In W40 in the sunflower oil landscape, the European Union's (EU) sunflower seed production estimate for the 2023/24 marketing year (MY) was revised downward by 200 thousand metric tons (mt) to 10.1 million metric tons (mmt). Despite this reduction, the projection remains significantly higher than the previous season's output by 800 thousand mt.
Sunflower harvesting in Russia has seen significant progress in 2023, with 5.3 million hectares (ha) harvested compared to 1.8 million ha in 2022. As of October 5, the sunflower seed yield has reached 9.9 mmt, a substantial increase from the 3.5 mmt in the previous year. Furthermore, from October 1 to December 31, 2023, Russia may impose import restrictions on the seeds of nine agricultural crops from unfriendly states, including potatoes, wheat, rye, barley, corn, soybeans, rapeseed, sunflowers, and sugar beets.
The price of Ukrainian sunflower seeds has unexpectedly dropped to approximately USD 68.91/mt, negatively affecting producers and impacting neighboring sunflower-producing countries. The situation is driven by a bumper crop of sunflowers this year, leading to efforts to sell the excess production at significantly reduced prices. Notably, Ukrainian sunflower seeds were recently traded at USD 400/mt, delivered to the port of Constanta and at USD 398.62/mt at the port of Varna.
In Sept-23, Ukraine's sunflower exports amounted to over 12 thousand mt, doubling the Aug-23 volume but a significant 93% year-on-year (YoY) decline. The main volume of shipments was made in the direction of Moldova (about 41%) and Turkey (31%), and only 4% - to Bulgaria. In contrast, in Sept-22, Bulgaria was a major importer of Ukrainian sunflowers, with approximately 74 thousand mt imported. Earlier in 2023, five EU countries, including Bulgaria, imposed restrictions on sunflower imports, which were in effect until September 15.
Bulgaria announced that it would not immediately resume the import of Ukrainian sunflower, in order not to collapse the domestic market, despite the rather high demand for it from Bulgarian processors. Bulgaria extended its ban on sunflower imports from Ukraine until the end of Nov-23 in accordance with a memorandum signed by the Bulgarian government and a committee representing farmers' initiatives. A licensing regime will be implemented during this period, to export sunflower, wheat, corn, and rapeseed. However, despite the ban, supply contracts were established, and shipments occurred in the first two weeks of Sept-23.
Turkey's sunflower seed production for the 2023/24 MY is anticipated to decline by 20%, or 350 thousand mt to 1.5 mmt, due to persistent drought in the primary sunflower-producing region. This decline is also attributed to a 10% reduction in the harvested area as farmers switched to other crops like wheat, driven by better profit prospects and concerns about drought and high input costs. Turkey is expected to compensate for the production gap with increased sunflower seed imports, primarily from Ukraine.
In Sivas, Turkey, the sunflower harvest increased significantly from 10 thousand mt in 2022 to 13,500 mt in 2023. This growth is attributed to the proactive efforts of Sivas farmers, with support from the Ministry of Agriculture and Forestry. Additionally, the cultivated area for sunflowers expanded from 5 thousand ha to 7.2 thousand ha in 2023. The President of the Sivas Chamber of Agriculture has expressed the ambition to achieve a sunflower yield of 20 thousand mt on 10 thousand ha in the upcoming years.