W49: Weekly Sunflower Update
Global
Lower Forecast for Global Oilseed Production
The USDA forecasts global oilseed production for the 2022/23 season at 644.4MMT, a 1.2MMT decrease from the November forecast. Lower forecasts for sunflower, rapeseed, palm seed, and cottonseed production are partially offset by higher soybean production. Based on harvest results, the forecast for sunflower seed production in Russia and Ukraine has been reduced.
Global Sunflower Seed Analysis for 2022/23 Season
The lower harvest, the low level of processing, and the projections of increased seed shipments have impacted Ukrainian sunflower oil exports. The price of sunflower oil in Rotterdam in November was USD 1,300/MT. The past month has seen a downward trend in pricing in Argentina. The predicted global production of sunflower seed for 2022/23 is 53.9 MMT, a 7% YoY decrease. The rises anticipated for Russia and Argentina are insufficient to make up for the declines in the estimates for Ukraine, where a YoY drop of 5.8MMT is expected to reach about 11MMT, and for the EU, a YoY drop of 800,000MT is expected to reach about 9.7MMT.
In Argentina, the estimates for both the sunflower seed and its oil are maintained. On a monthly basis, national grain production is maintained at 3.7MMT, representing an increase of 9% YoY. As regards oil, what was produced in the 2022/23 season would reach 1.45MMT, a decline of 0.8% YoY. Exports would reach 925,000 MT, an increase of 2.2% YoY. With this, the national participation in the global oil trade would amount to 7.5%.
Europe
EU Sunflower Seed Imports Reach Record High
The EU-27's sunflower seed imports for the 2022/23MY (July-June) have already surpassed all annual import volumes since 2003/04, as the bloc has increased crushing activity in response to firm domestic vegetable oil prices, compensating for a poor crop harvest. The EU's combined imports of sunflower seeds from July 1 to December 4 totaled 1.32MMT, a significant increase from the 197,000MT imported at the same time last year. The import volumes for the 2022/23 season have already exceeded the bloc's total annual receipts for all years except the 2002/03 and 2003/04 MY.
So far this year, the EU's imports have also set a new high for the July-December period. Ukraine has contributed 1.15MMT, making up 87.1% of overall imports. This was a significant increase from the 10,300 t supplied from the origin during the same period the previous year. Meanwhile, imports from the EU’s other suppliers, such as Moldova, Serbia, and China, were unchanged in absolute terms.
The Yields Potential of EU Sunflowers Decreased
Due to the drought, the EU harvested significantly fewer sunflower seeds in 2022, at 9.3 MMT, which is 10% less than in 2021 at 10.4 MMT. Long-term averages of 10.2MMT were also missed. Despite an increase of around 18% in cultivation area to a new high of 5.1M hectares in 2022, only yields of 19.5MT/ha were obtained, which is nearly 18% lower than in 2021. The prolonged drought and heat over the summer months of 2022 led to yield losses, thus limiting the potential for breeding yields.
Oilseed Production in the EU Is Expected to Be Lower in 2022/23 MY
The forecast for EU countries' oil crop harvest in 2022/23 MY was reduced, but the assessment of sown area remained unchanged. The harvest forecast for sunflower has been reduced from 9.18MMT to 8.99MMT, a 12.6% decline YoY, with a yield of 1.76 t/ha, a decrease of 24.1% YoY, to be harvested from 5.1M hectares.
Ukraine
High Rates of Export of Oilseeds From Ukraine Support Purchase Prices
Interruptions in energy supply hinder the work of Ukrainian industrial enterprises and port infrastructure, resulting in oil crops being exported rather than processed. According to the Ministry of Agriculture, exports of oil crops and sunflower oil from Ukraine slowed in the first decade of December, while exports of sunflower meal increased dramatically. During the period of December 1-8, 159,000MT of sunflower meal was exported, with more than 70%, or 112,400MT, being shipped to China.
In W49, Russia continued its intensive missile attacks on Ukraine's civilian infrastructure, causing disruptions in energy supply and the closure of many businesses, including oil extraction plants. As a result, sunflower purchase prices in Ukraine increased to USD 440-470/MT with factory delivery, but purchases are made by a small number of processors. Because producers are currently harvesting corn, there is no supply of sunflowers, which leads to higher prices. Export demand for sunflower to Romania, Hungary, and Bulgaria fell to USD 540-560/MT, while demand for sunflower oil fell to USD 1,120-1,180/MT DAP Poland and Bulgaria, putting pressure on sunflower prices.
However, they are supported by a drop in sunflower harvest forecasts in the Russian Federation, where as of December 5, 13.7MMT of sunflower were threshed from 7.5M hectares, or 75% of the area, with a yield of 1.83MT/ha and the remaining areas will not allow threshing due to frosts and precipitation in the form of snow.
Next Year, Ukrainian Farmers Will Sow More Sunflowers and Soybean
In Ukraine, the area set aside for maize planting is predicted to decline by the Ministry of Agrarian Policy in 2023. Instead, sunflower and soybeans will be prioritised more by Ukrainian farmers. This is due to the high price of nitrogen fertilisers, the current crop's late harvest, and the difficulty in properly preparing agricultural land for the following growing season. As a result, farmers will prioritise growing soybeans and sunflowers.
Russia
Sunflower Prices in Russia Increased by 14% In November
In November, sunflower prices in the Russian Federation rose by 14%. The forecast for a new sunflower crop was reduced by 0.9MMT to 16.1MMT in November due to low harvesting rates. Due to an unusually rainy autumn, the harvesting of late crops was significantly delayed. Experts report that, compared to 90–95 percent in previous years, the proportion of harvested lands at the beginning of December was 75%. According to the survey, the last time a slow harvest of sunflowers was recorded, it resulted in a 15% loss of the crop in 2017.
Over 800,000MT of Oilseeds Have Already Been Harvested by Lipetsk, Russia
Lipetsk farmers are ending the 2022 agricultural season with records despite the lengthy rains and chilly autumn, which delayed their harvesting. Sunflower harvesting is nearing completion in the Lipetsk region, with 13% of the area remaining to be harvested. But a good harvest has already been harvested at more than 435,000MT.
Stavropol Increased the Export of Sunflower Oil to India by 2.5 Times
The demand for sunflower oil has been continuously increasing in many countries around the world in recent years, therefore, one of the strategic priorities is the development of this sub-sector of agriculture, as well as the processing industry. Agricultural producers in Stavropol have increased sunflower oil exports to India by 2.5 times since the start of 2022. The region's production potential is increased by the rising demand for sunflower oil; as a result, more land is being planted, and crop yields are growing as a result.
Kazakhstan
Kazakhstan Will Introduce an Export Duty on Sunflower Seeds
The Kazakhstani Ministry of Trade and Integration proposes imposing an export tariff on sunflower seeds that is equal to 20% of the value of the cargo but not less than USD 105.39/MT. Currently, the cost of exporting Kazakh sunflower seeds to nations in Central Asia is roughly USD 530 DAP Saryagash. Within two weeks, the fee is anticipated to be implemented. Additionally, there are no intentions to restrict sunflower oil exports.
Turkey
Turkey to Increase Sunflower Production in 2022/23 MY
At the end of the 2022/23 growing season, Turkish agricultural producers estimate a roughly 2MMT harvest of sunflower seeds. The gross seed harvest in the nation will increase by 400,000MT compared to the level of 2021/22 MY if expert estimates come in at the anticipated level. Experts predict that Turkey will almost double its imports of sunflower seeds from overseas this season, from 475,000MT in 2021/22 MY to 750,000MT. Turkey also anticipates a decrease in the imports of sunflower oil during the reporting period, from 1MMT a season earlier to 805,000MT in the current season.
Argentina
Sunflower Planting Already Covers 98.7% Of the Projected 2M Hectares
By W49, sunflower sowing in Argentina has now reached 98.7% of the 2M hectares anticipated for the 2022/23 season, at more than 1.97M hectares, which represents a 1.3% YoY delay in the task. In the southern parts of the province of Buenos Aires, where the water levels have recently increased, there are just a few lots left to be sown. Almost 66% of the tables indicate that the crop in the already-planted region is in normal condition.
