Ukrainian oilseed crushing plants have largely stopped processing rapeseed and are actively switching to the new sunflower crop. One of the main reasons is the difference in raw material prices: sunflower seed is currently offered at approximately UAH 17,500–19,000/t delivered to plants, compared with UAH 19,000–20,000/t for rapeseed. Under these conditions, sunflower crushing offers more attractive economics for processors.
Lower crushing activity is reducing domestic demand for rapeseed. At the same time, the export market remains active, with rapeseed bids at around $500–520/t delivered to Danube ports and western border terminals. Ukraine exported 428,700 tonnes of rapeseed in September, compared with 292,600 tonnes in August. Rapeseed oil exports during the month also reached approximately 154,500 tonnes.
Global market developments are adding further pressure to Ukrainian prices. November rapeseed futures in Paris declined by approximately 3.5% over the week to €537.5/t, while Winnipeg canola fell by 2% to CAD 819/t. Ukrainian rapeseed delivered by truck to Constanța lost $10–15/t over the week, falling to $575–580/t, while prices delivered to processing plants in the Czech Republic and Germany declined by around €10/t to €510–535/t.
The situation is further complicated by increasing pressure on land logistics. Rising supplies of sunflower seed, soybeans and corn are simultaneously increasing demand for road and rail transportation and pushing traders' logistics costs higher. Under these conditions, domestic rapeseed prices could remain under pressure through December–January, with global quotations, export demand and logistics costs remaining the key market factors.
Original source: UkrAgroConsult