Ukraine’s Sunflower Oil Exports Fall amid Rising Domestic and FOB Prices

Published Sep 24, 2021

Due to low harvest volume, the Ukraine government along with the sunflower oil industry has decided to export 5.38 million tonnes of sunflower oil for the year 2021. However, as of September, export volume from Ukraine is forecasted to fall short of the 2020/21 final agreed quotas due to a combination of high prices and the effects of COVID-19 on imports. As a consequence of regulated sunflower exports, the export volume has fallen down by 34% in the first eight months of 2021 compared to the volume recorded in 2020.

Ukraine is the world's largest producer of sunflower seed and sunflower oil, which offers only premium quality products.. However in MY 2020/21, the sunflower crop declined 15% from the previous season as dry conditions in the Kirovohrad, Kharkiv, and Dnipropetrovsk regions affected vegetation and lowered the yield of sunflowers. Due to low harvest volume, the Ukraine government along with the sunflower oil industry has decided to export 5.38 million tonnes of sunflower oil for the year 2021. The targeted volume is about 140,000 tonnes lower than the USDA’s estimate for the year and 1.3 million tonnes lower than Ukraine’s previous year’s record exports.

The lower exports are a consequence of governments’ attempts to take control over growing domestic sunflower oil prices. According to Tridge Price Data, the price of Refined Sunflower oil increased from USD 0.78 per kg in September 2020 to USD 1.58 per kg in September 2021 (~102% year-on-year increase in price). The fact that Ukraine exports over 90% of its sunflower oil production across the world, the Freight on Board (FOB) export prices follow the same trend as the sunflower oil domestic oil prices in Ukraine.

Source: Tridge.

Source: USDA.

During the first eight months of 2021, Ukraine exported 3.09 million tons of sunflower oil which is about 34% less compared to the same period of 2020 (4.68 million tons). However, due to the food price inflation and increase in FOB prices of sunflower oil, the value of sunflower oil exports amounted to USD 3.78 billion, 10% more than in January-August 2020 ($3.43 billion), according to the data of the State Customs Service of Ukraine. The main destinations for the exports during this period were:

Source: ITC TradeMap.

As of September, the sunflower oil exports from Ukraine are forecasted to fall short of the 2020/21 final agreed quotas due to a combination of high prices and the effects of COVID-19 on imports. The government’s decision to limit the exports to curtail the high prices was taken well in time to ensure that the supply can be streamlined according to the opportunities to export. Sunflower oil-producing and processing entities managed to reduce their production volumes to keep up with the limited market for their product. In January-June 2021, Ukraine produced 338.53 thousand tonnes of refined sunflower oil which was 31.2% less than the volume recorded in the same period of 2020.