For many years now, rapeseed has been one of the most profitable crops in the Ukrainian market. This encourages growers to increase its production.
Despite a soil moisture shortage in the fall of 2019, the total rape planted area for 2020 expanded to 1370 Th ha. The mild winter reduced the risk of winterkill of winter crops (1300 Th ha). This confirmed UkrAgroConsult’s optimistic scenario as for rapeseed crop.
Unfortunately, the large crop in 2020 will be unable to secure high revenues for rapeseed growers, though it is high rapeseed margin that pushed them to expand the rape share in 2019 fall plantings.
Rapeseed demand faces the following key risks: intensifying uncertainty in domestic pricing as the ban on rapeseed export VAT refund to non-growers has not been lifted as well as the crude oil price decline and a slump in prices of rapeseed-based biofuel produced in the EU.
Rapeseed prices will considerably depend on demand from the EU, which, in turn, will be determined by prices in the “oil-biodiesel-rapeseed” chain.
Current rapeseed prices dropped from USD 465/MT in January 2020 (the highest since July 2014) to an all-time low of USD 378/MT.
We will keep you informed on the further scenario.