Rapeseed: Is there a mismatch between demand and supply?
March 9, 2018 at 12:03 PM ,
Starry Night Ltd.
BULGARIA. During last week, the country was covered in snow; in some fields, the snow cover measured up to 50 cm. Yet, since the beginning of this week, air temperatures have continued rising, as the weather forecast sets temperatures within the general North region to reach as high as 18 Celsius degrees at places while in the general South region to rise to as much as 20 Celsius degrees in others. With such high temperatures, there is no danger of winterkill while moisture reserves have become plentiful; corps will resume their vegetation processes. Snow cover will be a reserved luxury only in places with high altitude.
Rapeseed: demand-supply mismatch
If the brisk export rate of this season, which has become quite customary for the past few years, could serve as an assuring signal for local market players, the country would be expected to take an overweight position in regard to planting the crop. Yes, one would expect so, but the reality is quite different. The latest released data by the Ministry of Agriculture, shows farmers to have planted 172,659 ha of rapeseed for the upcoming harvest, which on a yearly basis is by 7% less than what they had sowed for the previous season. Neither Spring nor Summer has yet passed for combines to enter the fields and thus provide a figure for the expected output, but lower planted acreages will inevitably lead to a weaker national output, ceteris paribus.
|
Harvest 2017-18 (01.07.2017 – 02.03.2018) units in MT |
|
|
Beginning availability |
25,000 |
|
Aggregate output |
458,110 |
|
Imports |
32,655 |
|
Domestic consumption |
49,600 |
|
oil & biodiesel production |
49,600 |
|
Exports to the world |
421,861 |
|
to EU markets |
388,365 |
|
to rest of the world |
33,496 |
Source: Bulgarian Ministry of Agriculture
Although local consumption is limited, and so far in the season has accounted only for 49,600 mt, exports, on the other hand, stood at 421,861 mt out of 458,110 mt aggregate output. When the ratio of exports to output hovers at such a high level, local supply should properly respond. Although regional competition matters, the country does not need to head so much regional rivals such as Romania and Ukraine, for instance, since its output is small while shipped volumes to EU markets account for the greater majority of exports; indeed, the peak of exports happen within the few months after harvest. Yet, lower planted acreages downbeat upcoming export prospects!
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