Ukraine reported an 83% increase in rapeseed production for the 2017 harvest ending on 1 December but saw a drop in soyabean and sunflower seed output, World Grain reported on 29 December.

According to a report by the Ministry of Agricultural Policy and Food of Ukraine (MAPFU), rapeseed production totalled 2.2M tonnes while soyabean production reached 3.8M tonnes, a 12% decrease. Sunflower seed production was 11.6M tonnes, down nearly 15% from the previous year.

According to the US Department of Agriculture’s Foreign Agricultural Service (FAS), changes in tax legislation and excess crush capacity were likely to lead to additional processing activity and higher exports of processed products.

While Ukraine processed almost 100% of sunflower seeds domestically, soyabeans and rapeseed were exported as unprocessed bulk commodities and also processed into meal and oil for export.

The World Grain report said that the Ukrainian state budget for 2018 would abolish value-added tax refunds for exports of unprocessed soyabeans, rapeseed and sunflower seeds after 1 March.

“This change could tip the scales from exporters of oilseeds in favour of processors that export oils and meals,” the FAS said. “The larger impact of this change will be felt in the 2017-18 marketing year by soyabean exporters, who typically ship between 30% to 50% of total exportable amounts between March to September.”

The impact on rapeseed exporters would be minimal because less than 10% of rapeseed was typically exported between March and June, the FAS added.

Crush volumes for soyabeans and rapeseed in 2017-18 were forecast to increase due to excess domestic crush capacity and lower harvest numbers for sunflower seed.