Source: Oleoscope (Russia)
Ukraine halved its sunflower oil exports in August to the lowest level since spring 2022 – 199,100 tons – according to an analysis by RIA Novosti of data from the Ukrainian Ministry of Agriculture. This could drive up world market prices for sunflower oil, which would benefit Russia, Argentina and the EU, according to Ekaterina Novikova, associate professor of economic theory at Russia’s Plekhanov University of Economics.
This was the lowest volume of sales to foreign markets since March-April 2022. Outside of this period, the last time less than 200 thousand tons of sunflower oil were exported was in 2013.
The main buyers of sunflower oil from Ukraine are the EU countries, which, according to the latest available data, account for almost 58% of all supplies this year. The decrease in demand from their side is the main reason for the decline in exports.
“Currently, the supply of rapeseed oil in the EU is increasing, which reduces the demand of biodiesel producers for Ukrainian oil,” she explains. On the other hand, the expert continues, the weather in Ukraine is currently dry, meaning that the sunflower harvest is taking place earlier, which reduces the potential harvest volumes for next year and therefore the future production volumes of sunflower oil.
“For this reason, sunflower prices on the world market will rise in the future. Nevertheless, the availability of sunflower oil will remain: In addition to Ukraine, Russia, Argentina and to some extent the EU also export products, but the cost of the products will be higher,” Novikova concluded. Sunflower prices in Ukraine continued to rise last week by an average of 500-800 UAH/ton to 20,000-20,800 UAH/ton for delivery to the factory.
As a reminder, the amount of sunflower processed by Ukrainian factories in August was also the smallest since August 2022 and amounted to about 640,000 tons, which is 37% less than in the previous month. Analysts believe that due to the limited supply of oilseeds, the build-up of processing in the new season could be much slower than usual.
Russia was the world’s largest sunflower oil producer last harvest year with a 31% share, while the EU contributed 17.5% and Argentina 7%.