Poland wants to build new rapeseed processing plants, although it already has excess capacity, and Ukraine is reducing raw material exports

European processors may lose Ukraine as a key supplier of rapeseed, as its annual deficit in the EU is 5-6 million tons. This was reported by Myroslav Marcinyak, an agricultural market analyst at InfoGrain.

“European processors, on the one hand, may lose a key supplier of rapeseed, which they need, as the annual deficit in the EU is 5-6 million tons. On the other hand, they will gain competition in the form of Ukrainian rapeseed oil. At the same time, farmers may also suffer, as some processing capacities in the EU may stop,” he wrote on LinkedIn.

Marcinyak recalled that “Copa-Cogeca has finally drawn attention to the fact that the import of rapeseed oil from Ukraine poses a threat to EU farmers.” The organization calls on Ukraine to abolish the 10% duty on the export of rapeseed, sunflower and soybeans, as the oil produced from these raw materials is allegedly flooding the European market.

He noted that Ukrainian producers understand that the main profit is formed in processing, and have been actively developing this direction for several years. Even before the war, 95% of Ukrainian rapeseed was exported. Up to 3.5 million tons of seeds were supplied to the EU every year, which covered the chronic deficit.

In the current season, Ukraine has already exported 314 thousand tons of rapeseed oil to the EU (equivalent to 750 thousand tons of rapeseed) and only 1.3 million tons of rapeseed. According to the European Commission, about 97 thousand tons of rapeseed oil (mainly from Ukraine) arrived in Poland.

The new investments mean that in the future Ukraine can minimize seed exports, focusing on the sale of rapeseed oil and meal, a significant part of which will enter the EU market, believes Marcinyak.

He added that the former president of Orlen (a large Polish oil and gas company that processes rapeseed into biofuel), who initiated the construction of a new oil extraction plant in Kętrzyn with the capacity to process an additional 400,000 tons of rapeseed per year, believes that the country needs 5-6 more such facilities.

Already today, Poland’s processing capacity reaches 4 million tons with rapeseed production at the level of 3.5 million tons, while the potential for expanding the crop’s sown area is limited, Marciniak added.

Tags: Poland, rapeseed