W34: Sunflower Update

In W34 in the sunflower oil landscape, the European Union (EU) exported a record amount of sunflower oil from Apr-22 to Jun-23, which amounted to 318 thousand metric tons (mt). Key importers included Iraq with 104 thousand mt, India with 28 thousand mt, Morocco with 31 thousand mt, and South Africa with 26 thousand mt. Additionally, a large part of the production was sent from Bulgaria and Romania.

In Russia, the 2023 sunflower harvest is projected to potentially set a new record at 16.60 million metric tons (mmt), surpassing the 2022 yield of 16.36 mmt. Despite this increase, the sown area for sunflowers decreased from 10.12 million hectares (ha) to 9.818 million ha this year, suggesting a higher yield per ha in 2023.

Sunflower harvesting has begun in the southern regions of Ukraine, benefiting from favorable weather conditions with no significant rainfall expected in the upcoming weeks. The market is gradually transitioning to trade the new harvest, driven by demand and favorable prices. Italy recently purchased sunflower seeds from a Ukrainian oil mill for USD 465/mt. Processors have already announced prices around USD 370/mt (without VAT), and it is anticipated that purchase prices from Aug-23 to Sept-23 will likely range between USD 393.09 and USD 406.64/mt.

Bulgarian oil mills are on the brink of closure due to a combination of factors, including a ban on cheap Ukrainian sunflower imports and a shortage of raw materials at affordable market prices. The Association of Producers of Vegetable Oils and Oil Products highlights that local sunflower processors have expanded their capacities to handle 3.5 mmt of sunflower seed annually, and can only rely on about 2.0 mmt of domestically produced sunflower seed. Therefore, the association opposes extending the ban on Ukrainian imports beyond September 15. However, the Chairman of the Board of the National Association of Grain Producers disputes this, revealing that over 600 thousand mt of the 2022 harvest remains unsold in farmers' warehouses. Furthermore, the upcoming harvest is anticipated to yield 2.1 mmt to 2.2 mmt within a month.

Argentina's sunflower planting has advanced by 0.6% weekly, reaching 4.1% of the projected 1.95 million ha for the current cycle, or approximately 80 thousand ha. However, there's an annual delay of 6.2% due to limited progress in the central-north region. This delay is attributed to concentrated rains occurring at the opposite end of the agricultural area where the planting is underway.

Lastly, India imported 1.3 mmt to 1.4 mmt of sunflower oil in ten months of the 2022/23 MY. Of these, Ukraine supplied 400 thousand mt and Romania 390 thousand mt. Bulgaria's oil exports also amounted to about 300 thousand mt.