A deficit market for new crop rapeseed is emerging in Ukraine. Ukrainian traders and processors are stepping up purchases amid limited supply and stable demand from Europe.

This is reported by the analytical department of the First Ukrainian Agricultural Cooperative (FUAC), created within the UAC.

The current situation on the rapeseed market is tense, despite the holiday lull on European exchanges. Due to the weekend on Euronext last week, trading was not active and prices remained in a narrow range. However, analysts are already seeing signs of potential growth.

“Prices for new crop rapeseed are currently fluctuating within the local level of 475-480 EUR /t. If this price threshold is overcome, the prices may rise further to 500-510 EUR/t,” the analysts said.

The situation on the Ukrainian market is more dynamic. The notional prices for July-August delivery to ports are in the range of 510-515 USD/t, excluding VAT. Processors are ready to pay more - at the level of 535-545 USD/t including VAT, sometimes even offers of 550-560 USD/t are heard.

“Despite limited activity on European exchanges, the Ukrainian market is showing price growth. The main factor is the imbalance between the volumes of export contracts already concluded and actual purchases: 1.7-1.8 million tons of products were sold, while about 1.3 million tons were purchased. Thus, the market for the new harvest remains in short supply, and traders need to cover at least 100,000-500,000 tons more,” the FUAC commented.

This deficit keeps prices high and is likely to contribute to their further growth. Weather risks, such as frost, also play a role, as farmers are in no hurry to enter into forward contracts.

The predicted seasonal price for July-September is 540-560 USD/t on a CPT-port basis.

“There will be a few forward contracts - farmers are afraid of risks. The main trade is likely to be on the spot,” the experts concluded.