W25: Sunflower Update

In W25 in the sunflower landscape, according to the June report from MARS, the weather conditions across EU countries from May 1 to June 12, 2023, varied, impacting the yield potential of several crops. However, the sunflower yield remained unchanged at 2.21 mt/ha. Recently, Ukrainian sunflower oil prices experienced a decline to USD 670-680/mt for port delivery, but quickly rebounded and even surpassed USD 700/mt. In response to the rising prices, processors promptly increased the prices of sunflower demand in Ukraine by USD 13.54-18.96/mt, with prices reaching USD 379.20-392.74/mt for plant delivery. The prices were further supported by increased demand prices for deliveries to the EU, with a rise of USD 20-30/mt and a slight increase in ship movement through the grain corridor in the past week. Meanwhile, the global price of sunflower seeds increased from USD 325.03-338.57/mt in W24 to USD 379.20-392.74/mt in W25, representing a USD 54.17/mt increase. According to the EAC, in W26, the cost of sunflower seeds is expected to reach a maximum of USD 419.83/mt in Ukraine. However, as factories begin to process rapeseed in July, the price of raw materials is anticipated to decline. The Ukrainian Ministry of Agrarian Policy and Food has reported the completion of the sowing campaign, with the forecast for spring grains and pulses surpassing expectations by 4%, reaching 5.67 million hectares. Sunflower planting also saw significant growth, reaching 5.31 million hectares, a 12.9% increase compared to the previous year.

In Russia, the projected sunflower oil production for the 2022/23 season is expected to reach approximately 6.3 million mt, representing a 7% increase compared to the 2021/22 season. Furthermore, by the end of May, sunflower oil production in Russia for the 2022/23 MY exceeded 4.8 million mt, indicating a 4.5% growth compared to the same period last season. A total sunflower oil export volume of around 4 million mt is forecast, 900 thousand mt higher than the 2021/2022 season. Additionally, frosts in May and drought in June have negatively impacted wheat, buckwheat, barley, and sunflower crops in certain regions. The Altai Territory was particularly affected, leading to significant damage to the grain harvest. Currently, 15% of all fields are in critical condition.

Kazakhstan's implementation of an export duty of 20% on sunflower seeds, not less than USD 109.56/mt in early 2023, has benefited domestic oil extraction companies by providing them with raw materials. The Minister of Agriculture of Kazakhstan reported a 62% increase in oil production since the imposition of these measures, leading to an 8% decrease in domestic market prices in 2023. Furthermore, sunflower oil exports from Kazakhstan reached 229.4 thousand mt in 2022, marking a 1.7-fold increase compared to 2021. In Turkey, hail storms in the Lalapaşa and Süloğlu districts of Edirne caused damage to pre-harvest wheat, sunflower, barley, and canola fields. Initial assessments indicate that nearly 90% of the cultivated products covering an area of 5 thousand decares were affected. In Brazil, the sunflower planting area has seen significant growth over the past four years, expanding by 149% from 18,600 hectares in 2020 to 46,393 hectares in 2023. The sunflower oil market is also expected to achieve substantial growth, with projections indicating a value in the millions of dollars by 2028. Lastly, in South Dakota in the US, sunflower planting is nearly 89% complete, but less than half of the crop has emerged at this stage.