Ukrainian Sunflower Oil exports is a hostage of the grain corridor

UkrAgroConsult

Article author:

Svitlana Kupreeva

Oilseed Market Analyst

The SFO prices, starting from December 2022 tends to decrease being even lower than Soybean oil prices.

Total number of mid-size and large crushers in Ukraine – 118 factories, roughly 20% of them do not operate due to damages and military risks.

 In the first half of 2022/23 (Sept.2022-Feb.2023), Ukraine shipped abroad 69% and 63% of  sunflower seed (SFS) and  the sunflower oil (SFO) export potential correspondingly.

However, in Late February – Early March uncertainty of the grain corridor prolongation has once again practically paralyzed making SFO exports contracts. This may slow considerably the SFS crushing and decrease the crushing to minimal levels.

Besides the uncertainties of the corridor prolongation, Ukraine SFS crushing rates are affected by growing exports of SFS and other oilseeds. The crushers has already lobbied more strict SFS export regulation.

India and China demand is likely to recover for key veg oil (palm oil, soybean, SFO). In the 2022/23 season soybean oil imports to India decreased by 25%.

War in Ukraine promote SFO flows changes:

• competition between Ukraine and russia intensified in China and India. Though Ukraine keeps the top SFO supplier position, russia increases exports to these countries;
• SFO exports from Bulgaria, Romania, Turkey, Argentina also increase in 2022/23.

Early start of spring plantings, oil crops remain the most profitable crops.

• the 2023 SFS is expected at 12.9 M t due to SFS area expansion up to 5.65 M has, with an average yield over the last three seasons of 2.31 tons/ha;

Despite all the difficulties and peculiarities of the current season, the potential of the Ukrainian oil market can be fully realized.

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Tags: Ukraine, India, Russia, supply and demand balance, China, Argentina, sunflower oil, Black Sea grain corridor, Bulgaria, sunflower, Turkey, export, soybean oil, Romania, prices