Canada Markets

Media outlets are reporting this week that Russia's agriculture ministry has proposed to the government that far eastern areas of the country, bordering "several Asian countries," be allowed to export rapeseed.

The country banned rapeseed exports from April 1 through to August 31 of this year in a move to protect domestic supplies. It is perhaps no surprise that this is making headlines as we near the end of the export ban period.

The USDA's 2021-22 attache report (Russia: Oilseeds and Products Annual) dated June 25, 2021, forecasts crop year production to reach a record 2.5 million metric tons, with exports to reach a record 800,000 metric tons of seed.

Fast forward to the present, the USDA's Foreign Agricultural Service tables show 2021-22 production at 2.775 mmt, higher than originally forecast, while exports are estimated at 340,000 mt, down 58% from the original forecast. Of course, the export ban played a role, while the export ban may have contributed to the 29.4% increase in rapeseed oil exports estimated from 2020-21 to 2021-22 to 950,000 mt. Ending stocks of rapeseed are forecast to grow significantly to 123,000 mt, but remain tight when you consider the size of the country.

Looking at the USDA's 2022-23 forecast, production is expected to grow by a modest 25,000 mt to 2.8 mmt, exports are to grow to 450,000 mt, still shy of the 2020-21 record of 681,000 mt, with ending stocks to fall to an even tighter 78,000 mt.

What immediately comes to mind is did Russian producers seed more acres of spring rapeseed in 2022 even though exports have been banned for five consecutive months? The USDA is currently forecasting 2022-23 harvested acres to fall slightly from the previous crop year. Secondly, will the seed even exist in order to expand exports significantly in any direction? Current USDA forecasts would say no.

Russia may remain a long-term threat in this market. A 2019 Western Producer piece quotes a German industry official that estimated Russia to plant 12.35 million acres by 2024, while the USDA is forecasting 2022 harvested acres to fall by 1.4% to 3.954 million. This shift in acres is not happening near as fast as expected.

Cliff Jamieson can be reached at cliff.jamieson@dtn.com

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