W41: Sunflower Update

In W41 in the sunflower oil landscape, in its Oct-23 report, the United States Department of Agriculture (USDA) raised the global sunflower oil production forecast in the 2023/24 marketing year (MY) to 22.03 million metric tons (mmt). The latest forecast is higher than the Sept-23 estimate of 21.65 mmt, and higher than the 2022/23 production of 21.5 mmt. The forecast increase is primarily attributed to higher production in Ukraine, up by 379 thousand metric tons (mt) from 2022/23 MY to 6.02 mmt, as well as Argentina, up by 168 thousand mt to 1.69 mmt.

The projection for global sunflower oil exports for the 2023/24 MY has also increased to 13.82 mmt, a rise of 725 thousand mt compared to the Sept-23 forecast. However, this export volume is still 400 thousand mt lower than the 2022/23 season's export volumet. Specifically, Ukraine's export forecast increased by 300 thousand mt to 5.6 mmt, Russia's by 100 thousand mt to 4.2 mmt, and Argentina's by 100 thousand mt to 1 mmt.

According to the European Union's (EU) Cereals and Oilseeds Trade Committee, Spain's sunflower seed harvest in 2023 is expected to reach 594 thousand mt, down from nearly 800 thousand mt in 2022. This reduction is attributed to a decrease in the planted area and a reduction in yields.

Meanwhile, the French Ministry of Agriculture has increased its forecast for sunflower production in 2023 to a record 2.17 mmt, up from the Sept-23 estimate of 2.08 mmt. This new projection is also 38.5% higher than the average production of the last five years.

Russia's sunflower harvest in 2023 is anticipated to reach a record of 16.98 mmt, exceeding the 2022 figure of 16.36 mmt. This increase is attributed to progress in harvesting work and crop conditions, particularly in the South. In Sept-23, Russia exported 218.7 thousand mt of sunflower oil, valued at USD 193.0 million. Key buyers of Russian sunflower oil during September included China (58.6 thousand mt), Turkey (56.6 thousand mt), India (38 thousand mt), and Egypt (35.3 thousand mt).

As of October 5, Ukraine has harvested approximately 7.3 mmt of sunflowers from 58% of the total sunflower crop area, yielding 2.3 mt per hectare (ha). Despite the increased supply, the purchase prices for sunflowers have held steady within the range of USD 314.08 to USD 327.74/mt with delivery to the factory. This stability in prices has led to growing queues at the factories.

On October 13, the Romanian government approved a decree regulating the import of wheat, corn, sunflowers, and soybeans from Ukraine. Importation of these crops will only be allowed with the explicit permission from the Ministry of Agriculture. Importers, who must be farmers or processors, are required to demonstrate a legitimate need to replenish their stock. Moreover, the imported grains from Ukraine must meet Romania's quality standards, as determined by the National Administration of Veterinary Sanitation and Food Safety, to be used for processing or as animal fodder.

Lastly, sunflower yields in Northwestern Bulgaria have been disappointing at the end of the 2022/23 harvest season. In areas like Byala Slatina, yields averaged around 220 kilograms per ha, with some farmers only achieving 150 kg/ha attributed to strong winds and storms in Jul-23. In semi-mountainous areas, the highest yields reached approximately 250 kg/ha. Farmers in the flat parts of the region, who typically harvested 300 to 400 kg/ha in previous years, are the most disappointed with the lower yields.