Sunflower exports: to be or not to be? 2022-2024

Ukraine is one of biggest sunflower (SFOil) exporter, occupying a leading position in the world market. However, logistical problems of the commodity shipments by sea promoted a sharp increase in sunflower exports. In 2021/22 (previous season), the record high sunseed exports was not considered as anything unacceptable given the record 2021 sunflower harvest and high sunflower carryover due to some large crushers shutdown.

But in the current 2022/23 season, according to UkrAgroConsult estimates, high sunflower export at level of 2.2 M t  together with  low 2022 sunseed harvest, may provoke heavy financial loses for SFOil producers.

Affects of high sunseed exports

• sunflower deficit in the domestic market;
• drop in loading of the crushers;
• shortening crushing period from 9-11 month per year down to 7-9 month;
• drop in the domestic SFOil production.

February – August, 2023: Ukraine maybe in on the way to losing its first position in the global export of sunflower oil.

Sunflower exports starting from February 24, 2023 regulated by new Law No. 8274. The Law changes the procedure for calculating the sunflower export prices and duty. The Law might regulate also prices of veg oils and meals.

According to the Law, sunflower cannot be exported at price lower than that set by the relevant government body. Probably, the indicative prices will be set by the Ministry of Economy once a month. According to the Law, the price is set on the basis of stock exchange quotations for vegetable oils and also for other oilseeds, incl. sunseed.

The procedure of the sunseed price setting likely will be rather complicated, since no an exchange that trade sunseed and/or SFOil. The CME Group might supply some raw materials for the calculations, but at the moment setting the price faces considerable number of uncertainties, for ex. with delivery basis, quality indicators, some others.

Of course, new trends will be a consequence of the introduction of the law.