Should Bulgaria restrict rapeseed imports from Ukraine?

Bulgarian gross 2022 rapeseed harvest (-22% compared to 2021).

Rapeseed area increased by 4%.

Lower yield (-22% y/y)

Lower production promoted decline in rapeseed and rapeseed oil exports(July 2022-Jan 2023):

• Rapeseed exports (-23% compared to July-Jan of 2021/22 season);
• Domestic crushing (-9%);
• The fifth season at row almost 100% exported to the EU countries, with small volumes shipped to Korea and Japan;
• Rapeseed oil shipments declined (-23%),
• Key rapeseed oil destinations: Romania and Poland

Rapeseed imports increase (July 2022-Jan 2023):

• Rapeseed imports (+14% compared to 2021/22);
• Key rapeseed suppliers: Ukraine and Belgium (was not a supplier last season).

Bulgaria banned Ukrainian rapeseed imports from April 24 until June 30. Most likely, the imports stop will not influence sufficiently the rapeseed sector of this country in the 2022/23 season.

Factors decreasing the ban aftereffect:

– rapeseed market traditionally activity slows down in the second half of a season (Jan-June);

– harvest decline in 2022 was offset by increasing rapeseed imports;

– not only Ukraine but also Belgium expanded the rapeseed exports to Bulgaria;

– The EU markets’ factors were decisive for rapeseed prices decline in Bulgaria  – the gap between European prices in July-August 2022 (USD728 per mt) and by April 27, 2023 (USD499) was at USD229 per mt.

The next season of 2023/24, forecast 

Bulgarian rapeseed harvest in 2023 is estimated at 382 K mt (+25% compared to 2022) due to the following:

• Rapeseed planted area is at the 2022 level;
• Friendly winter weather;
• Soil moisture content is sufficient due to rains in spring months;
• Higher rapeseed yield.

Scenarios of Ukrainian rapeseed exports, 2023/24

Imports restrictions for Ukraine grain and oilseeds imports still are key driver of the oilseeds markets.  Now, Eastern European countries propose to extend the restrictions until Dec.31, 2023. However, this seems more reasonable in the context of higher rapeseed crop expectations compared to 2022;

– imports ban prolongation until Dec 31, 2023 creates new unknowns in Ukrainian domestic market making forward contracts with rapeseed producer not possible excluding  the likeliness and trustworthiness for any working plans needed for at least 2-3 months.

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