Sunflower Processing in Ukraine Hits Three-Month High, Exports Drive Growth across the global market

According to recent estimates by market analysts, Ukraine signifying one of the major exporters of Sunflower and its downstream Sunflower oil to the global market witnessed a notable surge in Sunflower processing during the entire month of March, reaching a three-month high of nearly around of 1.49 million tonnes. This marks a significant 9% increase compared to February and a robust about 10% rise from March 2023 figures. The cumulative processing of Sunflowers in Ukraine for the first seven months of the 2023/24 marketing year has also seen substantial growth, totaling nearly around 9.3 million tonnes. This represents an 11% surge compared to the same period in the previous season, reaching the highest level recorded in the past three seasons and approaching pre-war figures of about 9.6-10.5 million tonnes in the September-March timeframe.

Several market analysts attribute the increased processing rates primarily to the rise in Sunflower oil exports during the ongoing season, which has contributed to the relatively consistent operation of critical ports such as Odesa, with the Danube port being a notable exporter to the global market. However, despite the reduced Sunflower harvest in 2023 compared to pre-war levels, the onset of April 2024 witnessed Sunflower stocks totaling approximately 4.5-5 million tonnes, inclusive of both farmer stocks and contracted volumes of processors. This quantity signifies the lowest inventory level documented in the past three seasons.

While further looking ahead into this, market analyst additionally forecasts the crushing of Sunflowers for the 2023/24 season to reach between 13.3-13.8 million tonnes, at least 4% lower than the previous season. However, this projection is contingent on the export market dynamics. The gradual resumption of Sunflower exports to the EU and reduced import duties on the oilseed in Turkey are expected to bolster shipments to foreign markets. Nonetheless, the domestic market's attractive price levels are anticipated to temper this trend. However, despite the optimistic outlook, experts highlight that Sunflower export volumes remain notably lower than the previous year, with competition primarily observed in the southern regions. Additionally, the increase in crop exports faces challenges due to the complex licensing regime for Ukrainian Sunflower imports in Bulgaria. On the downstream market side, the demand and end-user consumption for Sunflower oil remained on the upper side across the global market thereby creating a ripple effect in weakening the availability of material among the market participants and impacting the overall export momentum.  Ending up with this, market participants according to the ChemAnalyst further anticipate a continuous rise in overseas demand for Sunflower oil from the global market thereby resulting in a continuous rise in its prices.