New challenges for Ukrainian sunflower oil market

Source

APK-Inform

5230

According to the Customs Service, in January, Ukraine slightly reduced sunflower oil export compared to December (-11%). It totaled 612 thsd tonnes that was still record high for this month. Thus, despite some decline, the export of sunflower oil remained higher than the year ago for the second month in a row. So, the year-to-year gap narrowed in January.  

Ukraine exported 2.65 mln tonnes of sunflower oil in September-January 2021/22 MY that almost matched the volume shipped for the same period of the previous season. Additionally, it was 5% higher compared to the same period of 2019/20 MY that was the record season for sunflower oil export (6.63 mln tonnes).

APK-Inform expects stronger demand for Ukrainian sunflower oil in the coming months that will promote domestic processing. However, geopolitical situation will remain in focus.

This season, high prices of sunflower oil compared to other edible oils are one of the reason for its limited export, despite significant growth of sunflower seed crop in both Ukraine and the world. However, the record prices of palm and soybean oils on the global market in the recent months benefited the competitiveness of sunflower oil. It can push the demand for sunflower oil up, particularly, from India and China.

APK-Inform forecasts the export of Ukrainian sunflower oil in 2021/22 MY at high level – 6.6 mln tonnes that will be able to cover fully the needs of India and China.

However, recently, India has said that it is worrying about the geopolitical risks and disruption of sunflower oil supply from Ukraine amid the rising tension between Ukraine and Russia. It plans to increase purchases of sunflower oil from Russia and Argentina. The South American country is harvesting its sunflower seed crop and the production can amount to 3.15 mln tonnes, according to Oil World’s forecast.

Therefore, apart from the existing risks and challenges for sunflower oil market, there has appeared a new one – geopolitical situation that provokes concerns among the largest importers as to the ability of Ukraine to supply its product timely. Additionally, this factor is considered by ship-owners, who provide their vessels for loading.

However, the export of Ukrainian sunflower oil was going as usually in the first ten days of February. As of February 11, Ukraine exported almost 190 thsd tonnes of sunflower oil, down only 11% compared to the same period of the last year.

More detailed information about the prospects of oilseed market will be presented at an international conference Fat-and-Oil Industry-2022 that will be held on March 17 in Odessa.

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