As rapeseed harvests in Ukraine fall short of last year's levels and concerns grow over potential production cuts in 2025, traders are moving quickly to secure Ukrainian rapeseed supplies—sometimes offering prices comparable to those paid by EU processors. What’s driving this demand, and how are global markets reacting?

Weather Improvements Support Sowing, But Drought Has Already Taken Its Toll

Recent rainfall in western and central Ukraine has improved the condition of rapeseed crops, helping to speed up the sowing process. However, as of September 9, only 534,700 hectares—48% of the planned area—had been sown with winter rapeseed. Early sowings have already suffered from severe drought, which has had a significant impact on crop health.

Rapeseed Prices Surge as Traders Move Quickly

During the past week, export purchase prices for Ukrainian rapeseed increased by UAH 100-200/t, bringing the total to UAH 22,900-23,200/t ($490-495/t) for delivery to Black Sea ports. This price surge has encouraged farmers to ramp up their sales, taking advantage of the increased demand.

Meanwhile, demand prices for rapeseed delivered to processing facilities in the Czech Republic and Germany remain at €465-475/t ($510-520/t). However, logistical costs make road or rail deliveries almost non-existent, as they add an additional $60-70/t to transportation costs compared to shipping to ports.

EU Imports of Ukrainian Rapeseed Skyrocket by 46%

As of September 8, the EU had increased its rapeseed imports by 46% compared to the previous season, bringing the total to 939,000 tons for the 2024/25 fiscal year. Of this, 505,000 tons (54%) were sourced from Ukraine, while 352,000 tons (37.5%) came from Australia.

However, Australian canola exports slowed by 13% in July and by 20% in August. There are rumors that China may start buying Australian canola instead of Canadian, though no shipments from Australia to China have occurred in the past three months.

Canadian Canola vs. Ukrainian Rapeseed: What’s the Difference?

Ukrainian rapeseed and Canadian canola (genetically modified, or GMO) are currently the most available options in the EU market. However, EU processors face limitations when selling meal made from GMO canola, prompting them to prioritize purchasing non-GMO rapeseed from Ukraine.

Canada’s growing processing capacity has cushioned any concerns about China’s potential shift away from Canadian canola. Instead, Canadian farmers are more focused on whether the strong demand for biofuel in North America will continue amid declining oil prices.

Market Outlook: Volatility in Canola Prices and Production Forecasts

November canola futures on the Winnipeg exchange fell by 3.2% to CAD 570/t ($420/t) after a 10% drop in oil prices last week, marking a 2.8% decline for the month. Despite this, the USDA's revised outlook, which projects lower global canola production and stock levels, is expected to provide some support for canola prices.

The current rush to buy Ukrainian rapeseed highlights the uncertainty and volatility in the global rapeseed market. With harvest challenges in Ukraine and export slowdowns in Australia, it’s clear that traders are preparing for potential supply shortages. Additionally, geopolitical factors—such as China’s possible shift from Canadian to Australian canola—could have significant implications for market dynamics in the coming months. As these trends unfold, the market will continue to navigate supply chain disruptions and shifting demands, making it a crucial period for both producers and buyers.

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