W23: Sunflower Update

In W23 in the sunflower landscape, the sunflower oil price, which has fallen by 60% in international markets in 2022, is expected to decline further with the decrease in imports in Turkey. This is primarily due to the increase in exportable products and the high customs duty expected to be imposed on sunflower seeds and oil in Turkey, one of the main buyers of Black Sea oil. In the week ending June 2, sunflower oil prices in the Black Sea region reached the lowest level in three years. The FOB price of sunflower oil from the Black Sea region of Ukraine dropped by USD 236/mt in three months to USD 689/mt. In the EU, the initial forecast for the sunflower harvest in the 2023/24 season was increased by 100,000 mt to 11.3 million mt, also 2.1 million mt more than the 2022/23 season. Romanian and Hungarian farmers have good prospects for harvest, compensating for losses in Spain, which is facing an unprecedented drought. Additionally, the European Commission officially extended the EU ban on imports of wheat, corn, rapeseed, and sunflower from Ukraine until September 15 due to severe logistical bottlenecks and limited pre-harvest grain storage capacity in five Member States.

Russian sunflower purchase prices in May dropped by 10% MoM to USD 324.22/mt, mirroring the downward trend in world oil prices. In Russia, from September 1, producers and exporters of grain and sunflower oil will have to provide information on over-the-counter contracts. Russia is anticipated to export more than 5.9 million mt of vegetable oil this season (September 2022–August 2023), a 28.3% increase over the 4.6 million mt exported the season prior. This includes exports of more than 3.5 million mt of sunflower oil, a 17% increase over the volume from the previous crop year. For the first 8 months of the current season, Russia has sent 556 thousand mt of sunflower oil to China, an increase from 71 thousand mt in the previous season. Contrastingly, exports to Turkey dropped from almost 700 thousand mt to 342 thousand mt. India occupies the third position in the ranking of importers of Russian sunflower oil, where deliveries increased from 216 thousand mt to 280 thousand mt.

In Bulgaria, the purchase price of 1 mt of sunflower is around USD 349.39-360.48/mt depending on the region, showing a downward trend. Additionally, the price is currently about 50% below the production cost, which is around USD 554.59/mt. The ban on the import of Ukrainian grain is not working as it should due to large quantities of unrefined and refined oil imported from Ukraine, oversupplying the market and driving down prices. Ukraine supplied EU countries with 1.808 million mt of sunflower between July 1, 2022, and May 28, 2023. Its supply share increased to 84.4% from 27.9% at the same time in 2022, surpassing Moldova. Lastly, a decrease in the purchase of palm oil caused India's imports of sunflower oil to increase by 28% MoM to 319,000 mt in May.