Russian rapeseed and by-products market experiences significant fall in 2015/2016 marketing years. The expert analysts assess the amount of rapeseed harvest in Russia at 1 mln tones. This rate shows a significant 30.9% fall of rapeseed production during the year. Moreover, it should also be taken into account that this situation may lead to oilseed consumption decrease by 0.35 mln tons to 1 mln tons in 2015/2016.
Russia faces 50% rapeseed export decrease
Rapeseed and by-products production decrease caused the fall in the export sector as well. Thus, the possible amount of rapeseed export from Russia in 2015/2016 marketing year may be 50 thousand tons as compared to the 104.2 thousand tones in 2014. Despite the lowering of export tax, Russia fails to show stable rates of rapeseed export. For the time being, the export tax index is 6.5%. Moreover, such export rates are determined not only by the lower index of rapeseed production but also by the high rivalry between the people who are engaged in processing of the rapeseed products.
Only 22 thousand tons of rapeseed was exported from Russia in September and October, which is the lowest rate since 2012/13 marketing years.
Appalling climatic conditions became the reason for starting the rapeseed harvest reaping in late June 2015. The generous precipitations of rain make people engaged in agriculture reap the harvest later than usually and thus only in early July the first consignment of rapeseed production entered the market.
The prices for the first batch of reaped crops started at 22000-23000 RUR/t CPT (cost per transfer). The reaping campaign in the central region started only in early August and the prices for the harvest were 20000-23000 RUR/t CPT. The district of Volga initiated the start of the campaign at 20000-22000 RUR/t CPT and Western-Siberian district at 18000-19000 RUR/t CPT.
Unstable exchange rate also has impact on the industry
Rising tendency in the sector did not last for a long time because in the early October the industry felt the consequences of the lack of the supply. In addition, the growth of prices did not have a significant impact on the amount of the supply as the experts could watch the tendency of staggering monetary market as well as further possibility of prices' growth.
Commercial activities of the market were not that high at the beginning of the season. Only in December, when the farmers needed working capital before the New Year holidays, the supply experienced some kind of growth. Thus, the industrial sector faced rapid price boost. One could observe the peak of the price growth by the end of January, when the prices reached 28000-28500 RUR/t CPT in the central region, 26000-27000 RUR/t CPT in the district of Volga, 25000-26000 RUR/t CPT in the district of Western-Siberia. Nevertheless, the amount of the supply was minimal and the prices were too high.
Moreover, more than a half of winter rape in Stavropol region also died. The amount of rape in good condition is 7.1 ha, which is 11.8% of the whole plant area, and 25.8 ha, which is 43.1% of the whole plant area, are in acceptable condition. That means that more than a half of winter rape died and is in bad condition.
Agripowers which mostly deal with rapeseed crunching show quite stable performance for this reaping season. These facts lead to the competition intensification taking into account the lower amounts of rapeseed production.
The thoughts of branch experts and trade organizers about the rapeseed production in Russia
Branch experts predict the reduction of oil production made of rapeseed in Russia to 365 thousand tons in 2015/16 compared with 495 thousand tons produced only a year ago. Such rates are also strongly connected with the fact of rapeseed harvest reduction. The amount of produced rapeseed cake/meal can face increase in the amount to 523 (709) thousand tons.
Trade organizers of the sector believe that the market will face further jump in prices mainly because of the rapeseed undersupplies, low stocks of crunched plants and the devaluation of ruble. There will not be any significant changes at the market and there will not be any remarkable activities. Meanwhile, this situation may become incentive for the rapeseed oil exports as well.
Market operators make comments upon the current situation and state that this state of things was caused due to the low rapeseed plant areas. Moreover, analysts make bleak forecasts as well. They state that the plants which usually work with rapeseed have to change their specialization and to work with the alternative oilseeds such as sunflower and soybean camelina oil.
The state of things at the world rapeseed market
Meanwhile, the Oil World analysts make predictions for rapeseed imports to the EU in 2015/16 in the approximate amount of 3.3 million tons against the previous estimate of 3.1 million tons, which is also significantly higher than in the last year (2.57 million tons.)
According to the report, the main suppliers of oilseed in the EU in the current season will be Australia, Ukraine and Canada.
For example, rapeseed shipments from Ukraine are expected to reach 1.1 mln tons, which is slightly lower than the last MY (1.26 mln tons), The biggest part of the rapeseed products has already arrived in the EU. Export of oilseeds from Australia is predicted at the record rate of 1.55 million tons, which is significantly higher than the last year (1.07 million tons). Canadian rapeseed supplies are estimated at 0.5 mln tons (129 thousand tons in the last season), 60% of which have already been shipped to the EU.