W19: Canola & Rapeseed Update

In W19 in the canola landscape, on May 8, the price of rapeseed for the August contract on the Paris Stock Exchange dropped 4.3% to USD 465.16/MT. The rapeseed price increased over the following two days but decreased by USD 11.66/MT to USD 460.84/MT on May 11, falling to the lowest price in 27 months. Canola oils are suffering due to the decline in oil prices and Malaysian palm oil discounts. Canola prices for Canada declined on the Winnipeg Stock Exchange by 0.2% on May 8 to USD 582.06/MT, a decrease of 32.1% YoY, and by 1.4% on May 11 to USD 572.01/MT, a decrease of 33.7% YoY. Farmers in Moldova threatened the government with mass protests if the authorities do not impose a temporary ban on the import of Ukrainian grain, corn, sunflower, and rapeseed within a week. On May 6, the Moldovan Ministry of Agriculture announced the possibility of introducing a ban on grain imports from Ukraine due to the protest threats. In response, Ukraine plans to ban all imports from Moldova.

The EU might extend the regulation prohibiting the free trade in wheat, corn, rapeseed, and sunflower seeds from Ukraine in Poland, Bulgaria, Hungary, Romania, and Slovakia, which is now banned, from May 2 to June 5 to alleviate logistical bottlenecks. These grains from Ukraine can still be transported and transit through these five countries. Furthermore, the European Commission (EC) has received another letter from the ministers of agriculture of Bulgaria, Poland, Romania, Slovakia, and Hungary, emphasizing that allowing the enforcement of pre-concluded contracts can lead to many abuses and that the import ban introduced will only prove to be illusory. Additionally, they suggest that imports of other delicate agro-food products from Ukraine be permanently monitored and, if necessary, that fast implementation of preventive measures be made available. Resultantly, the deal negotiated by the EC and the five member states has drawn "serious concern" from 12 other EU agriculture ministers.

Due to increased planting area, the EU's oilseed production is projected to increase by 4% to 33.13MMT for the marketing year 2023/24. Rapeseed, the main crop in the EU, is expected to yield 19.3MMT, a decrease of less than 1% from the previous season. Despite a 9% decrease in the area that will be sown, Ukraine's rapeseed output is estimated to reach 3.5–3.6MMT in 2023. The prediction for Ukrainian rapeseed exports in 2023/24 is down 3% YoY ranging between 3.3-3.4MMT, yet new risks from the EU restriction could complicate the season. As of March 31, Canada's rapeseed stocks were 5.95MMT, up from 5.16MMT in 2022, but well below the five-year average of 8.76MMT. In the first six months of the current season, Australia exported a record 3.4MMT of canola, the majority of which went to EU nations. Due to the considerable rise in the amount of oil processed in the EU as a result, rapeseed prices decreased to USD 867.47/MT at the end of March from USD 2,168.67/MT in June 2022.