Russian market of rapeseed in 2016/17 MY

Source

APK-Inform

12517

Over the last seasons, Russia observes decline of planted area, yield and production of rapeseed due to lower interest to its cultivation in comparison to other oilseeds. At the same time, output of rapeseed oil and meal is growing due to higher import of the feedstock.

 

Rapeseed crop: in short supply

The global rapeseed production is declining. According to Oil World, it will reach 8 years low 62.15 mln tonnes, against 64.01 mln tonnes in 2015/16 MY.

APK-Inform estimates the oilseed areas in Russia at 1 mln ha this season, against 1.02 mln ha year ago, rapeseed yield declined to 1.09 (1.12) t/ha.

Russia could export up to 50 thsd tonnes of rapeseed in 2016/17 MY (up 5.5% on year) due to lower global production. The country shipped more than 42.1 thsd tonnes of the oilseed (up 59%) during August-December. In accordance to WTO program, export duty on rapeseed in Russia declined to 6.5% but not less than 11.4 EUR/t since September 2015.

 

 

Trade activity during the first half of 2016/17 was rather moderate.

The harvesting campaign started in the Southern Federal District in late June. Preliminary bid prices totaled 18000-23000 RUR/t EXW (average oil content – 44-46%). However, start of field works did not influence significantly on trade activity. Further harvest process and increasing of rapeseed supply were limited due to adverse weather.

The oilseed harvest started in the Central FD in late July. The purchasing prices were higher and mainly reached 25000 RUR/t СРТ (oil content – 43%). Rains promoted price growth in the region.

In the Siberian FD, rapeseed entered the market in mid-August. The offered volumes did not exceed 60-150 tonnes, and the prices totaled 24000-25000 RUR/t СРТ (oil content – 48-50%).

The first lots of rapeseed were offered in early September in the Volga FD, the prices declined by 3000 RUR/t to 24000-25000 RUR/t СРТ.

 

 

However, the harvesting campaign and higher rapeseed supply in September-October did not lead to significant price decline. The bid prices reached minimal level in late September at totaled 21000 RUR/t CPT in the Volga FD and 24000 RUR/t СРТ in the Siberian FD.

Market operators informed about lower rapeseed quality due to high moisture content. Thus, the prices started to grow in November as buyers tried to attract higher supply of good quality oilseed.

In December-January, the supply of rapeseed has been declining as farmers were reserved sellers waiting for better prices.

 

Rapeseed oil

Despite lower rapeseed production, oil output can reach 365.8 thsd tonnes, against 364 thsd tonnes in 2015/16 MY, due to higher oilseed import that can reach 35 thsd tonnes in comparison to 3.9 thsd tonnes season ago.

APK-Inform forecast the growth of domestic consumption of rapeseed oil to 140 thsd tonnes (up 5 thsd tonnes in year). Main volumes will go for exports – 230 (224.4) thsd tonnes.

 

 

The first half of 2016/17 MY faced low trade activity and multidirectional price trends.

In July, sellers from the European part had been decreasing the offer prices due to lack of interest from buyers. Low demand was seen until late September, while the prices were stable.

The maximum prices reached 60000 RUR/t EXW in the Central FD, 52000 RUR/t EXW in the Siberian FD, 55000 RUR/t EXW in the Volga FD in November, due to limited supply. By late January, sellers declined the maximum prices to 58000 RUR/t EXW (Central FD) and 51000 RUR/t EXW (Siberian FD) to attract buyers.

 

 

Rapeseed cake/meal

APK-Inform forecasts Russia to increase rapeseed cake/meal production to 524.3 thsd tonnes (+0.38%) in 2016/17 MY.

At the same time, the exports of the product could decline to 175 thsd tonnes, against 180 thsd tonnes year ago due to higher demand from livestock complexes and feedstuff producers. The domestic consumption of rapeseed cake/meal could reach 350 thsd tonnes in 2016/17 MY (+1.4%).

 

 

Selling prices for rapeseed cake/meal declined in the beginning of the season due to higher supply of new crop product. At the same time, low demand caused further downward trend in October.

The situation changed in November. The offer prices increased due to high rapeseed price and ruble devaluation. By the end of the month, the selling prices totaled 18000-20000 RUR/t EXW in the Central FD, 18000-19000 RUR/t EXW in the Volga FD, and 17000-19000 RUR/t EXW in the Siberian FD.

Despite upward trend, trade activity was high and prevailed up to late December.

 

 

Further prospects

Market operators suppose that rapeseed prices can grow in short-term due to lack of supply from farmers. Under high competition, the bid prices can exceed 30000 RUR/t EXW in April-May that can force oilseed processors to postpone their activity.

The market of rapeseed products can face upward price trend too due to limited supply as feedstock supply will go down.

At the same time, many farmers increased the planted areas under winter rapeseed for 2017 crop, thus the current prospects for next year production are optimistic.

 

Anna Bulatova, APK-Inform Agency

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