Rapeseed: the nightmare - fluctuating exports

August 21, 2017 at 1:44 PM , Starry Night Ltd.
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Quickly executing older contracts, local market players rapidly filled in ships, which already set sailed. Yet, when prices are under pressure from regional market forces, local selling parties expect … the unexpected.

SOFIA. As if with the collection of the crop, local farmers would have breathed a sigh of relief. Yet, selling parties’ concerns seem far away from over. Exported volumes slowed down while current prices are lower than what they used to be at the beginning of the marketing season.

Regional players matter

Withholding the crop from the market, farmers and/or intermediary selling parties seem not to gain much in the realm of prices; unfortunately, neither in the short-term nor in the long-term. Why? After all, local consumption on a year-to-year basis is small -- only 16,22% were domestically consumed from the harvest 2016-17 quantities of 509,251 mt -- while the big regional players such as Ukraine could only worsen local matters because of production growth and projected exports.

Exports slowed down

For exports to fluctuate with such peaks and lows so early in the season seems to not have crossed the mind even of the most pessimistic local seller. According to the Ministry of Agriculture, by the 11th of August 2017, total exports amounted to 104,776 mt.

Harvest 2017-18

(01.07.2017 - 11.08.2017)

Carry over

25,000 mt

Domestic output

455,979 mt

Domestic consumption

9,600 mt

Exports to the world

104,776 mt

 Source: Bulgarian Ministry of Agriculture

Shipments via sea routes accounted to 17,082 mt, which on a year-to-year basis was lower by 75%. Only competitive prices could turn the wave in favor of local sellers; yet, at what reduction of profits could that happen?

 Rapeseed, Bulgaria

Crop

EUR/kg

rapeseed

0.353

EXW Bulgaria

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