Business news from Ukraine

SUNFLOWER PRICES IN UKRAINE STIMULATE RESTART OF WORK OF PROCESSING PLANTS

Most oil extraction plants in Ukraine stopped working due to Russia’s military aggression against Ukraine, but in April-May, the plants in the western, central and southern regions of the country began to resume operations due to an increase in sunflower processing margins up to $200/tonne.
“Currently, processors are actively buying sunflower against the backdrop of disappointing production forecasts for the next season… Some plants provide processing services at a price of $80-150/tonne, while others buy sunflower at UAH 15,000-16,500/tonne, receiving a processing margin of up to $200/tonne,” according to the website of the electronic grain exchange GrainTrade.
According to its data, the resumption of the work of Ukrainian oil extraction plants in the western, central and even southern regions of the country is caused by a sharp reduction in the price of sunflower due to difficulties with its export from Ukraine due to the blockade of the country’s seaports by Russian ships.
GrainTrade notes that the price of sunflower will continue to grow, as it is under pressure from its significant stocks from producers and processors, as well as difficulties with the export of oil products – sunflower meal and cake.
“Now it is difficult for processors to sell meal and cake to European consumers due to the increase in logistics costs and falling prices in the EU amid an increase in the supply of Ukrainian products. At the same time, producers are in no hurry to sell sunflower seeds at low prices, expecting an increase in production costs in the new season,” the grain exchange said.

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US FARMERS PLAN TO SIGNIFICANTLY INCREASE SUNFLOWER PLANTINGS DUE TO SUPPLY DISRUPTIONS

American farmers plan to significantly increase sunflower crops this year due to supply disruptions amid Russia’s military invasion of Ukraine, Bloomberg writes.
At the same time, a jump in agricultural prices to record levels for many years could increase motivation among farmers to plant more, said John Sandbakken, executive director of the National Sunflower Association. The USDA tentatively forecasts a 10% increase in sunflower acreage this year.
“I’m sure the increase will be more, almost 20%,” Sandbakken said in a telephone interview with Bloomberg.
Sunflower is used in a very wide range of products, from potato chips and sunflower oil for frying to bird food and shampoos. However, this year this commodity may be in short supply, as Ukrainian farmers are forced to reduce acreage and exports due to hostilities in the country. Ukraine is considered one of the world’s largest sunflower exporters.
Meanwhile, last year’s devastating drought in the northern Great Plains of the United States plays into the hands of American farmers this year, as it left excess nitrogen in the ground, which reduces fertilizer costs, Bloomberg notes.
The price of new crop sunflower in the US is about $34 per 100 pounds (about 45 kg), higher than the previous record price of $30.5 reached in 2008. Old crop sunflower prices are also nearing their highest since 2011, Sandbakken notes.

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UKRAINE EXPORTS 88% OF SUNFLOWER OIL VOLUME SPECIFIED IN MEMORANDUM

Ukraine as of July 1, 2020/2021 marketing year (MY, September-August) exported 4.75 million tonnes of sunflower oil, which is 88.2% of the ceiling volume agreed by the Economy Ministry and Ukroliyaprom association, the association said on the website on Tuesday.
Ukroliyaprom said the highest export volumes of sunflower oil are 5.38 million tonnes in 2020/2021 MY. Thus, in July-August of the current MY, exporters can supply another 630,000 tonnes of this product to foreign markets.

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KERNEL CUTS SUNFLOWER OIL SALES BY 2%

Kernel, one of the largest Ukrainian agricultural groups, in the third quarter of FY2020 (started in July 2019) cut sunflower oil sales by 2% year-over-year, to 380,900 tonnes.
According to an operations update posted on the website of the company, the share of bottled oil of total sales in January-March 2020 was 10% (39,000 tonnes).
Oilseeds crushing in Q3 FY2020 grew by 4%, to 940,650 tonnes, running crushing plants at full capacity.
The holding said that grain exports from Ukraine in January-March 2020 grew by 41%, to 2.15 million, including 35% of grain produced by company’s farming division, and the remaining was originated from external suppliers.
Export terminal throughput volumes in Ukraine reached 1.9 million tonnes in the reporting period, up 66% year-over-year, on the back of strong grain export volumes from Ukraine and increased contribution from new TransGrainTerminal. Grain and oilseeds received in inland silos fell by 65%, to 124,540 tonnes.
Kernel cut sunflower sails by 12% year-over-year, to 1 million tonnes. Sunflower crushing grew by 115, to 2.52 million tonnes. The company is progressing on the guidance to process 3.3 million tonnes of sunflower seeds for the whole FY2020.
In 9M of FY2020 grain exports from Ukraine grew by 30%, to 6 million tonnes.
According to the document, export terminal throughput volumes in Ukraine in 9M of FY2020 grew by 41%, to 4.82 million tonnes. Grain and oilseeds received in inland silos fell by 2%, to 4.12 million tonnes.

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US CORTEVA AGRISCIENCE HAS 21% OF UKRAINIAN CORN SEED MARKET AND 16% OF SUNFLOWER MARKET

Corteva Agriscience, the agricultural division of DowDuPont (the United States), a large global seed producer, occupied 21% of the Ukrainian corn seed market and 16% of the sunflower seed market (the seeds of the two brands – Pioneer and Brevant).
“According to the calculations of the Kleffmann Group, which are based on a survey of farmers in 2018, our market share of the combined portfolio of Corteva Agriscience [the seeds of two brands: Pioneer and Brevant] for corn is 21%, and for sunflower is 16%. The crop protection agents market’s share is 7% However, based on these data, one should take into account the error in the calculations, which can reach almost 3 percentage points,” Head of business in Eastern Europe Corteva Agriscience Serhiy Kharin said.
According to him, in the plans for the next season is to get at least 1% growth in the seed market share for each of the crops.
Corteva Agriscience is an integrated company with the following segments: seeds, crop protection agents and digital technologies. It was created by combining DuPont Pioneer, DuPont Crop Protection, and Dow AgroScience.
Corteva Agriscience includes Pioneer Nasinnia Ukraine LLC, a commercial office located in Kyiv (it provides sales of Pioneer brand seeds) and Stasi Nasinnia LLC, a seed production plant that has been operating since 2013. Over five years, investments in the production complex amounted to more than $56 million. The plant reached its full capacity in 2017: for the production of corn seeds – 500,000 seeds per year, for the production of sunflower seeds – 250,000 seeds per year.
Corteva Agriscience plans to become an independent company which shares will be quoted on an exchange after the previously announced separation process is completed by June 2019.

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UKRAINE BOOSTS SUNFLOWER STOCKS, CUTS SOYBEAN, RAPESEED STOCKS AS OF EARLY DEC 2018

Sunflower stocks in Ukraine as of December 1, 2018 totaled 7.778 million tonnes, which is 15.4% more than a year ago, the UkrAgroConsult analytical agency has reported, referring to the State Statistics Service of Ukraine.
According to a posting on the website of the agency, as of December 1, 2018, crushing enterprises cut soybean stocks by 0.8%, to 1.128 million year-over-year.
Rapeseed stocks as of December 1, 218 were 14.1% lower than a year ago, being 199,200 tonnes.

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