Rapeseed is one of the main oilseed crops for production of vegetable oils in Belarus, due to very high yield figures among oilseed crops in the current weather and climatic conditions.
However, despite the fact that the reporting crop is strategically important because the produced rapeseed oil is a good alternative to imported sunflower oil, there is no any clear trend of increasing of the general harvest of rapeseed in Belarus.
Dynamics of rapeseed production
For more than 10 years, rapeseed is the major oilseed crop in Belarus. Due to the current agro-climatic conditions, the oilseed shows the highest yield figures among all other oilseed crops in the country.
According to market operators, the Belarusian market always faced a deficit of vegetable oils and protein products. Rapeseed is the most adapted oilseed crop to the soil and climatic conditions of the country, and in some way compensates the shortage of other oilseed products. Thus, production of rapeseed oil for food purposes, and rapeseed meal - for feed ones, is the main focus of rapeseed processing in Belarus.
At the same time, the share of rapeseed areas in the structure of the general planted areas is less than 10%, and in recent years the planted areas under the oilseed did not grow.
In such terms, production of rapeseed in Belarus does not also have any clear trend for increasing, and despite its significant importance, the industry demonstrates a decline trend during three recent years.
Such situation mainly developed due to unfavorable weather conditions during the wintering period of winter rapeseed. According to market participants, during several recent years the oilseed planted areas in the eastern and central parts of the country are the most subjected to lodging, which has a significant impact on the harvested volumes of rapeseed. Also, rising of prices for fertilizers, crop protection products, fuels and lubricants adversely affects the quality of the planting campaign and rapeseed yield figures.
In the season-2016/17, agrarians started harvesting rapeseed in somewhat earlier terms than last season. Despite the fact that the planted areas exceeded the previous year figures by almost 22%, the harvested areas totaled 174.5 thsd ha only according to the Ministry of Agriculture of Belarus, down 28% compared with the last season results. Grodno oblast demonstrated the highest yield of rapeseed – 2.14 t/ha, and Mogilev oblast showed the lowest yield – 1.39 t/ha.
According to preliminary figures, in 2016 the general harvest of rapeseed became the minimum one for 9 recent years, and totaled 270.4 thsd tonnes in clean weight (down 29% compared with 2015/16 MY).
It is worth noting that Belarus consumes all produced rapeseed volumes within the country, and mainly processes the oilseed volumes. Belarus does not export rapeseed. Thus, oilseed processors are the main buyers of rapeseed on the domestic market.
According to market participants, selling of oilseed raw materials takes place in the first few months after the harvesting campaign, due to relatively small stocks of the oilseed. Also, absence of the required storage capacities is one of the reasons for many agrarians, which makes them to sell the oilseed immediately after harvesting works.
Rapeseed processing
As noted above, due to the climatic features the industry of rapeseed processing in Belarus received a strategically important position, because rapeseed oil is a good alternative to sunflower oil, which is mainly imported from neighboring countries (Ukraine, Russia), or Belarus imports just sunflower seed for further processing. In addition, Belarus also uses rapeseed oil for production of margarine, mayonnaise and other food products.
In 2015, there were more than 50 oil-producing plants in Belarus, with the general production capacities of more than 1 mln tonnes per year.
JSC Vitebsk oil extraction plant, OJSC Raps, CJSC Grodnobioproduct, JSC Bobruisk factory of vegetable oils and others are among the major oilseed processing plants.
The issue of loading of the processing capacities is one of the topical ones in the fat-and-oil industry in Belarus. Thus, the produced volumes of rapeseed in the country allow loading only some share of the processing capacities, so some plants have to stand idle or purchase the oilseed raw materials in neighboring countries.
Belarus manly imports rapeseed from Russia and Ukraine, due to their territorial location. At the same time, the pricing environment is the dominant factor.
In the current season, the offer prices for Ukrainian and Russian rapeseed are higher in comparison with Kazakh rapeseed. For example, in October the bid prices for rapeseed of Ukrainian companies reached 440-450 USD/t CPT, Russian plants (Central Federal District) - 405 USD/t CPT, but the offer prices of Kazakh rapeseed at the border with Belarus reached 390 USD/t. Thus, since the beginning of the season-2016/17 rapeseed import trading is quite low.
Also, Belarusian processors noted the availability of cheaper raw materials on the domestic market – in October the oilseed purchasing prices reached 360 USD/t CPT (excluding VAT) and 385 USD/t CPT (with VAT).
Rapeseed oil and meal (cake)
Taking into account the absence of clear dynamics of increasing of rapeseed oil production volumes during several recent years, as well as the imbalance of production and consumption of vegetable oils in the country, in 2012 the Council of Ministers of the Republic of Belarus limited the exports of the product in order to prevent its critical shortage on the domestic market.
So, Belarus exports rapeseed oil outside the common customs territory of the Eurasian Economic Union by one-shot licenses issued by the Ministry of Commerce in coordination with the Belarusian state food industry concern Belgospishcheprom. The organization undertakes to export rapeseed oil from Belarus, under the terms of provision of the minimum oil supply volumes for the domestic market at the volume not less than the agreement protocol specifies.
Generally, Belarus exports rapeseed oil to the EU countries. According to the National Statistics Committee of Belarus, the following countries were the main buyers of rapeseed oil in 2015: Lithuania - 80.1 thsd tonnes (86.9 thsd tonnes in 2014), and Norway - 24.1 thsd tonnes (45 thsd tonnes in 2014).
Also, Belarus uses rapeseed oil for biofuel production. Despite the existing state program, Belarus failed to bring the production volumes to the industrial purposes.
The main share of produced rapeseed meal (cake) is used in forage production, due to the fact that during several recent years, Belarus continues active increasing the production of livestock and poultry products.
The popularity of rapeseed meal and cake in cattle feeding increased in terms of high costs for imported protein products, because the country imports rather significant volumes of mixed feed and oilseed meals from neighboring countries.
Also, Belarus exports rapeseed meal (cake), but the exported volumes usually do not exceed 44-46 thsd tonnes. According to the National Statistics Committee of Belarus, in 2015 the following countries were the leaders of Belarusian rapeseed meal imports: Lithuania - 35.1 thsd tonnes (34.2 thsd tonnes in 2014), and Latvia - 9.4 thsd tonnes (11.4 thsd tonnes).
Forecasts and prospects
In the short term outlook, market participants expect for a seasonal decline of the number of offers of Belarusian rapeseed. Due to reduction of the raw material stocks, in the second half of the season the country will start importing the oilseed. As a result, the bullish price movements will continue developing in the market segment.
Also, it is worth noting that due to low harvest volumes of rapeseed in Belarus in 2016/17 MY, market operators plan to increase the import volumes of oilseed oils and meals. Due to the spread of African swine fever virus in Ukraine, Belarus banned the supplies from most of the oblasts which produce the products, and have the problems with the virus. Thus, the Belarusian companies are forced to look for new suppliers.
According to the Ministry of Agriculture of Belarus, the planted areas under winter rapeseed increased to 360 thsd ha, which is higher compared with the corresponding figures in 2014 and 2015, and will possibly increase the harvest volumes in 2017.
Svetlana Kirichok (Gnoevets), APK-Inform Agency
