APK-Inform Agency continued the tradition of holding of the annual conference events in the countries-importers of major types of agricultural products, and in June 2018 organized the international event Sunflower Oil & Meal Trade Conference (China, Shanghai). During the sessional day, nearly 200 delegates, representing more than 120 companies and industry organizations from 14 countries, discussed the challenges and prospects of the global trade of sunflower oil and meal, as well as the capacities to enlarge the product deliveries from countries of the Black Sea region to China.
As a reminded, it was not the first such conference of our Agency in China. In October 2015, we already held the International Sunflower Oil Symposium in Shanghai, which became the first event on the market segment in Asia. To date, China is the second only to India global net importer of sunflower oil, and since late 2017 Ukraine started supplying sunflower meal on the Chinese market.
The following companies became the sponsors of the Shanghai conference-2018: Group of companies EFKO (Exclusive sponsor), Cotecna (Sponsor of Quality), Myande, Mimier Trade, and Oliyar. The company Wilmar became the Sponsor of gala dinner. Also, the company AgroIndustria KZ (Kazakhstan) provided its support to the event. In addition, the delegation of nearly 30 representatives of Kazakh companies-producers and exporters of vegetable oils and oilseeds visited the conference, as well as the management of the association Fat-and-Oil Union of Kazakhstan.
Except for the sessional part on June 27, the agenda included two excursion days, which was traditional for overseas events of APK-Inform. On June 26, there was visiting of the company Wilmar's plant of vegetable oil (sunflower oil) refining in Shanghai, and on June 28 the participants visited the plant for vegetable oils production and refining at the engineering center of Myande in Yangzhou and Taizhou cities. The guests highly appreciated the agenda and level of organization of the excursions, where foreign participants received the useful and interesting experience.
The first session of the conference focused on the global and Chinese markets of sunflower oil. For 10 recent years, the global production of sunflower oil increased by more than 8 mln tonnes. So, if in 2007/08 MY the figures totaled 10.2 mln tonnes, then in the current season the volumes can reach nearly 18.4 mln tonnes, declared the Marketing Director at APK-Inform Media Group, Svitlana Synkovska during her presentation at the international conference. In turn, for 10 recent years the global imports of sunflower oil increased in 3 times — from 2.8 mln tonnes in 2007/08 MY, to 8.1 mln tonnes forecasted for the current season. Also, S.Synkovska said that in 2017/18 MY, India (24% of the general volumes), the EU (18%), China (9%), Egypt (7%) and Iraq (also 7%) will form the TOP-5 of the global buyers of the product.
As for China, the domestic consumption of vegetable oils in the country continues steadily growing, and in 2017/18 MY the general volume will reach nearly 31.6 mln tonnes, reported the Vice President of Wilmar, Tu Changming. In particular, in the current season the consumption of soybean oil in China will total nearly 15.8 mln tonnes. In turn, the consumption of rapeseed and palm oils will reach 5.6 mln tonnes and 4.8 mln tonnes respectively, as well as corn and sunflower oils — 1.2 mln tonnes and 850 thsd tonnes respectively, said the speaker. As for cottonseed oil, the expert estimated its consumption in the current season at nearly 870 thsd tonnes, up 3% compared with last season.
The presentation by the marketing guru, brand manager on sunflower oil at Arawana, Chen Saohong, was the most emotional within the conference. He reported about how the brand became the leader on the sunflower oil market in China, its advertising campaigns, secrets of the successful branding, and features of sunflower oil acceptance by Chinese consumers. His speech was accompanied by the video of most notable commercials of the brand, and caused a great interest among the audience of the event.
In the second session of the conference, international experts spoke about the Black Sea market of sunflower oil and meal. During her report the Head of the analytical department at Marcopolo Commodities SA, Olena Neroba, noted that Ukraine is the absolute leader of the global production and exports of sunflower oil. To date, the country produces more than one third of the global volumes of the commodity. Also, it should be noted that Ukraine provides more than 56% of the global exports of sunflower oil. Thus, there is a high probability that one will purchase a bottle of sunflower oil of Ukrainian origin in the supermarket, said O.Neroba.
India, the EU, China, Iran, Iraq, Malaysia and several other countries are the key buyers of Ukrainian sunflower oil. At the same time, to date the country exports almost 90% of the product in the crude form. As for the new season-2018/19, Ukraine will increase sunflower oil production by 14.5%, to 6.6 mln tonnes, as opposed to 5.76 mln tonnes in the current season. Therefore, the exports will rise to 5.8 mln tonnes, against 5.3 mln tonnes.
In terms of the rising supply of sunflower meal to China in 2018, the reporting topic became one of the key messages of the event from both speakers and on the sidelines of the conference. In September-May of 2017/18 MY, China took the 8th position among countries-importers of Ukrainian sunflower meal. Due to its large-capacity market, in the long term China will increase its share in the product purchasing — importers estimated the capacity of the Chinese market of sunflower meal at 1 mln tonnes. It is worth noting that China imports sunflower meal only, and does not show demand for cake at all. At the same time, the supplies to China exceeded the volumes and growth rates on such traditional markets as Spain, the United Kingdom, Thailand, Vietnam, Israel, Egypt, etc.
In 2017/18 MY, the global imports of sunflower meal can reach nearly 7-7.1 mln tonnes. In the current season, the EU (53% of the general volumes), Turkey (13%), Belarus (9%), Morocco (5%), Israel (4%), India (4%) and others were the key buyers of the reporting product, declared the representative at Atria Brokers, Oksana Starina. As for Ukraine, the country is one of the largest suppliers of sunflower meal on the global market. In 2017/18 MY (September-May), Ukraine exported nearly 3.6 mln tonnes of the products, said the expert. In the reporting period Ukraine supplied nearly 503 thsd tonnes of Ukrainian sunflower meal towards Asian countries.
During several recent years, Russia dynamically increased the production volumes of major oilseeds and vegetable oils, declared the Vegetable Oils and Oilmeals Trading Director at EFKO Group of Companies, Anton Gritsai during his report. For 3 recent seasons, the domestic consumption of the commodities in Russia remained at nearly stable level, while the exports of crude vegetable oils demonstrated a steadily upward trend — from 1.7 mln tonnes in 2015/16 MY, to 2.6 mln tonnes in 2017/18 MY. Also, the trend was typical for Russian crude sunflower oil — in 2016/17 MY Russia exported nearly 1.7 mln tonnes of the product, which became the record level for the whole contemporary history. In 2017/18 MY, the exports will remain at the last season level, because as of early June 2018 Russian exporters already supplied nearly 1.6 mln tonnes of crude sunflower oil on the global market. Turkey, Egypt, Iran, China and Kazakhstan are the main buyers of Russian crude sunflower oil, added A.Gritsai. At the same time, it is worth noting development of trading in the market segment between Russia and China. So, if in 2014/15 MY the exports of crude sunflower oil from Russia to China totaled 21 thsd tonnes only, then in 2015/16 MY and 2016/17 MY the figures reached 128 thsd tonnes and 99 thsd tonnes, respectively. It is expected that in 2017/18 MY the supplies of crude sunflower oil from Russia to China will exceed 150 thsd tonnes.
According to EFKO estimations, the forecast of crude sunflower oil production in Russia in 2017/18 MY totals 4.5 mln tonnes, while the exports will reach more than 1.7 mln tonnes.
The topic of the Kazakh-Chinese cooperation in agricultural business took the leading position within the whole conference agenda. According to the Head of the sales department at EFKO Almaty, Stanislav Nim, for 5 recent seasons Kazakhstan demonstrated a sustainable growth of the general harvest of oilseed crops. The growth of crop planted areas is the main factor in increasing of the harvest volumes — from 1.5 mln ha in 2013/14 MY, to 2.4 mln ha in 2017/18 MY. Sunflower seed is one of the key oilseed crops in Kazakhstan. EFKO forecasted the harvest at 810 thsd tonnes in 2018/19 MY, up 8.5% compared with the current season figures. At the same time, sunflower seed supply and demand balances of Kazakhstan have the high level of raw material exports. In 2017/18 MY, the country exported nearly 30% of harvested sunflower seed volumes, the expert added.
As for vegetable oils, for 3 recent seasons Kazakhstan demonstrated a stable trend in the growth of the product exports: from 16 thsd tonnes in 2014/15 MY, to 41 thsd tonnes in 2016/17 MY. According to the speaker, such large-scale consumers like China consider the current Kazakh export rates as a "drop in the bucket". It is worth noting that in accordance with the State program of development of the agricultural sector of Kazakhstan, by 2020/21 MY the annual supplies of vegetable oils will already total more than 300 thsd tonnes.
Also, within this session the Vice President and Regional Director in Ukraine, Russia and Baltic States at the company Cotecna, Arina Korchmaryova, reported about the qualitative features of the exports of sunflower oil and meal from the Black Sea countries to the main sales markets. Her report caused a lot of questions to the speaker and a lively debate by the conference audience.
The third session of the conference covered more practical reports on optimization of agricultural trading processes between China and countries of the Black Sea region.
Despite rains and high humidity conditions (even for Shanghai), the participants were able to visit the planned tours, meet with Chinese importers within the conference frames and beyond, and also enjoy their time in one of the most modern and dynamic developing cities of the world. See you another time, Shanghai!
Svitlana Synkovska, APK-Inform Agency
