High-oleic market - from niche to market segment





Not long ago, the high-oleic market was little known for average consumers, but the interest in good and healthy foods contributed to the fact that high-oleic products (high-oleic sunflower seed and oil) became widely known not only in the world, but also in Ukraine. Despite the fact that the growth rates of the HO market are not as intense as in the fat-and-oil industry at large, it really demonstrates the growth of production, consumption and exports. So, the planted areas under high-oleic sunflower seed increased from 120 thsd ha in 2013/14 MY, to 200 thsd ha in the current season. At the same time, in 2016/17 MY Ukraine reached the maximum rate at 260 thsd ha. In the season-2013/14, the production and exports volumes totaled 50 thsd tonnes and 46 thsd tonnes respectively, but in 2016/17 MY the figures reached 232 thsd tonnes (production) and 224 thsd tonnes (exports). Italy, the United Kingdom and the Netherlands became the TOP-3 countries-importers of the Ukrainian product.

Also, the growing interest of importers and consumers of high-oleic oil in Europe is another factor stimulating the further development of the certain market segment in Ukraine.

Nevertheless, market participants are interested in all prospects of the market segment and its potential for development. In their turn, the companies which operate with high-oleic sunflower seed and oil noted that the presence of price premium towards traditional sunflower seed and sunflower oil, has a great potential for further increasing of the planted areas under high-oleic sunflower, production and export volumes of high-oleic oil, etc.

According to the global experience, successful and proper development of any industry is the guarantee of profitability of each market participant, from producer to final consumer.

On September 18, over 110 delegates, representing nearly 90 companies, industry and scientific organizations of the oilseed market from 11 countries, gathered together to discuss the achievements and prospects of the high-oleic segment within frames of the third international conference "High-oleic market: from niche to market segment".

Syngenta became the General partner of the event.

Almost all types of companies from the agro-industrial complex showed their interest in the event, from sunflower seed producers (including high-oleic sunflower) to HO sunflower processors and buyers of HO oils.




Traditionally, the conference began with a report by the General Director of the association Ukroliyaprom, Stepan Kapshuk, who stressed that Ukraine continues keeping the leading positions in the world in sunflower oil production and exports, as well as sunflower meal. According to him, in 2016/17 MY the production of sunflower oil in Ukraine reached a record level at 6.3 mln tonnes (including oil mills). At the same time, the growth of production reached 126%, and exports - 130%, compared with 2015/16 MY. In the current season, the growth of production of refined sunflower oil exceeded 130%.

Also, S.Kapshuk noted that the main trends and directions which were specific for the Ukrainian market of sunflower oil in 2016/17 MY, will remain relevant in a new season. Continuation of the growth rates in production and supply of raw materials became the major feature of the Ukrainian oilseed market, despite the observed decline in prices and growth of consumption. At the same time, not only the global market provides its certain impact on development of the market segment (continuation of the global crisis of international economics, decline in veg oil prices, in particular rather considerable cheapening of sunflower oil, which is significantly undervalued in the current season), but also the domestic problems of Ukraine, explained the expert.

Also, he added that 2017/18 MY still demonstrates the complete dependence of Ukrainian raw commodity markets not only on the global market situation and weather conditions, but also on fluctuations on the foreign currency market in Ukraine. High purchasing prices for sunflower seed (almost stable – not less than 400 USD/t) as one of the unique features of the Ukrainian oilseed market, despite some reduction of export prices for sunflower oil, caused by high competition rates among oil crushing plants on the domestic market.

As for the prospects of sunflower seed production in Ukraine in 2017/18 MY, the expert noted that according to expectations of the association Ukroliyaprom, the harvest volumes will not lower below the previous season level, and possibly even exceed it. However, the situation will depend on weather conditions, which are extremely volatile. Rather late dates of the harvesting campaign of sunflower seed in 2017, as well as low yield indices, also confirm the concerns, specified S.Kapshuk.


Following information about the main trends on the market of traditional sunflower and sunflower oil, the conference participants brought attention to the high-oleic segment. The Business Development Director at UKROLIYA LLC, Yuriy Shevchenko reported that in 2017/18 MY, the general harvest of high-oleic sunflower seed in Ukraine will decline by 27% compared with the last season level, to 490 thsd tonnes, due to reduction of the planted areas under the oilseed by 23% to 200 thsd ha, as well as the yield indices - down 7%, to 2.42 t/ha. The expert called a low premium for the oilseed last season as the main reason for decreasing of the planted areas under high-oleic sunflower seed. At the same time, in 2017/18 MY the premium for high-oleic sunflower oil will reach nearly 120-130 USD/t, and in terms of rather high demand, it can even reach 140 USD/t. Taking into account segregation processes, in the season-2017/18 processing volumes of sunflower seed in high-oleic oil will total nearly 400 thsd tonnes, down 23% compared with the results of 2016/17 MY, the expert added. The forecast of the production and exports of sunflower oil with high oleic acid content in 2017/18 MY totals 180 thsd tonnes, against a record level of 226 thsd tonnes last season. At the same time, the expert forecasted that in the current season the domestic consumption of high-oleic sunflower oil in Ukraine will grow to 4.5 thsd tonnes, up 2 times compared with the average figures for three recent years.

Also, Y.Shevchenko said that to date, the company UKROLIYA LLC takes the 10th position in the rating of Ukrainian companies-exporters of high-oleic sunflower oil with a share of 2.2% in the general export structure of the product, and the 3rd position in the exports of refined high-oleic sunflower oil with a share of 20%.


The oilseed market analyst at APK-Inform Agency, Julia Ivanitskaya reported about the prospects of Ukrainian high-oleic oil on the global market. According to APK-Inform figures, in 2017/18 MY the exports of high-oleic sunflower oil from Ukraine will reduce by 20% compared with the previous season, to 180 thsd tonnes. Reduction in the general production and processing volumes of high-oleic sunflower seed in the season-2017/18 will influence at the expected decline in the veg oil exports, the expert specified. Also, J.Ivanitskaya noted that in 2016/17 MY Ukraine demonstrated a record in the exports of high-oleic sunflower oil, which was estimated at 226 thsd tonnes, due to presence of sufficient raw material base and high demand for high-oleic oil. The exports of Ukrainian refined high-oleic sunflower oil also continued growing. So, if in 2014/15 MY its share in the general shipments of sunflower oil from Ukraine totaled 1.7% only, then in 2016/17 MY the figures reached 5.1% (more than 10 thsd tonnes), the expert added. The EU remained the main market (73% of the shipments in 2016/17 MY), but the Asian destination is also very prospective. In 2016/17 MY, the TOP-3 of countries-importers of Ukrainian high-oleic sunflower oil, which purchased 55% of the general shipments of the product, included Spain, Italy and the United Kingdom. Iran took the 4th position in the rating, and became a new market for Ukraine, noted J.Ivanitskaya.

Also, she said that in 2016/17 MY, 4 companies provided nearly 70% of the general exports of high-oleic sunflower oil from Ukraine - ViOil, ADM Ukraine, Allseeds Black Sea and Bunge. At the same time, Ukraine realized 73% of the product deliveries on FOB basis, and the Commercial Sea Port of Chornomorsk provided major shipments of the product (57%).

The Head on development of business solutions for agricultural processing in the CIS countries at Syngenta, Sergei Tymoshenko reported about the prospects of high-oleic market in the season-2017/18. In 2017/18 MY, companies-producers of high-oleic sunflower seed and sunflower oil in Ukraine can rely on a fairly good premium, and their products will be increasingly in demand on the global market. In particular, Ukrainian producers of high-oleic sunflower can expect for a premium at nearly 40 USD/t, which is a significant motivation in favor of the oilseed growing, said the expert. Also, he noted that in terms of the current decline in production volumes of high-oleic sunflower oil in several major countries-producers, in 2017/18 MY the global supply deficit of high-oleic sunflower oil will reach nearly 300 thsd tonnes, which will provide a fairly high premium for companies-producers.