Soybean and rapeseed duties adjust farmers’ incomes: how the market reacts to the new rules
22 August 12:52
ANALYSIS
Export duties on soybeans and rapeseed, approved by a parliamentary decision almost a month ago, have not yet been confirmed by the president’s signature under the relevant law. But their impact is already beginning to be felt by farmers who grow soybeans and rapeseed. What is going on in this market – found out by
Temporary enrichment of processors due to falling purchase prices, gradual reduction of soybean and rapeseed acreage, reorientation of agrarians to the production of other crops – such possible consequences of the introduction of export duties on soybean and rapeseed have been repeatedly emphasized by representatives of agrarians.
Leading agrarian associations of Ukraine ask the head of state to use his veto and return the law, which introduces export duties on soybeans and rapeseed, to the Parliament for reconsideration. Moreover, the market is already starting to react as the agrarians warned. Denis Marchuk, deputy chairman of the All-Ukrainian Agrarian Rada, continued.
“Immediately after the law was adopted as a whole, literally within a couple of days rapeseed prices began to sag domestically. The price sagged by about 70 dollars. That is, the market reacts very strongly to any fluctuations that occur in the legislative sphere. Now the price has risen a little, but it is due to the fact that in Ukraine there is a very strong crop failure in rapeseed this season, and it creates a deficit in the market. Therefore, the price went up again. But in general on the market we will see a negative situation”,
– notes the specialist.
Expectations of 10% duty on soybean exports from September stimulate export sales of soybeans in July and August. This trend in the market is noted by analysts of GrainTrade. But there is reason to talk not only about it.
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Sunflower oil could go up in price
More details about what is happening now on the market of oilseed crops
APK-Inform data shows that soybean exporters have updated historical highs.
Thus, Ukraine has harvested a large crop of soybeans this season. Therefore, both exports and processing are at record levels. Due to significant demand, it was possible to work well and almost completely remove all stocks. Exports at the beginning of August amounted to 3.2 million, processing – 2.6-2.7 million tons. As for the impact of the introduction of duties, I estimate that so far it has not affected the price. However, hryvnia prices are expected to drop by 10%. Most likely, the impact of duties on the soybean market will be felt from September-October.
What about the rapeseed crop? Everything is not so optimistic there?
Rapeseed harvesting campaign was delayed due to weather in the center and west of the country. Only in recent weeks, due to improved weather, the harvest has intensified. According to official data, the gross threshing is 2.5 million tons. For comparison: last year, by the end of July, 90-93% of all areas were harvested and the yield was 3.5-3.6 million tons. As for prices, the duties affected hryvnia prices in the port, which fell by 10%. However, due to the lower harvest, most sellers are waiting for higher prices and are not actively entering the market.
There is a reason to remember about another oilseed crop. According to GrainTrade, there is a shortage of sunflower oil supply in Ukraine at the end of the 2024/25 marketing year, caused by the limited supply of sunflower and the transition of most plants to processing soybean and rapeseed. Sunflower and sunflower oil prices in Ukraine have exceeded world prices due to low stocks. What about this year’s crop?
Ukraine is the key supplier of sunflower oil in the world, so we are the main price maker in this market. The main problems are related to weather risks. In Ukraine in the south and in Dnepropetrovsk region, where up to 50% of all sunflower crops are concentrated, they are in very bad condition. Importers see this situation and are already trying to buy oil.
There are very few offers from Ukraine on the spot market, a significant part of the plants have stopped. Firstly – scheduled repairs, secondly – lack of raw materials. Therefore, the supply of sunflower oil is low.
It is clear that buyers expect lower oil prices in September. But the new sunflower harvest will be weak in Ukraine, most agrarians will store sunflower oil until winter, which will reduce supply and lead to low oil supply in the market.
Due to difficult weather conditions, the main countries that grow sunflower will reduce production of raw materials and, accordingly, oil supply will also be lower. This means that the cost of sunflower oil could rise further in the second half of 2025.
And some more forecasts
In the August world balance of oilseeds for the 2025/26 marketing year, the experts of the U.S. Department of Agriculture reduced the forecast of world production of oilseeds compared to July estimates by 3.3 million tons to 690.11 million tons.
The forecast of soybean production in Ukraine was left at a record level of 7.6 million tons. The forecast of rapeseed production in Ukraine was reduced by 0.2 million tons to 3.5 million tons. The forecast of sunflower production in Ukraine was reduced by 0.5 million tons to 13.5 million tons.
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Serhiy Vasilevich
