Ukraine may lose its position as the largest exporter of rapeseed to the EU in the 2021-22 marketing year, following a sharp drop in the rapeseed planted area and high production risks.
About 880,000 hectares (ha) had been sowed with rapeseed for next year's harvest in Ukraine by 23 November, which amounts to only 87pc of the originally forecasted area and is down by 27pc on the year, government data show.
Ukrainian farmers have significantly reduced their rapeseed planted area after a sharp drop in oilseed production this marketing season, to just 2.55mn t, following the lowest yields for six years owing to unfavourable weather conditions. Southern and central regions of Ukraine, the largest rapeseed producing regions, were severely affected by water deficit last year, which led to the loss of 80,000 ha of planted rapeseed acreage.
After the large crop losses last winter, which led to huge financial loses and even some bankruptcies, producers were concerned that a similar situation could arise this year, especially given that rapeseed planting has been accompanied by dry weather and soil moisture deficit.
Moreover, this season local Ukrainian rapeseed prices have risen by less compared with spring crops, such as wheat, corn and sunflower seeds. Rapeseed prices increased by just 6pc from 1 July to 23 November, whereas wheat prices rose by 37pc, with corn and sunflower seeds prices adding 51pc and 81pc to their values, respectively. And some farmers are consequently choosing to favour the planting of other crops over rapeseed.
The biggest drop in planted areas for the 2021-22 rapeseed crop has been registered in Odessa and Mykolaiv regions and southern parts of Vinnitsa, Cherkasy and Kirovograd regions. Overall, Ukrainian rapeseed planted areas could drop by about 300,000 ha compared with last year, with current production estimates ranging from only 1.7mn t to 2.1mn t.
As a result, Ukrainian rapeseed exports in the 2021-22 marketing year could fall to just 1.7mn t compared with the estimate of 2.2mn t for this season, given that rapeseed exports from Ukraine usually reach 90pc of total production volume.
This may hit the European market, which is the major destination for Ukrainian rapeseed, where Ukraine usually exports 85-95pc of its total volume. Ukrainian rapeseed is very important for the EU balance sheet, with European countries purchasing around half of their total rapeseed import volumes from Ukraine over the past two seasons.
A drop in Ukrainian exports to the EU may lead to Ukraine losing hold of its leadership in the European import rapeseed market and a subsequent increase of canola imports from rival destinations, such as Canada and Australia. Canada particularly can increase its canola exports to the EU, amid a greater availability of export supplies owing to trade tensions with China, which used to be one of the biggest importers of Canadian canola.
