W19: Sunflower Update

In W19 in the sunflower landscape, significant exports of sunflower from Ukraine led to a sharp decrease in the prices of vegetable oils in the EU. As of May 8, sunflower oil prices fell to USD 1072.75/MT FOB compared to USD 1132.35/MT in April. In the EU, oilseed production is anticipated to increase by 4% to 33.13MMT for the marketing year 2023/24, as the total planting area increased by 2% to 12.67M hectares. The production of sunflower seeds is expected to increase by 13% to 10.5MMT. Furthermore, the EU intends to extend the regulation prohibiting the free trade in wheat, corn, rapeseed, and sunflower seeds from Ukraine in Poland, Bulgaria, Hungary, Romania, and Slovakia, which is now banned, from May 2 to June 5. International prices have fallen since the restriction was implemented, with crude sunflower oil prices dropping on Thursday, May 11, to USD 890/MT. In addition, Moldovan farmers threatened to stage a protest and demand a ban on the import of wheat, maize, sunflower seeds, and rapeseed from Ukraine by the end of W19. This is mainly because Moldovan farmers suffered losses totaling at least USD 113M due to the influx of Ukrainian products. In particular, the cost of sunflower seeds dropped by USD 0.20-0.23/kg. In response to a potential restriction on Ukrainian grains announced by the Moldovan Ministry of Agriculture, Ukraine plans on banning all imports from Moldova.

In Ukraine, precipitation and low temperatures slowed down the sowing rates of soybean, sunflower, and corn by 60–90% compared to 2022. The sowing of sunflowers began a month late in May in the Chernivtsi region of Ukraine, due to weather conditions. As of W19, 48% of projected sunflower for the 2022/23 season has been sown on an area of 2.72M hectares in Ukraine. In addition, sunflower production in 2023 is estimated at 13.3MMT, an increase of 21% YoY from 11MMT in 2022, as the area under sunflower is expected to increase by 108% YoY in 2023. Meanwhile, sunflower oil output in Ukraine could total 4.5-4.7MMT in the 2022/23 (September-August) season and reach up to 6MMT in 2023/24 as farmers plan to increase the crop area. In September-April 2022/23 FY, 3.8MMT of sunflower oil was exported from Ukraine, 12% higher than the previous season. By the end of the 2022/23 season (May-August), Ukraine is expected to export another 800K MT. However, sunflower oil exports are now under threat because supplies are not being shipped abroad through the Black Sea export corridor.

In Bulgaria, at a purchase price of USD 415.63/MT sunflower producers report a loss of USD 22.17/ha in W19 taking into account a yield of USD 187.50/ha. In W18, Argentina's late and/or second batches of the sunflower crop were harvested, owing to the cooperative weather. With an average yield of 1.9MT/hectare, 3.9MMT of sunflowers were harvested from 1.9M hectares. India decided on Thursday, May 11, that duty-free imports of sunflower oil shipped before March 31 will be allowed until the end of June after 90K MT of oil were stuck at ports and another 180K MT in transit due to the confusion about import rules. Earlier in 2023, the country canceled a duty-free import quota of 2MMT of crude soybean and sunflower oil for the current fiscal year beginning April 1, 2023. Lastly, at the auction conducted on May 11, Egypt bought 22K MT of sunflower oil at a price of USD 950/MT, which is USD 70/MT lower than April 19 and USD 220/MT lower than at the auction held at the end of February.