W22: Sunflower Update

In W22 in the sunflower landscape, according to the USDA, global oilseed production is projected to increase by 7% in 2023/24 MY, mainly due to soybean output in South America and sunflower seed in the EU, Russia, and Ukraine. The EU Council agreed on a new regulation to extend the duty-free import of agricultural products from Ukraine for an additional year after imposing restrictions on rapeseed, wheat, maize, and sunflower on May 2. Even so, the Ukrainian authorities insist that the restriction be removed. Due to the ban, Ukrainian sunflower oil has lost up to USD 25-30/MT in price in W22. However, during the meeting in Brussels, the Ministers of Agriculture of Bulgaria, Poland, Hungary, Romania, and Slovakia requested that the EU extend restrictions on the import of Ukrainian grain and oil crops at least until the end of 2023. In France, the Ministry of Agriculture forecasts an expansion of the sunflower area in the country during the current agricultural season by 1% to 868K ha. Sunflowers remain an attractive crop among French farmers despite low yields brought on by the drought in 2022 due to high market pricing and a cheaper growing cost. Estimates from Argentina's Ministry of Agriculture as of May 24 place the overall sales volume of the sunflower crop in Argentina in 2022/23 at 2.6MMT, up from 2.3MMT in the previous year, and the sale of the 2023/24 season crop is currently 100K MT.

Ukraine exported 453K MT of sunflower oil in May, 91K MT less than the record-breaking April quantity, with Turkey continuing to be the biggest consumer. Purchase prices for crude sunflower oil during W22 fell by another USD 50-60/MT to USD 710-720/MT for deliveries to the Danube ports and USD 800-820/MT DAP Italy and Germany for deliveries to the EU. Black Sea port blockades are slowing down shipments of meal and oil to major buyers India and China, while shipments to the EU have virtually ground to a halt due to a lack of demand. Meanwhile, exports of sunflower seeds in May were 46K MT, up from 39K MT in April. Sunflower purchase prices decreased by USD 13.61-27.21/MT over W22 to USD 353.78-380.99/MT with delivery to the plant as processors shut their operations with a significant volume of unsold oil remaining. Since nearly 90% of the 13M hectares of the plan have been planted, Ukraine plans to finish the spring sowing campaign by June 5 to 10. Sowing of late crops such as sunflower, soybeans, and partially corn is currently underway. As of May 26, sunflower planting in Russia's Trans-Baikal Territory had already surpassed the goal by 14.8%, covering 4.6K ha. In Crimea, late oilseeds such as sunflowers are expected to benefit from the rain in W22, especially in the area of risky farming.

From June 1, duties on imports of sunflower seeds and sunflower oil into Turkey increased from 0 to 27% and 36%, respectively, to safeguard farmers from the surge of inexpensive imported raw materials prior to the new harvest. The harvest of Turkish sunflower seed in the current season is expected to increase by 8.6% YoY to 1.9MMT, one of the highest values for the country in the last 10 years. With the support of the state for the farmers, the sunflower cultivation area increased from 8,500 ha to 9,800 ha in Osmaniye, Turkey, which was impacted by the earthquakes in Kahramanmaraş. Additionally, 267 farmers in Osmaniye received 1.7MY of sunflower seeds as part of the "Project for Enabling the Use of Agricultural Lands". Lastly, in Emirdağ, Turkey, 52 ha of grain, sunflower, chickpea, and corn fields in the region were damaged by heavy rain and hail for 5 days.