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Droughts affect outputs; regional competition - price levels

June 13, 2017 at 7:48 AM , Starry Night Ltd.
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The great majority of the crop quickly finds its trade routes to EU member countries. The trade routes for the upcoming crop are already known. What is not known yet is the price!

Competitive prices drive high exports

SOFIA. According to the Agricultural Ministry, the average monthly EXW purchasing price in July 2016 was estimated at 0.336 EUR/kg EXW Bulgaria. Although the majority of the crop was quickly exported, mostly to EU member states, after marketing season 2016-17 started, the average purchasing prices for August 2016 (0.337 EUR/kg EXW) and September 2016 (0.336 EUR/kg EXW) were close to that of July.

Competitive local prices drove high exports, as by the end of September 2016, approximately 455,000 mt were estimated to have been shipped to foreign countries (by the beginning of June 2017, exports stood at 503,771 mt). The reason: weaker output in countries from Western Europe. During the last season, rapeseed was mainly exported to Belgium, Germany and France, among other EU countries.

Will the picture be much different this season?

According to the recent USDA report, specifically, droughts, which did not surpass the South regions of Bulgaria, affected Germany, France and Spain. Even though projected outputs matter, competitive prices lead the market. Further, the USDA report shows quite an increase in expected aggregate output of Ukrainian rapeseed, by as much as 68% on a yearly basis, projecting it to stand at 2.1 mmt by June 2017. Ukraine is a major player in the Black sea region and its export prices matter!

Farmers expect the great majority of locally produced rapeseed to quickly find its ways to the foreign markets of EU countries this year, but what the market will settle to as a price remains to be seen!

 Rapeseed, Bulgaria

Crop

EUR/kg

Rapeseed

0.340

EXW Bulgaria

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