APK-Inform sees two scenarios for Ukrainian oilseed market




Oilseed market is one of the key segments of Ukrainian agricultural sector. Ukraine is the leading producer and exporter of sunflower oil in the world. However, Russia’s invasion of Ukraine with ongoing military activity in the country may change the situation drastically. According to the current data, Ukraine exported only about 747 thsd tonnes of sunflower oil since the beginning of the war (March-June 2022), down 53% compared to the same period of the last year.

About 64% of the overall shipments went to the EU member states, which increased import of Ukrainian sunflower oil by 18% y/y over the reporting period.

At the same time, the exports to remote countries was limited. India, that used to be one of the leading buyers of Ukrainian sunflower oil before the war, imported only 9% of the total volume since the beginning of the war due to severe logistical problems, as the main Ukrainian seaports were blocked. Thus, unblocking of ports is one of the key issues of agricultural market of Ukraine, along with development of capacities of exciting export routes.

During a meeting in Istanbul on July 13, the delegations from Ukraine, Russia, Turkey and the UN reached some progress as to the sea export from Ukraine. After that, the UN confirmed that the countries were aimed to sign the agreement in the nearest future. However, the market remains pessimistic on unblocking of the ports or their long-lasting operating if the work to be resumed.

Taking into account all conditions, APK-Inform sees two possible scenarios for Ukrainian oilseed market. Optimistic one is under the condition of unblocking of ports, and pessimistic – if ports remained blocked or their further functioning after unblocking would be risky.