Weekly Product Updates

W31: Sunflower Update

Crude Sunflower Oil
Argentina
Supply Chain Management
Sunflower Seed
India
Market & Price Trends
Published Aug 11, 2023
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In W31 in the sunflower oil landscape, the global vegetable oil price index rose to 129.8 points in July, marking a 12.1% month-on-month (MoM) increase and breaking a seven-month decline streak. This growth is attributed to surges in global prices of sunflower, palm, soybean, and rapeseed oil. Sunflower oil prices alone rose by over 15% MoM, driven by uncertainties regarding Black Sea export supplies due to Russia's exit from the Black Sea Grain Initiative.

The Spanish Sunflower Association (AEG) anticipates a new global sunflower seed production record. Based on harvest projections in the European Union (EU) and Ukraine, the seed production is estimated to surpass the previous record of 56.2 million metric tons (mmt) achieved in the 2021/22 season by approximately 700 thousand metric tons (mt).

Starting in August, the export duty on Russian sunflower oil will be calculated in rubles instead of USD. According to a government decree from June 30, 2022, the base price for calculating the duty is set at 82,500 rubles/mt (equivalent to USD 851.40/mt), a change from the previous base price of USD 1,000/mt. In the upcoming 2023/24 season, Russia is projected to achieve a record export of 6.38 mmt of vegetable oils to international markets. Sunflower oil exports are anticipated to reach 4.37 mmt, 250 thousand mt more than expected for the current season (which ends on August 31) and 1.2 mmt higher than the result of 2021/22. Furthermore, the Institute for Agricultural Market Studies (IKAR) estimates the 2022/23 sunflower oil production at 6.4 mmt.

Ukraine's projected sunflower harvest for 2023 has been revised upwards to 13.9 mmt from the initial estimate of 12.7 mmt. The country is also anticipated to process approximately 12.5 mmt for oil production. Ukraine's sunflower oil exports continue to rise, with shipments surpassing 500 thousand mt in July, exceeding expectations. This growth follows earlier exports of 453 thousand mt in May and 476 thousand mt in June. Romania and India were the key buyers in July, with Romania accounting for nearly a quarter of the exported volume. Overall, Ukraine's sunflower oil exports for the 2022/23 period reached 5.2 mmt, a notable increase from 4.1 mmt in the same period of the previous season.

The Buenos Aires Grain Exchange's initial estimate for Argentina's 2023/24 sunflower campaign predicts a total planting area of 1.95 million hectares (ha), marking a decrease of 250 thousand ha from the previous cycle. The reduction is attributed to low international market prices for sunflowers due to an anticipated rainy spring. Additionally, the expectation of higher spring-summer rainfall might encourage producers to choose alternative coarse crops.

India set a new record by importing 1.76 mmt of edible oil in July, driven by refiners building up stocks for upcoming festivals and supply uncertainties from the Black Sea region. Notably, sunflower oil imports soared by 73%, reaching a six-month peak of 330 thousand mt. However, India's sunflower oil imports may decrease in the future due to rising prices linked to Russia's exit from the Black Sea grain deal. 

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