Rapeseed Prices in Europe Increase Due to Border Blockade by Polish Carriers

Rapeseed Prices in Europe Increase Due to Border Blockade by Polish Carriers

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Negotiations between representatives of Polish carriers and the Ukrainian authorities, which took place on November 13, have not yielded results yet. It seems that the strikers will block the border for a long time. This has already led to a disruption in export truckloads of rapeseed to the EU and an increase in domestic demand and rapeseed prices. In general, factories in the EU are provided with raw materials until the new year, but the stoppage of exports from Ukraine creates a shortage in the market, which European manufacturers take advantage of by raising prices, reports Graintrade

Situation in exchanges

World rapeseed prices are rising in line with soybean prices, whose January futures on the Chicago Stock Exchange rose 5.7% to $502.7/t (+6.4% for the month) in two weeks.

February rapeseed futures on the Paris MATIF rose 3.5% to €446/t or $485/t (+0.5% on the month) in November after falling 6% in October. The high exchange rate of the euro against the dollar makes the European market interesting for Australian and even Canadian canola.

In 2023/24, the EU imported only 1.6 million tons of rapeseed out of the projected 5.1 million tons, which is 36% lower than in the same period last year. Almost 61% of this volume was delivered from Ukraine.

January canola futures on the Winnipeg exchange rose 6% to CAD 714/t or €481/t in November (-1.8% for the month).

Intensification of Ukrainian rapeseed exports through Black Sea ports will reduce logistics costs in the near future and increase pressure on rapeseed prices in the EU.

In Ukraine, rapeseed prices for delivery to the ports of the Danube and the Black Sea remain at €332-367/t, given the cost of logistics in the range of €60-75/t. Therefore, in EU ports, Ukrainian rapeseed can cost $430-450/t or €410-420/t, while European farmers offer their products much more expensively.

Prices for Australian canola are currently $500/t FOB, and Canadian canola is $530-550/t FOB, leaving the potential for price increases and exports of Ukrainian canola to the EU. Ukraine can still export about 1.5-2 million tons of rapeseed, which will be enough for the EU, even in view of the sharp reduction of the harvest in Australia.

Refinitiv Commodities Research experts lowered the forecast for the canola crop in Australia in 2023/24 MY by 0.2 million t to 4.7 million t (8.3 million t in 2022/23 MY), so the export potential will decrease to 3.5-3 .7 million tons. According to Oil World, in FY 2022/23, Australia exported 5.8 million tons of canola.

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