W30: Sunflower Update

In W30 in the sunflower oil landscape, the International Cereals Council (IGC) projects a global sunflower seed harvest of 56.9 million metric tons (mmt) in the 2023/24 season, representing a 5% increase year-on-year (YoY) driven by good harvest forecasts in Ukraine. Ukraine's sunflower seed harvest is expected to increase by 9% YoY to 15.3 mmt, as the sowing area is estimated to increase 8% YoY to 6.5 million hectares (ha). Russia's production is expected to reach a maximum of 16.4 mmt for the second consecutive year. Meanwhile, Argentina's sunflower area is anticipated to reach 2.2 million ha in the current campaign, producing 4 mmt.

On the contrary, the European Commission (EC) has lowered the European Union's (EU) 2023 sunflower production forecast from 10.8 mmt to 10.6 mmt, a 5% decrease below the five-year average. The reduction is primarily due to worsening yield prospects in Romania, the main sunflower-producing country in the EU, and lower harvest expectations in Denmark, Sweden, Finland, and the Baltic states. Furthermore, according to the July crop yield forecast for the EU, Hungary is expected to have the highest average yield of 2.98 metric ton (mt) per ha, while Spain is projected to have the lowest at 0.70 mt/ha. In Poland, average yields are forecast to increase by 11% YoY to 2.15 mt/ha, but 6% less than the five-year average. The EU's average expected yield for sunflowers is 2.12 mt/ha.

In Europe, contrasting weather conditions prevail with intense heat waves in the south and colder temperatures with rain in the north. In Spain, sunflowers in the southern region are experiencing significant heat stress, with frequent highs exceeding 38°C and even reaching 42°C in Andalusia.

In Ukraine, demand prices for sunflower oil have risen between USD 30/mt and USD 40/mt to USD 880/mt and USD 900/mt FCA (factory), and prices with delivery to buyers have increased up to USD 950/mt due to reduced supply at the end of the season. Difficulties with shipments from the Black Sea and Danube ports, caused by Russian attacks, have impacted sunflower stocks in the region. Factories have shifted to processing rapeseed, leading to a shortage of sunflower oil in the country. Furthermore, Ukrainian exporters received a significant 39% discount on transit oil transportation through the Republic of Moldova. This discount applies to entrepreneurs transporting sunflower oil by rail through Moldova to the Danube ports of Reni, Giurgiulesti, and Galats.

Lastly, in Turkey's Uşak region, the sunflower cultivation area has grown significantly by 240% in the last three years, reaching 3,420 ha, due to seed support from the Ministry of Agriculture and Forestry. Sunflower production is expected to increase by 40% compared to 2022, reaching around 5,140 mt in 2023. The increase in sunflower production is attributed to projects initiated by the Ministry of Agriculture and Forestry, which have positively impacted farmers in Uşak.