Rapeseed harvest lag fuels price volatility, Ukraine export delays
A delay to the harvest of rapeseeds in Ukraine, caused by the late start of the campaign after heavy rain through the early...
A delay to the harvest of rapeseeds in Ukraine, caused by the late start of the campaign after heavy rain through the early planting period, and a major export line up are causing price volatility in the country’s internal market, trade sources have told Agricensus Friday.
The shift in the timing of the harvest campaign has led to unstable oilseed supply which has been exacerbated by slow farmer selling amid a backdrop of price volatility in prices on the Euronext futures contract.
“The rains that were observed in a number of regions of Ukraine did not allow farmers to go to the fields, which shifted the pace of the harvesting campaign by an average of two weeks,” a source at a crusher told Agricensus.
As of July 29, Ukrainian farmers had completed the harvest on 568,500 ha, 56.5% of the expected area, and gathered 1.48 million mt of rapeseed.
That is a 33 point lag behind the result for the same date last year and has fueled instability in the supply of the oilseed at fluctuations in the price, at a time when the number of vessels waiting in the line-up to load rapeseed is increasing.
According to line-up data for Ukrainian ports, almost 95,000 mt of rapeseeds were exported in July, while 303,750 mt are already nominated for export in August.
“The need to load ships with rapeseed is driving prices up,” said a second market source.
“The market is unstable. The shift in harvesting dates has led to the simultaneous harvesting of wheat and rapeseed. Farmers are seeing an unstable Matif and are holding volumes in anticipation of price increases, leading to unstable supply and price fluctuations,” a trader said, referring to the old name of the Euronext exchange.
The increase in prices in ports since the beginning of the week amounted to somewhere between UAH1000-1300/mt ($37-$48/mt) to UAH19,500/mt CPT ($727/mt) for the purchasing price paid in the national currency.
The price paid in dollars also increased by around $20-30/mt to $625-630/mt CPT, while concerns over the health of supply in other producing regions is also raising fears.
“The downgraded forecast of the Canadian canola crop has an impact on the market, and many are manipulating this fact, pushing the prices higher,” added the trader.
The Ukrainian export potential of rapeseeds this season, according to USDA expectations, will increase to 2.7 million mt, which is 10.7% higher than the 2020/21 season, but below the record of 3 million mt in the 2019/20 season.
The 2021/22 marketing year output is expected to increase 11.3% year-on-year to 3.1 million mt.