The Ukrainian rapeseed market is reacting less and less to global price conditions due to the actual stoppage of deep-water ports as a result of shelling. Export flows are being reoriented toward the western borders, while the domestic market is under pressure from excess supply.

This is reported by the analytical department of the agricultural cooperative FUAC (First Ukrainian Agricultural Cooperative), established within the Ukrainian Agri Council (UAC).

According to FUAC analysts' estimates, rapeseed is the most profitable early crop; however, in the near future its price in Ukraine may continue to decline.

"Unfortunately, for the Ukrainian market, the growth of the Euronext exchange to the forecast 550–560 euros/t already means practically nothing. Whereas previously the CPT price moved in sync with Euronext, now the exchange may rise while the domestic market falls. This is due to the fact that rapeseed is effectively locked into the domestic market. This trend will continue further on," the analysts note.

According to the experts, as recently as the beginning of the week, some processors were buying large consignments of rapeseed with an oil content of 46% at UAH 24,000/t; however, at present conditional prices have already fallen to UAH 23,000–23,500/t. On the export front, demand at ports held at a level of around $580/t (at an oil content of 44%).

"Even after the price decline, rapeseed remains a profitable crop, so it makes sense to sell now, especially if hryvnia liquidity is needed. There is a risk that purchase prices will fall to UAH 21,000–22,000/t," FUAC believes.

At the same time, large agricultural companies are actively contracting export supplies at the western border. At the end of last week and the beginning of this one, contracts were already being concluded for September–October at a price of $575–585/t (44% oil content). However, in the experts' opinion, after covering the needs for these months, prices may begin to gradually decline on this front as well. Additional pressure on the market is also created by the intensification of domestic processing.

"It can be forecast that the bulk of Ukrainian rapeseed will be sent for export through the western borders. At the same time, processing plants have already largely covered their needs until October. Whereas previously enterprises planned to process 100–150 thousand tonnes of rapeseed in August, now the market is already naming benchmarks of 200–250 thousand tonnes, and some participants estimate possible volumes at even 300 thousand tonnes. Because of this, there is no sense for them to maintain high purchase prices," the analysts summed up.

In the experts' opinion, despite the fall in prices, rapeseed continues to provide producers with a profit, so the supply of the new harvest remains high. Only at the end of this week or the beginning of next may the pace of sales slow down, which will create the preconditions for a temporary stabilization of the market.