The market of high oleic sunflower and oil before, during and after the war

There was an upward trend in the production of high oleic sunflower in Ukraine before the war. The growing use of HO sunflower oil in the food industry worldwide is one of the key factors driving demand growth.

In 2022/23, the area and production of HO sunflower in Ukraine were the lowest in recent years due to the following:

• the military action in the regions where the HO sunflower is traditionally grown.
• the decline in seed production that will affect the production of HO sunflower not only in 2023 but also in the following seasons.

Despite a gradual recovery in 2023, production will remain the lowest in recent years.

By the 2020/21 season, production of high oleic oil had reached almost 500K mt, which was excellent for this market sector. Because of the war, Ukraine lost its position and share in the global HO market it had gained over the years.

From 2023/24, UkrAgroConsult forecasts a gradual recovery of HO sunflower processing with 2023/24 HO oil production.

High oleic sunflower oil remains an export-oriented commodity and almost all the oil produced in Ukraine is exported.

Key factors in the market of HO sunflower oil 

• The war and its aftereffects;
• Unstable operation of the grain corridor, which limits oil exporters' access to markets;
• The ban on imports of agricultural products from Ukraine to Eastern Europe includes also high-oleic sunflower.

Anyway, in Ukraine the unstable margin on high-oleic sunflower is the key market factor limiting the growth of high-oleic sunflower production. Sometimes low or no premiums force farmers to sell HO sunflower at the price of conventional sunflower, which very often does not cover the production costs. This leads to farmers refusing to grow HO sunflowers or reducing the area.

Significant fluctuations in the premium are caused by unstable demand. The premium size depends mainly on the demand and the harvest, and changes every year. Before the war, crushers encouraged farmers to grow high-oleic sunflower by offering to enter into forward contracts and provide the seed for planting or/and other inputs with the subsequent purchase of HO sunflower at a premium.