonnes of rapeseed. Therefore, we can expect that there will be a 'struggle' between exporters and processors. Ukraine previously exported rapeseed quickly within two to three months, though the season this year was long and lasted until February-March. Therefore, one cannot expect a large supply of oilseeds from farmers in July-August, because only those who need 'fast' money will sell rapeseed during harvesting," the analysts believe.

Conditional prices for rapeseed currently total 420-425 euros per tonne on CPT Odessa terms. There is high demand for the new rapeseed crop, as both traders and processors are actively contracting the crop. Specifically, contracts for supplies to Germany are being concluded at prices of 460-465 euros per tonne on DAP terms, Pusk said.