In 2022-2023 marketing year (MY), the planted area and production of high-oleic sunflower in Ukraine were the lowest in recent years.
According to the analytical agency UkrAgroConsult, in 2023-2024 MY the planted area is expected to increase slightly, but the production figures will remain extremely low.
“Before the war, the processing of high oleic sunflower reached almost 500 thsd tonnes, which is a good result for such a niche segment. Unfortunately, due to the war, Ukraine has lost both the results gained over the years and its share in the global high-oleic oil market,” the analysts stated.
They noted that high oleic oil remains an export-oriented commodity and almost all of it is exported.
The key issues remain the war, instability in the grain corridor and the ban on imports of agricultural products from Ukraine to Eastern Europe, which will affect the market of high-oleic sunflower, the experts emphasized.
However, according to analysts, the main factor limiting the expansion of the area under high-oleic sunflower in Ukraine is the unstable margin for agricultural producers.
“Sometimes low or no premium entails selling high-oleic seeds at the price of conventional raw materials, which does not always cover the cost of production. This leads to the refusal of agricultural producers to grow this type of sunflower or to reduce the area,” UkrAgroConsult emphasized.
The analysts reminded that before the war, the crushers encouraged farmers to grow high oleic sunflower: they offered to enter into forward agreements, provided seeds for growing with the subsequent purchase of raw materials with a premium.
“Starting from 2023-2024 MY, Ukraine will see a gradual resumption of high-oleic sunflower processing and oil refining, but it is still far from reaching the pre-war levels,” UkrAgroConsult summarized.
The Agricultural Ministers of Ukraine and Bulgaria, Mykola Solsky and Kyrylo Vatev, discussed technical issues of Ukrainian agricultural exports to Bulgaria during online talks on Friday.
“The Bulgarian government considers the action plan of Ukraine submitted to the European Commission on the supply of agricultural products acceptable. Bulgaria has its own proposals to the mechanism of licensing certain types of agricultural products proposed by Ukraine. In particular, this concerns sunflower, while Bulgaria has no objections to the export of the other three crops,” the press service of the Ministry of Agrarian Policy and Food of Ukraine reported.
The Bulgarian Ministry of Agriculture and Farming clarified that Vatev familiarized Solsky with the memorandum signed between the Bulgarian government and the initiative committee of farmers, which provides for a ban on the import of sunflower from Ukraine until the end of November.
After this period, a licensing regime for the export of sunflower, wheat, corn and rapeseed will be in place, according to the plan agreed between Ukraine and the European Commission.
Vatev also spoke about the concerns of Bulgarian farmers and processors regarding the imports of refined and unrefined sunflower oil, milk powder, honey, sugar and frozen raspberries from Ukraine.
“It is very important to discuss all the problems affecting our agricultural producers and to look for solutions together,” the Bulgarian minister emphasized.
The ministers agreed to agree on the technical details of the procedure for exporting agricultural products to Bulgaria and discuss their results at the next meeting in the first half of October, the press service of the Ministry of Agrarian Policy reported.
The Bulgarian Ministry of Agriculture added that regular data exchange between the two agricultural agencies will become weekly. It will include the exchange of information on exports and imports of certain agricultural products.
Agrarians in the southern regions of Ukraine have started harvesting sunflower, the market is gradually switching to trading the new sunflower crop, which has both demand and decent prices, which will reach 17-18 thousand UAH/ton in November-December, according to the analytical cooperative “Pusk”, created within the framework of the All-Ukrainian Agrarian Council (AAC).
“The new sunflower harvest is already being traded on FOB and CIF basis, in particular, Italy recently purchased a thousand tons of Ukrainian oilseed at $465/ton. Processors are already announcing prices at $370/ton excluding VAT,” the analysts said.
They expect that in August-September, the purchase prices for sunflower in Ukraine will remain in the range of 14 500-15 000 UAH/ton.
In the near future, Ukraine is expected to have high air temperatures and no precipitation, which will facilitate the harvesting campaign, so the supply of sunflower will grow, experts said.
“If there is no significant precipitation, then in mid-September we can expect the traditional price decrease by 1000-1500 UAH/ton – the price tags will drop to 12-13 thousand UAH/ton under the pressure of harvesting. But in November-December, the range will increase to 17-18 thousand UAH/ton. The seasonal model generally shows an upward trend in prices,” experts predict.
The level of purchase prices for Ukrainian sunflower will support the global growth of prices for vegetable oils on the world market, the UGA believes.
Prices for Ukrainian sunflower rose by 11.5% during the week against the background of the growth of exchange prices for vegetable oils and amounted to 14000-14500 UAH/tonne and will grow further, according to experts of analytical center of the cooperative “PUSK”, created within the framework of the All-Ukrainian Agrarian Rada (AAR).
“Last week, the price of soybean oil on world exchanges jumped up a lot, which caused the physical market, prices for raw materials for production of vegetable oils, including prices for sunflower oil,” the analysts explained.
This led to the fact that the current week began with a price range for sunflower around 14000-14500 UAH/ton, while last week began with prices at 12000-12500 UAH/ton.
“Uniformly, the market is moving from falling to rising. The other day India bought 80 thousand tons of sunflower oil from Ukraine, which increased the prices for vegetable oil on FOB terms by $ 60-70/ton, on CPT terms the oil went up by $100-110/ton. The market has become more active, the sunflower has most likely passed the “price bottom” of this season”, – stressed the analytical department of the cooperative “PUSK”.
Experts reminded that in July plants will begin to process rape, which could lead to a sunflower price subsidence in the second half of July.
Further rise in sunflower prices will be moderate, they will not exceed 15 500 hryvnias/ton, “PUSK” forecasts.
Ukraine in 2022-23 marketing year (MY) increased sunflower exports by 14% and reduced its processing by 83%, producing its lowest volume since 2009-2010 MY, said oil market analyst at APK-Inform Svetlana Kirichok.
“During the season, there was a record and uncontrolled export of sunflower from Ukraine, which occurred against the background of a decline in oil refining and export of sunflower oil due to the limited work of the ports. The main volume of exports (79%) for September-May came to the EU countries, namely Romania and Bulgaria, which at the expense of Ukrainian raw materials substantially loaded their own enterprises and managed to increase the export of sunflower oil,” – she explained.
According to Kirichok, the imposition of unilateral bans on imports of sunflower to the EU has led to the fact that in April the export of Ukrainian oilseeds fell to its lowest level since April 2022, and a very large amount of sunflower was redirected to the domestic market.
The expert predicts that sunflower exports from Ukraine in 2022-23 MY will reach 2 million tons, which will be a historical maximum for the industry.
“According to our estimate, at the beginning of June, the sunflower balances (conditionally for the whole country) were about 1.6 million tons, which is one of the lowest for many years, and even with minimal export volumes they will not be able to provide full work of processing enterprises in June-August,” – she said.
In general, since the beginning of 2022/23 MY in Ukraine was processed about 10.5 million tons of oilseeds, which was one of the lowest rates over the past seven seasons. Until the end of the current season (in June-August) may be processed about 1.2 million tons – this is the minimum for this period over the past 12 seasons, the expert stated.
Kirichok expects an increase in sunflower production in 2023 due to the expansion of cultivated area to 5.5 million hectares, which is 13% more than a year earlier. At the same time, the total supply of oilseeds will decrease by 10% due to the reduction of carry-over stocks and yield potential, which will happen due to the prolonged sowing season and saving by agrarians of material and technical resources, in particular pesticides.
“If sunflower exports will show rates close to those of 2021/22-2022/23 MY, and exports from deep-sea ports will remain unstable, the country is expected to further reduce processing volumes,” summarized the expert.
Kernel Agro-Industrial Group, as of mid-May, has fulfilled 95% of its plans to sow spring crops, allocating 35% of the area for sunflower and 18% for soybeans, the company said on Facebook.
“Agroclimatic features of the current season: a large amount of precipitation in March and April, a high level of subsurface water in some regions and, accordingly, the waterlogging of much of the fields – have significantly adjusted the production program of agricultural enterprises “Kernel”,” the company said in its information.
As reported, the sunflower accounts for 35% of sown area, or 120 thousand hectares, the corn – 24%, or 85 thousand hectares, the soybean – 18%, or 65 thousand hectares.
Moreover, winter wheat accounts for 17%, or 60.4 thousand hectares in the structure of areas under crops. Areas under rape and perennial grasses are traditionally insignificant, the holding said.
It is stated that Kharkiv cluster was able to carry out seeding on 28 thousand hectares, and another 1 thousand hectares were left without treatment because of security reasons, as these lands are located 40 km from the front line – in Kupiansky area. As of May 16, 100% of the planned areas for the season were sown in the cluster.
According to Alexander Zvyagintsev, deputy head of production of the Kharkiv cluster, 35% of the area is planted to winter wheat, 30% to sunflower, 15% to winter rape, 10% to corn, and 10% to soybeans.
Druzhba Nova” cluster team in Sumy region took 177 thousand hectares of arable land for the future harvest, while 7 thousand hectares near the Russian border were left uncultivated.
Druzhba Nova” cluster head for production, Igor Tihonchuk, said that corn and sunflower are already being sown; 20% and 35% of the crop is under crop cultivation correspondingly. Sowing of soybeans, which will take 24% of the area, will be completed by May 25. Sowing of winter wheat will occupy 17% of the area.
According to the holding, because of the oversaturated fields, some early spring technological operations have been canceled, replaced or shifted in time. The shift in timing affected the beginning of the sowing season, which in all regions began in late April, which is two weeks later than the traditional dates.
Kernel Agronomic reported favorable sowing conditions for sunflower and corn, which were sown in parallel to accelerate the pace of the sowing season.
“Most agroclusters have completed corn and sunflower seeding and are completing soybean seeding. This is a heat-loving crop, the conditions for sowing which were not favorable until May 5-6. Despite the vagaries of weather, 80% of areas for the next soybean crop we plan to sow at the optimum time for the crop, “- summed up the agricultural holding.
“Kernel” before the war was the world’s number one producer of sunflower oil (about 7% of world production) and its export (about 12%), as well as the biggest producer and seller of bottled sunflower oil in Ukraine. The company was also engaged in cultivation of other agricultural products and their sale.
In FY2022 (July-2021 – June-2022), the holding posted a net loss of $41 mln versus $506 mln net profit in the previous FY, while its revenue decreased by 5% to $5.332 bln and EBITDA decreased by 3.7 times to $220 mln.
