Ukrainian oilseeds market: wind of trade changes




Without the slightest doubt, Ukraine remains the major global producer of sunflower seed and its by-products, and continues keeping the first position among countries-exporters of crude sunflower oil and meal. At the same time, 2018 was quite controversial for the Ukrainian oilseed market:

— prices for crude sunflower oil reduced to the 10-year minimum level;

— the production volumes and premium on high-oleic sunflower oil increased;

— there is a new importer of sunflower meal — China, but in the beginning of 2019 the rates of contracts conclusion for the supply of the product from Ukraine to China unpredictably lowered;

— most of the major companies-producers of sunflower cake reoriented to the production of sunflower meal;

— Ukraine as the country-exporter of soybeans changed its focus on the oilseed processing, and therefore, reduced the export volumes of the oilseed.

In 2018, on the oilseed crops market of the country, only the rapeseed segment did not face any significant changes, while the latest news about strengthening of the EU requirements for greenhouse gas emissions and cancellation of the VAT on oilseeds exports in 2020, can make some adjustments to trading operations in the market segment.


Crude sunflower oil

To date, crude sunflower oil is the main fat-and-oil product of the country. In 2018, Ukraine produced the record harvest of sunflower seed at the level of 14.9 mln tonnes (hereinafter, the figures of APK-Inform Agency). In addition, the global market demonstrated some increasing of sunflower seed production (up 7% compared with the figures in 2017/18 MY), as well as soybean production (up 9%), which made the high impact on prices in the oilseed segment. Also, the Chinese factor brought pressure on the pricing policy.

In September 2018, hardening of the trade conflict between the USA and China affected the prices on the Ukrainian export market of crude sunflower oil, which fell to the 10-year minimum level (the similar price level was observed in 2009).

Despite the decline of prices, for 4 months of the season-2018/19 the demand for crude sunflower oil on the Ukrainian export spot market was low, in terms of the sufficient share of oil stocks both in the seaports and production plants. Only at the end of December, in the pre-holiday period the bid prices for the product started increasing.

Due to the growth of production of Ukrainian sunflower oil in the current season, the export shipments demonstrated the upward trend. According to APK-Inform estimations, in September-December of 2018 the exports from Ukraine totaled 1.96 mln tonnes, up 15% compared with the same period last season. Increasing of sunflower oil exports was directly related to the fact that traders mainly worked with previously concluded forward contracts.


High-oleic sunflower oil

The opposite trend was observed in the market segment of high-oleic crude sunflower oil, due to rather high demand for the product on the global market in terms of the deficient supply. According to APK-Inform estimations, in 2018 the exports of high-oleic sunflower oil from Ukraine totaled 185 thsd tonnes, while in 2017 the figures reached 210 thsd tonnes.

Due to the fact that the bid prices of crude sunflower oil decreased on the export market, the prices of high-oleic oil became more competitive at the expense of the growth of premiums for the product and the active demand rates of importers.



The following large-scale companies became the main exporters of Ukrainian high-oleic oil in 2018:

— ADM Ukraine

— Bunge

— ViOil

— UkrOliya

— Delta Wilmar CIS

— Allseeds Black Sea

— Avis

— Zheliev S.S. and company, Melitopol elevator

— Melitopol OEP

— Kernel

— Hilientes


— Mimier Trade SA


Sunflower meal

Appearance of a new buyer of Ukrainian sunflower meal became one of the signature moments of 2018 — China, which imported nearly 640 thsd tonnes of the product, including 250 thsd tonnes shipped in December 2018. The long-awaited trading operations started at the end of 2017, after signing of the Protocol of sanitary and phytosanitary requirements for the exports of Ukrainian sunflower meal to China. As a result, the export market of the product increased competition rates, as well as the prices in the ports. In the first half of May 2018, Chinese importers increased the prices for Ukrainian sunflower meal (335-345 USD/t CIF), due to the high demand rates in terms of the insufficient level of the product supply.

However, the current situation did not last long, in particular the trade conflict between the USA and China affected both the trade flows and the prices of soybeans on the global market.

Then, Chinese importers of sunflower meal reduced the bid prices of the Ukrainian product to 290-295 USD/t CIF-China with delivery in December.

But the current slowing down of the conflict led to the further decline of the bid prices of Ukrainian sunflower meal to 240-245 USD/t CIF-China with delivery in January-February of 2019, and some slowdown of the rates of contract conclusion.

As for the prospects of the current season, the price level still remained the main question in the market segment, which will be competitive in relation to the cost of soybean and rapeseed.



For several recent years, the market of soybeans in Ukraine faced the high competition rates between oilseed traders and processors, due to the active demand for the oilseed on the global market. The market segment demonstrated the stable increase of its production and export volumes, as well as the growth of processing capacities.

At the same time, the current marketing year made some changes on the Ukrainian market of soybeans:

— cancellation of the VAT refund for the exports of soybeans, since September 1, 2018;

— the trade conflict between the USA and China contributed to reduction of the prices to the minimum level;

— record increasing of soybean processing volumes.

As a result, Ukraine started changing its focus as the country-exporter of soybeans, on processing of the oilseed crop, and reduced the oilseed exports.

It should be noted that the growth in marginality of soybean processing in Ukraine started in April 2018, due to increasing of the prices for soybean meal by more than 100 USD/t caused by the droughts in Argentina. As a result, in April-May of 2018 Ukraine significantly increased soybean processing volumes in the country.

After cancellation of the VAT refund by the government for the exports of soybeans since September 1, 2018, soybean processing became more and more relevant and popular in the country.

In September-November of 2018, Ukrainian traders exported nearly 433 thsd tonnes of soybeans, while in the same period of 2017 the figures totaled more than 800 thsd tonnes. According to APK-Inform estimations, in 2017/18 MY the processing volumes of soybeans totaled 1.25 mln tonnes, up 9% compared with the season-2016/17. In September-November of 2018/19 MY, Ukraine processed 325 thsd tonnes of the oilseed, up 12% compared with the same period last season. According to the forecast, in 2018/19 MY the processing volumes of soybeans in Ukraine will reach 1.55 mln tonnes, up 24% compared with last season, which will break a new record.

At the same time, Ukraine increased the production of soybean oil and soybean meal, as well as the exports of the products. So, for 3 months of 2018/19 MY Ukraine increased the exports of soybean oil by 43%, and soybean meal — up 58% compared with the same period last season.



In 2018, there were no significant changes in the trading rates and pricing policy on the rapeseed market. In the current MY, Ukraine increased the production of the oilseed by 20.5% compared with the last season, and therefore, the country increased the forecasts of the oilseed exports and processing. Nevertheless, the prices for rapeseed were high, in contrast to the prices for other oilseeds on both domestic and export markets.



Summing up the results of 2018 for the Ukrainian oilseed crops market, it can be noted that despite various difficulties, the segment still continues developing. Oil-producing plants increased the range of products, as well as the production and export volumes, and also expanded the geography of supplies. According to APK-Inform experts, 2019 will be no less than prospective. At the same time, the world market of soybeans will still remain the main factor influencing the price situation of the Ukrainian oilseed market in the current year.


Viktoria Zelenaya, APK-Inform Agency