Features of the Russian market of sunflower seed and its by-products in 2017/18 MY




As of the end of November 2017, Russia harvested sunflower seed throughout nearly 80% of the planned areas, or 6 mln ha. The harvested volumes reached 9.3 mln tonnes of sunflower seed. In terms of keeping of the average yield figures, in the current season Russia will manage to show a new record of crop harvesting.

The first quarter of 2017/18 MY already completed. So, the current season for the Russian market of sunflower seed and its by-products has both similarity with all previous ones, as well as some differences.  Traditionally, since the beginning of the season there was observed some growing of demand rates on the market of the oilseed and its by-products. Increasing of the number of supplies of commodity items on the market (sunflower seed, sunflower oil, and sunflower meal/cake) contributed to further decreasing of prices. As for the major features of the season, then since the beginning of 2017/18 MY Russia faced some lagging of the harvesting campaign rates. The fact became one of the reasons for reduction of qualitative indices and production volumes of the oilseed (compared with the forecasted volumes). Hereinafter, we consider the situation on the market in more details.

On May 19, 2017, more than 500 companies signed a Charter in the sphere of agricultural products turnover. It means the refusal of cooperation with companies-intermediaries, which are the major abusive taxpayers. Thus, restructuring of the market took several months, and since the start of 2017/18 MY almost all oilseed processing enterprises started purchasing sunflower seed at the prices, exclusive of VAT.

It should be noted that buyers started purchasing the oilseed of the harvest-2017 significantly later than expected. The situation developed due to adverse weather conditions at the time of sunflower seed ripening (cold summer), as a result the terms of the harvesting campaign shifted for 15-30 days. Traditionally, agricultural producers from southern regions of the country (much earlier than their colleagues from the Central and Volga Federal Districts) were the first ones to start the harvesting works. Therefore, they did not make complaints about the qualitative indices of sunflower seed. In turn, the harvesting campaign in the Central and Volga Districts started in early October only, which coincided with the traditional rainy period. In October 2017, many producers had to postpone harvesting works for at least 7 days, due to steady rains and inability to run machinery in the field. The situation led to selling of the oilseed with low qualitative indices, namely overstated humidity indices (17-25%), and in some cases, and increased acid value (5-8 KOH). Also, it should be noted that in the current season many agrarians reported about decreasing of the yield indices by 0.1-0.3 t/ha compared with last year.


Oblasts with the most significant fall of sunflower seed yield in 2017/18 MY, as of November 23



Sunflower areas, `000 ha

Sunflower share, %

Yield, t/ha




2017 to 2016


Belgorod oblast







Voronezh oblast







Penza oblast







Lipetsk oblast







Rostov oblast














Source: Ministry of Agriculture of the Russian Federation



According to market participants, the reporting factors can both place pressure on the prices and stimulate oilseed processors to increase the bid prices.



Price cutting factors

Price improvement factors

Reduction of the oilseed qualitative indices: humidity and acid value

Sunflower seed prices decrease by 1.5% in terms of growing of the acid value by 1 KOH

Plans of oilseed processing companies to raise additional large-scale batches of the high-quality oilseed (moisture content below 7%) to load the raw materials storehouses

Increasing of the number of supplies of the oilseed with low-quality figures

Low sale rates of high-quality sunflower seed by agricultural producers

Reduction of loading to sunflower seed processing capacities at the enterprises, which already completely filled their storehouses with oilseed meal/cake

Performance of obligations under previously concluded large-scale contracts for sunflower oil shipment


However, in the short term outlook the plants will have a high interest in purchasing of the oilseed – in the current season, the contracts for sunflower oil shipment are made for the next month, and the plants still have to form their raw materials bases.

Also, increasing oilseed processing capacities by more than 450 thsd tonnes per year supported the high demand for sunflower seed. After modernization, since September 2017 the processing capacities of Sorochinsk Oil Extraction Plant (plant of NMGK Group) reached 1600 tonnes/day. At the end of the same month, Majachny Oil Extraction Plant (Sigma Group of companies) increased its capacities to 1200 tonnes/day. In the beginning of November, the agricultural holding Kurgansemena launched a new oilseed processing plant. The plant processing capacities total 150 tonnes/day.

Thus, the growth of oilseed processing capacities will contribute to increasing of competition rates in sunflower seed purchases. At the same time, despite rather active interest in raw materials purchasing, since the beginning of the current MY the demand for sunflower by-products was estimated as rather low.


Features in the market segment of sunflower oil



Increasing of the number of sunflower oil supplies and gradual decreasing of its prices

Low bid prices since the beginning of the season on the domestic and export markets, which were well below the offer prices

Conclusion of the contracts for delivery for a month forward (in some cases for 1.5-2 months)

High interest in oil purchases at the minimum bid prices or similar ones on the domestic market

Increasing of the maximum offer prices (which were mainly declarative ones) for oil ending stocks

Extremely low demand of exporters for the product (due to unattractive offer prices), due to the fact that the bid prices were not announced yet. At the same time, in September-October of 2017 the export volumes of sunflower oil totaled 292.8 thsd tonnes, up 39% compared with the same period last season

Late start of oilseed processing enterprises with raw materials of the harvest-2017 (mid-September and mid-October, depending on the location)


Features in the market segment of sunflower meal/cake



Deficit of vehicles and railway transport for the supply of oilseed meal/cake, as almost all machinery worked with grain transportation

Purchases were made by batches, which usually did not exceed machine rates

Difficulties with meal shipments due to a large number of refusals at receipt of confirmation of the application GU-12 (cargo transportation by railway transport)

Reduction of the purchasing prices due to a large number of supplies and worsening of sunflower meal/cake qualitative indicators

Reduction of offer prices as the market was overloaded with sunflower meal/cake

On the export market, the demand for sunflower meal was rather low, due to the sufficient number of its supply in the world. So, in September-October of 2017/18 MY Russia exported 114 thsd tonnes of the product, down almost 40% compared with the same period last season

Product proficit

Mainly local sales of the products

Companies sold sunflower meal mainly on the domestic market, due to unattractive bid prices for exports

Reduction of protein content in sunflower meal/cake by 2-4% due to the fact that agrarians provided mainly shrinked kernels for processing

The domestic market demonstrated low-activity interest in purchases of the products


In conclusion, it should be noted that the season-2017/18 for participants of the market of sunflower seed and its by-products will become no less difficult than the previous one: low qualitative indices of the oilseed, low-active demand, and prices imbalance for sunflower oil, difficulties with sales of the oilseed meal/cake. As for the positive features, we should highlight the possibility of reaching a record production of sunflower seed and expansion of the geography of sunflower oil supplies, in particular to India.

In late November 2017, India significantly increased the import duties on vegetable oils. In particular, crude sunflower oil – from 12.5% to 25% (at 104.3 USD/t). It should be noted that Ukraine is the main supplier of sunflower oil to India. Discount of prices for Ukrainian and Russian sunflower oil totals nearly 15-20 USD/t.


Anna Skotar, APK-Inform Agency