W1: Weekly Sunflower Update

Global

World Sunflower Production Estimated Downward

International organizations have recently reduced their estimates of global production due to the negative effects of the weather towards the conclusion of the Russian harvest, which caused a downward adjustment of their production. However, compared to earlier seasons, production in this country would continue to be record-breaking. The global production of sunflower seeds was estimated to be 52.9MMT a decline of 9% YoY with an adjustment of 1.1MMT from the November data. Estimates for Ukraine dropped by 0.4 MMT, the EU and Russia dropped by 200,000MT and 500,000MT respectively. A total of 49.3MMT of milling is anticipated worldwide. On a monthly basis, no major changes in the global estimates for sunflower oil were seen. The high level of existence registered at the beginning of the campaign contributed to a higher projection of world exports.

Increasing Global Price Spreads Between Sunflower Oil and Soy Oil

The price of sunflower seed and oil globally will certainly rise as Ukraine's crop of sunflowers drops. Since Ukraine is the leading exporter of sunflower oil, this is not surprising. Previously at 45–46% of global trade, the country's share will drop to 40% in MY 2021/22. According to the USDA's prediction for MY 2022/23, Ukraine will lose its top spot and see a 33% decline in its share of world commerce. The 2022/23 MY currently in effect is an exception to the rule. The Ukraine's steep decline in sunflower production did not lead to growth, but rather, a decline in sunflower and oil prices on the global market under the influence, first of all, of the war.

Ukraine

During the 10 Months of the War, Ukraine Exported Almost 39MMT of Agricultural Products

Since the start of the invasion, almost 39MMT of grain, oil crops, and their processing products have been shipped by Ukraine. Corn accounted for 15.6 MMT of the agricultural crops shipped during the 10 months of the war, followed by wheat with 8.6 MMT and sunflower oil with 3.3MMT. As of December, wheat exports for December totaled 1.6MMT, which was unchanged from November. Additionally, supplies of sunflower oil remained at 468,000MT, almost unchanged from November. Instead, 312,000MT of sunflower seeds were shipped, resulting in a drop of 65,000MT. 

In December 2022, Ukraine Managed to Export 7MMT of Agricultural Products

Ukraine was able to export 7MMT of agriculture products in December 2022, which is 2% less MoM. Exports of oil crops were 867,600MT, with sunflower seeds accounting for 34%, soybeans for 29%, and rapeseed for 25%. As for vegetable oils, exports totaled 468,400MT, representing a 34% MoM decrease, especially sunflower oil, which has decreased by 94%.

Corn and Sunflower Oil Will Be the Leaders in Agricultural Exports From Ukraine in 2022

During the war in 2022, 99.8 MMT of items worth USD 44.1B were exported by Ukrainian businesses. In terms of export value, sunflower oil comes in second position with USD 5.46B. Value reduction of 14.4% and volume reduction of 16.3% as compared to 2021 at 4.29MMT. Nevertheless, in 2022  sunflower seeds ranked among the top 10 of exported products and shipped for 2.7 MMT for USD 1.25B.

Sown Areas Under Rapeseed, Soybeans and Sunflowers Will Increase in 2023

Rapeseed, soybean, and sunflower oilseeds will be sown on a larger scale. This is because the price of oil crops per tonne is higher and the cost of logistics per tonne is lower. In other words, 1 hectare will yield more money for farmers. This is good for farmers and macroeconomics, and crop rotation is not essential.

Argentina

The Drought in the Argentine Countryside Is the Worst Since the Beginning of the New Century

The National Meteorological Service and climate experts predict a lack of rain these days in any region of the national territory. Depending on the quantity of rain falling, the consequences of this drought are having varying effects on the country's fertile land. Crops of coarse grains, such as maize and sorghum, and oilseeds, such as sunflower, soybeans, and peanuts, are expected to be the most severely affected.

Sunflower Harvest Amounts to a Total of 6.3% Of Planted Area

While the sunflowers in the Buenos Aires region are entering the reproductive stages and maintaining an adequate crop condition, the sunflower harvesting in the scoop regions of the northern agricultural area is becoming more fluid. On a national level, the harvested surface amounts to 6.3%, and the average yield is 15.5 qq/ha. In this case, the current campaign's production forecast of 3.9MMT could be maintained.

Wednesday With Little Commercial Dynamism in the Rosario Square

The local market's activity remained remarkably consistent over W1 of 2023, showing little overall variation and largely stable prices for the major grains. The same number of engaged participants were present when it came to sunflower, and prices for the available grain were raised. Prices for offers for immediate delivery increased by USD 20/MT to USD 450/MT, while prices for unloading between January and March 2023 remained the same as Tuesday, January 3, at USD 430/MT.

India

The Reduced Import Rate of Vegetable Oils in India Will Remain in Effect for Another Year

The effect of the reduced rate of duty on the import of sunflower, soybean, and palm oils as well as lentils has been extended by India for an additional 12 months, through March 2024. Midway through 2021, India reduced the rate of duty it charges on imported vegetable oil as their prices in international markets hit record highs.

Zimbabwe

Pre-planting Producer Price Announced in Zimbabwe

Maize and traditional grains' pre-planting producer price was set at USD335/MT, while soybeans and sunflowers were offered for USD597.59/MT and USD687.23/MT, respectively. The Minister stated that the proposed prices for maize, traditional grains, soybean, and sunflower were mandatory prices for grains purchased by the Grain Marketing Board (GMB).