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Rapeseed: lower output clutched in lower prices

August 18, 2017 at 9:46 AM , Starry Night Ltd.
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Competitive prices in the Black sea region further push down local ones.

SOFIA. Currently, the lower output this season seems too weak to support higher prices. Early in the marketing season, prices started higher by a few euro while now they are under regional competitive pressure; the stronger euro also adds to the burden.

Rapeseed: lower realized output

Fallen-through acreages substantially reduced the output this season. The dry weather in the regions of Southwest and central South and the heavy rains that fell throughout the Northwest and central North regions of the country during harvest negatively affected yields’ potential. Therefore, it comes as no surprise that output this year is lower. By the 10th of August 2017, according to the Ministry of Agriculture, aggregate production reached 455,979 mt. Last year, national output stood at 509,251 mt.

In the realm of prices

A major threat has loomed on the horizon in the region, and it has a name – Ukrainian rapeseed. Ukraine’s rapeseed harvest is almost at its end. Many a times, local market players have adapted to regional competition, but this marketing season, their adaptation could result in lower margins. According to the most recent USDA report on World Agricultural Production, this year’s projected output in Ukraine is to reach 2.1 mmt, which is higher by 68% on a year-to-year basis.

Intermediary local market players could withhold the crop from the market. Yet, down the road, the picture does not look rosy, at all. The growth of rapeseed supply within the Black sea region will take its toll locally.

Rapeseed, Bulgaria

Crop

EUR/kg

rapeseed

0.353

EXW Bulgaria

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