(Agrimoney) – Rapeseed exports from Ukraine will fall to a nine-year low next season – potentially boding well for growers in Australia, the only other major exporter to the key European Union market.
Ukraine will export 1.05m tonnes of rapeseed in 2016-17, a drop of 25% year on year, the US Department of Agriculture’s Kiev bureau said, in its first forecasts for next season.
The drop, which reflects the dent to sowings from poor weather and the lure to farmers of other crops, leaves Ukraine’s shipments forecast to hit their lowest since 2007-08.
Shipments to the neighbouring European Union – the world’s top rapeseed consumer, as well as the biggest grower of the oilseed – will drop by 25% to 950,000 tonnes next season.
“This assessment is based on a combination of expected decrease in [Ukraine’s] production volume together with a gradual increase of domestic crush”, the bureau said in a report.
More from Australia?
The briefing underlined that the EU “remains the largest customer for Ukraine’s rapeseed, buying almost 1.3m tonnes in 2014-15”, in particular for production of biodiesel, which is made from vegetable oils such as rapeseed oil.
Ukraine’s rapeseed crop “is extensively used for biofuel production, especially on the EU market”, the bureau said.
With the EU expected by many analysts to produce about 21-21.5m tonnes of rapeseed itself this year, well below consumption which averages some 25m tonnes, the drop in supplies from Ukraine implies that the bloc will need to source extra import from alternative sources.
A separate USDA report last year noted that “Ukraine and Australia remain the only major suppliers for Europe”.
Canada, the top exporter of rapeseed variant canola, “produces genetically-engineered rapeseed” which falls foul of EU import restrictions.
Rapeseed vs soybeans
The USDA bureau said that its Ukraine rapeseed export forecast reflected an expectation of a 1.47m-tonne harvest, down 280,000 tonnes year on year, and also a nine-year low, a decline reflecting in part poor weather which depressed sowings, and hurt much of what was planted.
“Given that autumn weather conditions featured low levels of soil moisture while winter conditions failed to produce sufficient levels of snow cover in some regions, expected winterkill could reach 20-30% depending on spring weather conditions.”
However, even that production estimate is higher than that of many other commentators, with the International Grains Council forecasting a 1.1m-tonne crop, while Ukraine-based broker Veles-Agro has predicted a 1m-tonne harvest.
The USDA bureau also noted that rapeseed “continues to lose favour [among] local farmers as its export as well as domestic price is still strongly tied to decreasing global oil prices”, because of its use largely in making biodiesel.
By contrast farmers are expected to sow a record soybean area this year, of 2.3m hectares, encouraged by returns which have “significantly surpassed” those for rapeseed for the past three years.
