KYIV- Traders have sold two shipments of Ukrainian rapeseed this month to Canadian buyers, a highly unusual trade that indicates the impact of spiking global oilseed demand, market sources said.
Sales were made from Ukraine’s 2021 harvest for August shipment, with two shipments each of up to 30,000 tonnes spoken of, traders said.
Canada is the world’s biggest exporter and producer of the rapeseed variant canola, and its processors rarely import supplies across such long distances. But this year, surging Chinese demand for vegetable oil and animal feed has emptied North America’s farm bins and driven canola and soybean prices higher.
“The sales were apparently made because of tight canola supplies in the Canadian domestic market,” one European trader said. “I have never seen such deals before.”
The sales come as Canada's canola stockpiles are expected to dwindle to an eight-year low by midsummer, just before the next harvest.
“Canadian canola exports have been very strong in past months and there have also been heavy sales to China of canola meal and canola oil along with good domestic demand for biodiesel,” the European trader added. “It looks like some domestic supply gaps are emerging.”
With supplies low, ICE canola futures remain near record highs set in February.
"Supplies have to be near dire to explore supplies out of the Black Sea/Ukraine," said Phil Speiss, a Canadian commodity futures broker at RBC, adding that the Canadian purchases from Ukraine are the first in memory.
Canada is the world's biggest producer of canola, but the current shortage may force domestic crushers to slow down, Speiss said.
Canada has exported 21% more canola via licensed handlers since August 2020, the Canadian Grain Commission said in April, helping to deplete stockpiles. China has nearly doubled year-to-date purchases.
Ukraine's APK-Inform agriculture consultancy said last week export prices for this year's Ukrainian rapeseed had risen by $35 last week on fears over crop conditions across Europe and a possible smaller sowed area in Ukraine.
(Reporting by Pavel Polityuk in Kyiv, Michael Hogan in Hamburg and Rod Nickel in Winnipeg, editing by Louise Heavens and Bernadette Baum) ((firstname.lastname@example.org; +49 172 671 36 54; Reuters Messaging: email@example.com))