Rapeseed prices are gradually recovering, but may soon decline again

February rapeseed futures in Paris, after falling before Christmas to a yearly low of €450/t, are gradually recovering and have already risen by 3.7% to €466.75/t or $545/t amid delays in deliveries from Ukraine due to shelling of ports and restraint in sales by European farmers who expect prices to rise, as was the case in January-February last year, when quotes rose by 8-9%. But now we need to take into account a sharp increase in canola supply from Canada and Australia, as well as low oil prices, so May futures are trading €6/t cheaper, and August futures for the new crop are €20/t cheaper than February.

January canola futures have risen 2.9% year-to-date to CAD 607/t or $438/t (-1.2% month-on-month), and March futures have risen 3.1% to CAD 622/t in hopes of a possible resumption of supplies to China.

The price difference between Canadian canola and rapeseed in Paris remains quite high (about $110/t), which will contribute to increasing supplies to Europe.

In Ukraine, export purchase prices for rapeseed have increased by $5-10/t since the new year to $530-535/t or UAH 23,000-24,000/t with delivery to Black Sea ports, as traders need to form export batches. But they emphasize that they will most likely not make new sales until stable operation of the ports is restored, which is hindered by the lack of electricity at the terminals and constant shelling.

The shelling of Ukrainian ports and oil extraction plants has sharply reduced the purchase prices for rapeseed to UAH 22,500-23,700/t, as some large plants have stopped purchases, and others have no export demand for oil and meal.

Ukrainian farmers should increase their rapeseed sales in January, because in February and March, the supply of soybeans from South America and rapeseed from European farmers will increase, which will reduce prices for oilseeds in the EU.

Tags: Ukraine, prices, rapeseed