China's Sunflower Seed Industry: Declining Export Volume and Booming Export Prices in 2023

Published 2023년 10월 31일

China's sunflower seed exports have declined by 15.20% YoY in 2023, with a significant drop in planted area and weak supply cited as the main reasons. Despite the decline in export volume, prices have steadily increased, reaching a six-year high of USD 2,050/mt in Aug-23. However, the start of the new harvest season in August is expected to ease the tight supply situation. According to a USDA report, there is a 33.3% YoY increase predicted in the sunflower seed planted area in China, which should help reduce the prices by 30% in Q4-2023.

Declining Export Volume and Booming Export Prices

So far into 2023, China's sunflower seed exports have significantly decreased compared with the export volume in 2022. By the end of Aug-23, the total quantity of sunflower seeds exported from China witnessed a substantial decline of 15.20% year-on-year (YoY) to 244,049 metric tons (mt).

Despite the export volume decline, prices have shown a steady uptrend from Jan-23 to Aug-23. According to the latest data released by the General Administration of Customs of the People's Republic of China (GACC), the average sunflower seed export price in Aug-23 stood at USD 2,050/mt. It increased by 20.37% compared with the price in Jan-23 and reached a six-year high. The export price increase is even more evident on a yearly comparison, with a 40.12% YoY increase from USD 1,463/mt in Aug-23.

Source: General Administration of Customs of the People's Republic of China (GACC)

Declining Planted Area and Weak Supply

Since 2016, China’s sunflower seed planted areas have been showing a sustained downtrend. In 2022, the planted area for sunflowers dropped to a 10-year low of only 0.58 to 0.6 million hectares (ha). This was mainly due to the impact of China’s national grain and agricultural product security policy, epidemics, and unfavorable weather conditions. Consequently, the production dropped to 1.9 million metric tons (mmt) in 2022, a decrease of 11.63% YoY. In addition, the rising cost of sunflower seed cultivation in recent years has further enhanced the price surge. The rising costs are attributed to increased input costs, particularly labor focus, fertilizers, currency devaluation, and international conflicts.

Furthermore, there was a high incidence of internal mildew in the harvested seeds in 2022, which resulted in a shortage of qualified seeds in 2023. From Aug-23 to Sep-23, inner Mongolia, the leading sunflower seed producer in China, experienced heavy rainfalls, flooding cultivated riverbeds and increasing the risk of contamination. The financial report from Qiaqia Food for 2023 stated that the sunflower seed harvest season was adversely affected by heavy rainfall, leading to a significant number of internally mildewed seeds. As a result, sunflower seed suppliers were reluctant to sell in the first half of the year, which caused a surge in domestic market prices. This is also reflected in the export market.

Price Forecast in Q4

From Q1-2023 to Q3-2023, the industry faced significant pressure due to the surge in raw material prices. However, the situation started to improve in the fourth quarter of this year as the start of the new harvest season from August. The United States Department of Agriculture's (USDA) latest World Agricultural Production report predicts a 33.3% YoY increase in the sunflower seed planted area in China to 0.8 million ha in marketing year (MY) 23/24. This supply increase should help ease the tight supply situation in the fourth quarter. According to the Specialized Committee for Nuts and Dried Fruits of China National Food Industry Association (CNSA), the sunflower seed price is expected to drop by 30% in Q4-2023.