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W3: Weekly Canola & Rapeseed Update

Updated Jan 25, 2023
Tridge's global market analysts and country representatives take a deep dive into what happened during W3 in the global canola and rapeseed landscape. In summary, the world markets for grain and oilseeds were generally in decline, with rapeseed falling sharply, by 5.9% WoW in W3. In Poland, the price of rapeseed significantly decreased with rapeseed being sold for USD 542.47/MT. Turkey has reduced customs duties on canola imports to 0% until May 31, 2023. As for Russia, rapeseed crops are growing in the Kuban region with amazing consistency, and the rapeseed area has doubled for 2023. Lastly, in the North Caucasus Federal District in Russia, the rapeseed gross harvest has grown five times to 467,400MT.


Bearish Week in Global Grain and Oilseed Futures Markets, With Rapeseed Falling Almost 6%

The world markets for grain and oilseeds were generally in decline, with rapeseed falling sharply, by 5.9% WoW, and oats being the only commodity to show a gain, of 1.6% WoW in W3. Rapeseed prices should be related to Germany's announcements to cut its fuel consumption as well as the significant imports coming from Australia and Canada. Rapeseed prices in Europe fell 5.9% in W3, from USD 616.44/MT to USD 580.50/MT.


Record-Breaking Stocks of Cereals and Rapeseed in Poland: How Will This Affect Prices

In W3, the price of rapeseed and cereals significantly lowered. Rapeseed was sold in Poland for USD 542.47/MT. Less than two weeks have passed since this. The same situation was observed in the stock exchanges, as rapeseed prices on the MATIF exchange are at their lowest levels since August 2021.


Taxes on Grains, Oilseeds and Crude Oils Have Been Reduced to Zero in Turkey

The Turkish government reduced customs duties on imports to 0% for wheat, corn, and barley until April 30, 2023, and until May 31, 2023, for safflower, sunflower (crude oil, seeds), and canola. Before 2023, Turkey applied a tax of USD 250/MT to the imports of crude sunflower oil and a 5% tax on sunflower seeds.

Although the zeroing of customs duties could positively impact oil prices, it is likely to negatively affect the livestock sector. While oil prices are expected to decrease, feed prices are predicted to rise as fewer oilseed byproducts are likely to be available since crude oil imports are more advantageous now. Thus, it is expected that a 10-15% discount will be reflected in the market prices of oils with zero customs duty on FEB.


In Russia, Kuban Has Increased Its Rapeseed Production

According to data from the Ministry of Agriculture, rapeseed crops are growing in the Kuban region with amazing consistency, and over the past three years, the rapeseed area has doubled. The pattern has continued in 2023, with the area planted with winter rapeseed rising to 87,500MT hectares for the 2023 harvest, an increase of more than 5,000 hectares. Additionally, rapeseed oil exports, as well as production, are both rising. The Kuban Ministry of Agriculture reports that in 2022, shipments of rapeseed oil to nations in Asia, Eastern Europe, and Western Europe have tripled. A record 285,000MT of winter rapeseed were harvested in Kuban during the 2022 growing season.

Gross Harvest of Rapeseed in the North Caucasus Increased by 5 Times in 2022

One of Russia's most important agricultural regions is the North Caucasus. According to all-Russian data, the district annually produces around 9% of grain and leguminous crops, 10% of rice, more than 4% of sugar beets, and about 4% of oilseeds. In the North Caucasus Federal District's subjects, cropland has more than tripled since 2022, and the crop's gross harvest has grown five times, to 467,400MT.

The Ministry of Agriculture of the Russian Federation Is Considering the Possibility of Increasing the Export Duty on Rapeseed

The Ministry of Agriculture is now debating whether to raise the export tax on rapeseed. The subcommittee on customs-tariff and non-tariff regulation will determine the duty's amount, according to the ministry. As of right now and through February 28, 2023, there is a ban on the export of rapeseed in Russia. It does not apply to the Zabaikalsk checkpoint, deliveries are subject to a base rate of 6.5% but not less than USD 12.41/MT. According to the data, the gross harvest of rapeseed in 2022 increased by 63.3% YoY to 4.56MMT.


Ukraine Has Shipped 2.3MMT of Agricultural Products Since the Beginning of the New Year

Shipments of rapeseed actually fell by 4 times, mostly as a result of the crop's growing season coming to an end. As a result, only 44,000MT were shipped in the first half of January. For the first 15 days of January, the following summarises the volume of agricultural products that have already crossed the Ukrainian border in percentage terms: Corn makes up 48.29% of the crop, followed by wheat (18.76%), beans (8.56%), meal (8.54%), sunflower oil (6.36%), sunflower seeds (4%), barley (3.11%), rapeseed (1.89%), and soybean oil (0.47%).


Argentinian Rains to Bear on the Market

The weekly pressure on Paris rapeseed futures for May/23 continued yesterday as it closed at USD 587.97/MT, down USD 3.54/MT from the level on January 18, on Wednesday. The pressure on the Canadian canola market was caused by the reduction in US soybean oil prices, which dampened crushers' demand for oilseeds. Further to that, much-improved weather in Argentina weighed on oilseeds markets.

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