1. Weekly News

Global

Global Vegetable Oil Production and Consumption Projections for MY 2024/25

The Union for the Promotion of Oil and Protein Plants (UFOP) projects that global vegetable oil production will reach 224.2 million metric tons (mmt) in the 2024/25 marketing year (MY), an increase of 2.7 mmt compared to the 2023/24 season. Oil consumption is estimated at 221.7 mmt, reflecting a 5.3 mmt increase from the previous season. The estimated ending stock is 29.6 mmt, falling below the long-term average. However, sunflower oil production in MY 2024/25 is estimated to decrease by 2 mmt from MY 2023/24 to 20.6 mmt due to production challenges in Ukraine, marking the lowest output since 2021/22.

India

India Considers Raising Vegetable Oil Import Tax

Due to low oilseed prices, India is considering raising vegetable oil import taxes to support local farmers. Expected to be announced in the coming weeks, the potential move may reduce overseas purchases of palm, soy, and sunflower oils. According to unnamed government officials, a proposal from the Ministry of Agriculture and Farmers Welfare (MAFW) is under consideration, and the final decision will be made by the Department of Revenue (DOR), which falls under India's Ministry of Finance.

Russia and India

Russia’s Sunflower Oil Exports to India Surged 250% YoY in H1- 2024

In the first half of 2024 (H1-2024), Russia’s sunflower oil exports to India surged by 250% year-on-year (YoY), reaching 1 mmt and valued at USD 962.2 million. Russia has emerged as India’s leading sunflower oil supplier, followed by Ukraine and Romania. In addition, according to the Ministry of Agriculture of the Russian Federation (MARF), Russia’s sunflower oil export duty will remain at zero in Sep-24, and will likely maintain competitiveness.

Ukraine

Ukraine Lost Sunflower Oil Market Share in Tanzania

Ukraine, previously the leading supplier of sunflower oil to Tanzania with annual exports of 11 to 12 mmt, has seen a dramatic decline, now supplying almost none. This decline can be attributed to Tanzania imposing a 10% duty on imported crude sunflower oil and a 25% duty on refined oil. As a result, many companies are opting to import crude oil and establish local production, reducing the need for refined sunflower oil imports from Ukraine

Ukraine’s Sunflower Oil Exports Dropped by 45% MoM in Aug-24

Ukraine’s sunflower oil exports fell by 45% month-on-month (MoM) to 200 thousand metric tons (mt) in Aug-24, primarily due to a shortage of raw materials limiting sunflower processing. From Sep-23 to Aug-24, cumulative exports reached 6.23 mmt, with the European Union (EU) being the largest market, receiving a record 3.7 mmt of sunflower oil. No significant MoM increase is expected in Sep-24 due to limited sunflower supply from both old and new crops, despite the earlier-than-usual start of harvesting in Aug-24. Most processing plants plan to delay operations until Sep-24, extending repair and maintenance work due to insufficient raw material availability.

2. Weekly Pricing

Weekly Sunflower Oil Pricing Top Producers (USD/kg)

Yearly Change in Sunflower Oil Pricing Top Producers (W35 2023 to W35 2024)

Russia

In W35, Russia's sunflower oil prices increased by 1.09% week-on-week (WoW) to USD 0.93 per kilogram (kg). The MoM remained unchanged, and the YoY price increased by 12.05%. The price increase is due to rising sunflower seed costs and expectations of a global supply decline for MY 2024/25 due to production challenges. Russia is projected to produce 17.25 mmt of sunflower seed in 2024, with sunflower oil exports forecasted at 4.8 mmt. The market has shown a positive trend as previously accumulated stockpiles of sunflower oil have been depleted.

Ukraine

Sunflower oil prices in Ukraine rose by 1.06% WoW to USD 0.95/kg in W35, driven by production challenges due to heat and drought. Sunflower seed prices in Ukraine remained between USD 490/mt and USD 500/mt, including value-added tax (VAT) with delivery to processing plants. Producers have been postponing the sale of oilseeds, limiting market supply and preventing price drops. Current sunflower prices make processing economically unviable, raising concerns about potential short supply and further price increases.

Argentina

In W35, Argentina's sunflower oil prices increased by 1.08% WoW to USD 0.94/kg compared to USD 0.93/kg in W34. The MoM remained unchanged, and the YoY price increased by 5.62%. The price increase is due to lower production estimates for the 2024/25 season and strong demand from the biofuel sector. Additionally, recent rainfall has delayed the country’s sunflower planting campaign, with the cultivation area for this season projected at 1.85 million hectares (ha).

3.Actionable Recommendations

Strengthen Sunflower Oil Export Strategy

Russia should leverage the recent growth in sunflower oil exports, particularly to India, by maintaining favorable export conditions, such as zero duties. The government should also support sunflower seed producers to ensure they can meet increasing global demand. Strengthening partnerships with key importers will help Russia solidify its position as a leading sunflower oil exporter in the face of potential global supply shortages.

Address Production Challenges and Stabilize Exports

Ukrainian authorities should work closely with local sunflower oil producers to address raw material shortages impacting exports. Investments in infrastructure to improve storage, logistics, and processing capabilities will be essential in ensuring steady production. Supporting farmers in increasing sunflower output and enhancing supply chain efficiency will help maintain Ukraine’s role as a critical supplier, particularly to markets like the EU.

Mitigate Sunflower Planting Delays

Argentina’s agricultural sector should support farmers in managing delays in sunflower planting caused by unfavorable weather conditions. Providing access to better weather forecasting, technical assistance, and financial support will help farmers minimize risks and ensure a stable crop yield. Coordinating efforts with the biofuel industry will also be important to balance growing demand with potential production challenges.

Sources: Tridge, AgroPortal.ua, Theedgemarkets, Milknews, Interfax, AgroPortal.ua, APK-Inform, Milknews