Ukraine is currently exporting larger quantities of sunflower seed to compensate for reduced crush processing of sunflower seed due to closures of crushing facilities amid the Russia-Ukraine war. According to the United States Department of Agriculture (USDA), the Ukrainian sunflower seed export forecast for the 2021/22 marketing year (MY) (Sept ’21-Aug ’22) is expected to rise by 650,000 MT to 1 million MT. This is a significant rise compared to Ukrainian seed exports in previous years, up by 423% year-on-year (y-o-y). The EU is expected to receive the bulk of this increase.
On the other hand, Ukrainian sunflower oil exports have been revised downwards by 22% y-o-y to 4 million MT for the 2021/22 MY due to the disruptions to crush facilities. This has presented an opportunity for other sunflower oil exporters to benefit from a larger share of the sunflower oil export market. In particular, Turkey’s sunflower oil exports are set to increase by 13.5% y-o-y to 725,000 MT for the 2021/22 MY.
The average Mintec Benchmark Prices (MBP) for Ukrainian sunflower seed declined by 15.9% month-on-month (m-o-m) and by 27.4% y-o-y in June to USD 432/MT in line with reduced domestic crushing demand. Also, the MBP for Ukrainian sunflower oil was down by 7.3% m-o-m but remained up by 34.9% y-o-y in June at USD 1,600/MT. This decline was due to improved global supply of alternative oils following Indonesia revoking its palm oil ban on the 23rd of May. However, Ukrainian sunflower seed output for the upcoming 2022/23 MY (Sept ’22-Aug ’23), is projected to fall to its lowest level in ten years to 9.5m tonnes. This represents a decline of 29.5% from the previous ten-year average and could pose an upside risk to domestic sunflower oil prices.
