W9 Sunflower Update: Bulgarian Sunflower Oil Exports Drop in 2023/24 Season, Russian Unrefined Sunflower Oil Production Surged 29.3% YoY in Jan-24

Published 2024년 3월 7일

In W9 in the sunflower oil landscape, Kazakhstan imposed a 20% export duty on sunflower seeds to regulate exports and curb price hikes for sunflower oil, aiming to prevent a shortage of affordable oil and dependence on imports. In Bulgaria, despite a decline in sunflower oil exports in the 2023/24 season due to weaker imports and reduced production, the country remains a significant exporter, with a notable portion going to third countries. Meanwhile, conflicts in Ukraine and logistical challenges in Black Sea ports have led to a surge in sunflower oil supply in Europe, driving prices down to their lowest levels in three and a half years and impacting imports of soybean and palm oils in EU countries.

Kazakhstan Implements Export Duty on Sunflower Seeds to Control Prices

In Feb-23, Kazakhstan introduced a 20% export duty on sunflower seeds, with a minimum charge of USD 108.52 per metric ton (mt). This decision aimed to regulate the export of sunflower raw materials, mitigate shortages, and curb further price hikes for sunflower oil, which had reached USD 1.77 per liter in Dec-22 and was projected to rise further. Supporters of the duty argue that eliminating it may result in Kazakhstan facing a shortage of affordable sunflower oil and becoming dependent on imports.

Decline in Bulgarian Sunflower Trade and Processing Impacts Oil Exports

During the 2023/24 season, there has been a general decline in the trade and processing of Bulgarian sunflower and its derivatives, leading to a similar trend in sunflower oil exports. Factors contributing to this are weaker imports, reduced production, and processing. Bulgarian companies have exported over 0.33 million metric tons (mmt) of sunflower oil since the beginning of the season, marking a 19% year-on-year (YoY) decrease. Despite the decline, this remains the second-best year for Bulgarian exports, following a record-breaking year prior. The volume of exports remains relatively stable compared to the average of recent years. A significant portion, over 0.25 mmt, of the exported oil went to third countries, with the rest distributed within European Union (EU) member states.

On the import side, Bulgaria imported slightly less than 0.1 mmt of oil from third countries, notably Ukraine and Moldova, compared to 0.135 mmt in the same period the previous year. For sunflower imports, Bulgaria has imported a little over 0.36 mmt, down from 0.58 mmt in the same period last year. However, the country still holds approximately 1 mmt of sunflower, primarily controlled by processors, large farmers, and speculators who anticipate higher prices. Consequently, liquidity remains low at current price levels.

Conflict in Ukraine Drives Down Sunflower Oil Prices in Europe

The conflict in Ukraine and logistical challenges in alternative routes have hampered productivity in Black Sea ports, leading to an influx of sunflower oil into Europe, driving prices down to their lowest level in three and a half years. Despite the availability of cheaper options, demand has not seen a significant uptick, as the European market is saturated with sunflower oil. The increased supply of sunflower oil from Ukraine at lower prices decreased imports of soybean and palm oils in EU countries. According to data from the European Commission (EC), imports of sunflower oil by EU countries have surged by nearly 30% YoY to reach 1.6 mmt since Jul-23. Additionally, the proportion of Ukrainian sunflower oil in these imports has risen from 89.7% in 2023 to 92.6% in 2024.

EU Exports of Oilseeds and By-Products to China Surge in 2023

In 2023, exports of oilseeds and by-products from the EU to China witnessed a significant increase of 35% YoY, reaching 0.8 mmt compared to 0.59 mmt in 2022. Sunflower meal constituted the majority of Chinese purchases, accounting for 67% of the total structure. Its exports increased by 6% to reach 537.8 thousand mt. Deliveries of sunflower seeds reached 107.6 thousand mt.

Russian Unrefined Sunflower Oil Production Rose 29.3% YoY In Jan-24

Russian oil factories ramped up production of unrefined sunflower oil and its fractions to 691 thousand mt in Jan-24, up 29.3% YoY, although it represents a 5% decrease month-on-month (MoM). The decrease from Dec-23 is due to higher production output during that month, which stood at 727.2 thousand mt, representing a 17.3% increase compared to Dec-22 and a 15% increase compared to Nov-23. Overall, the production of unrefined sunflower oil and its fractions has notably increased over the past year.