According to APK-Inform, as of March 1, sunflower seed stocks in safe and relatively safe oblasts of Ukraine totaled slightly more than 4 mln tonnes. This volume theoretically can be processed. However, the key issues that can promote it, except internal logistical problems, include resuming of sunflower oil export and the volume of this export, meaning that the main factor is a capacity of western railway border stations.
Taking into account the fact that all parties are interested in the soonest resuming of sunflower oil export from Ukraine to the EU, the export mechanism can be settled as soon as in 1-2 months.
Potentially, Ukraine can offer about 600-800 thsd tonnes of sunflower oil until the end of the current season, under the condition of smooth cooperation between processing enterprises, internal logistics and railway. However, it is a very difficult task.
Before the war, an average monthly export of sunflower oil by land transport through the western borders was about 20-25 thsd tonnes. It can be raised to 50-60 thsd tonnes under the condition of strong demand and promotion of higher export by both rail and road transport, including export in bulk and containers. This volume is significantly lower compared to the supply from Ukrainian producers of oil. Thus, it will influence the processing volumes of functioning plants as well as the expediency to launch the plants that have suspended their activity.
Taking into account all factors as well as long-lasting shutdown of plants and virtually absent external trade in the first half of March, Ukraine can export no more than 300 thsd tonnes of sunflower oil until the end of the current season. The volume can reach 400 thsd tonnes under the most optimistic scenario.
Ukraine will not be able to resume export through seaports in the nearest time even in case of prompt completion of the military activity. Infrastructure of some ports is damaged and the waters of the Black Sea are mined.
Thus, Ukraine will export no more than 3.5 mln tonnes of sunflower oil in 2021/22 MY, the lowest in 9 seasons. In September-February 2021/22 MY, Ukraine exported 3.1 mln tonnes of sunflower oil, down 2% y/y.
In March, the volume of sunflower seed transported toward the western borders increased significantly, probably, due to the stronger demand on the external markets amidst the extremely low supply of Ukrainian sunflower oil. Additionally, the higher export of sunflower seed can be promoted by possible canceling of quotas and duty on Ukrainian sunflower seed to provide the food security in the EU. However, we should not expect for significant growth of sunflower seed export, as it is limited by the insufficient capacity of borders stations as well.