23 May 2024 11:58

Rapeseed processing in Ukraine to drop 20%-23% in 2024-2025 MY - analysts

MOSCOW. May 23 (Interfax) - Rapeseed processing by Ukraine may decline 20%-23% to around 750,000-800,000 tonnes in the 2024-2025 marketing year (MY) year-on-year, Ukrainian media said, citing the APK-Inform information and analytical agency.

The decrease in rapeseed processing compared to the previous year may be due to a decline in Ukraine's rapeseed harvest in 2024 and a growth of competition between factories and exporters, given the strong demand for Ukrainian rapeseed from European companies, APK-Inform said.

"However, in general, rapeseed processing in Ukraine will remain at quite a high level for the industry. In April, market participants reported a significant rise in demand for the new harvest of this oilseed from domestic processing enterprises. There are several reasons for that. The main ones are the rather good margins of rapeseed processing and high demand for rapeseed oil," the analysts said.

Due to an anticipated shortage of sunflower in summer, rapeseed becomes a good alternative, as last year's practice showed, they said.

APK-Inform also said that the rapeseed-processing season might start earlier than usual, given the earlier flowering and ripening of the winter crop, as well as the expected earlier start of harvesting. The processing of rapeseed in the country may increase significantly, but at the end of the agricultural year, it may still not achieve a record level, as in the current season, due to expected tougher competition for the crop amid a decrease in supply.

There were nearly 950,000 tonnes of rapeseed processed in Ukraine over the 10 months of the 2023-2024 season, a record for the industry.

As reported, as per an assessment from the Pusk analytical cooperative created as part of the All-Ukrainian Agrarian Council, the gross harvest of rapeseed in Ukraine will be short of the previous forecast. If it was possible to collect 4.7 million tonnes in 2023, then this year the harvest will not exceed 4.1 million tonnes. The reduced production will push prices up.

Pusk analysts also expect that competition between oilseed exporters and processors will intensify in the coming season. "In Ukraine it is planned to process about 500,000-550,000 tonnes of rapeseed. Therefore, we can expect a "struggle" between exporters and processors. If previously, Ukraine quickly exported rapeseed in 2-3 months, then this year the season was long and lasted until February-March. Therefore, one should not expect a large supply of oilseeds [crops] from farmers in July-August, because only those who need "quick" money will sell rapeseed during the harvest," they said.