Black Sea & Danube Region: Key Issues Affecting Oilseed and Vegoil Market Development

On October 15th UkrAgroConsult hosted a leading European oilseed and vegoil industry event – the 10th International Conference BLACK SEA OIL TRADE in Bucharest, Romania.

With a focus on expanding global and regional cooperation, the Conference brought together 300+ market players from 33 countries, including Black Sea & Danube regions, Eastern Europe and the Balkans to create sustainable oilseed and vegetable oil supply chains to the global food markets.

The Conference examined the most pressing issues in the regional oil & fat sector, trade and logistics, a new model of global vegoil imports, EU agricultural policy, as well as provided exclusive forecasts and insights.

We had an opportunity to talk to Sergey Feofilov, Director General, UkrAgroConsult, who analyzed some of the topical issues affecting oilseed and vegoil market of the Black Sea & Danube countries.

What are the major trends in the global oilseeds market for the coming years, and how do these trends affect farmers in the Black Sea region?

The following main trends should be highlighted:

• Growing demand for oilseeds from the biofuel industry
• Changing consumer preferences in favor of healthier oils, such as sunflower and rapeseed oils, due to their lower saturated fat content.
• Climate change is increasingly affecting crop yields and there is a growing demand for drought-resistant and high-yielding varieties of soybeans, sunflower and rapeseed.
• Farmers in the Black Sea region will need to adapt quickly to these changes, but the use of modern farming methods will provide an opportunity to generate additional income.

What are the main challenges faced by oilseed producers in the Black Sea region amid current global market conditions?

Oilseed market in the Black Sea and Danube region has undergone significant changes due to the ongoing war in Ukraine. Disruptions in logistics and supply chains have particularly affected the transportation of oilseeds and vegoils to the global market. Ukraine is a major producer of sunflower oil and meal, and disruptions in production and exports have led to a sharp increase in prices of oilseeds and vegoils globally, which in turn has affected food costs and led to inflation in various regions.

Blockades and attacks on shipping lanes have also limited the goods availability to international markets, prompting some countries to look for alternative suppliers and diversify their risks.

Countries in the region have begun to invest heavily in port and transportation infrastructure to improve logistics and reduce dependence on conflict-prone sea lanes.

There is growing interest in alternative oilseeds, such as soybeans, that can be grown in climates that vary from region to region.

In the current context, how have climate changes and geopolitical conflicts impacted the production and prices of oilseeds in this region?

Climate change has significantly affected oilseed production in many regions, including the Black Sea. Droughts, floods and erratic rainfall patterns have become more frequent. These extreme conditions disrupt sowing schedule and reduce yields in key oilseed producing regions.

Due to lower yields, oilseed prices became more volatile. As oilseed production in the region in 2024/25 fell below the expected level, especially of sunflower, this will lead to a reduction in supply to the global market and higher prices for sunseed. We are already observing a sharp rise in prices in Romania, Ukraine, Bulgaria and other countries compared to last season.

Geopolitical tensions have a negative impact on trade, with restrictions and quotas being imposed, leading to price volatility. Logistical problems further stimulate price increases, especially in regions that depend on imports of oilseeds or processed products.

Sunflower oil and meal prices will largely depend on the geopolitical situation in the Black Sea region. If exports from the Black Sea region are not stable, we should expect significant price fluctuations and a widening of the spread compared to other vegetable oils.

What strategy should farmers follow to adapt and survive in the ever-changing market conditions?

Farmers can adapt and grow in an ever-changing market environment by adopting a multi-faceted strategy that integrates technological, economic and environmental approaches. These include:

• Crop diversification, introducing niche crops that are in less competitive but more profitable markets.
• Market intelligence and flexibility. It is very important to monitor market trends, price fluctuations, consumer demand and policy changes.
• Adoption of technological innovations. Precision farming, data analytics, automation – these technologies can increase efficiency and help farmers respond quickly to changing conditions.
• Climate adaptation strategies. Using varieties that are resistant to changing climatic conditions such as drought, flooding and heat stress. Shifting planting and harvesting dates based on predicted weather conditions can help optimize yields. This is particularly true for many countries in the Black Sea & Danube regions this fall, during a period of prolonged drought

How is global demand for vegetable oils changing, and what are the prospects for exports from the Black Sea region?

Demand for vegetable oils is growing due to population growth and rising incomes, especially in Asia and Africa.

Health-conscious consumers are increasingly looking for healthier oils, such as sunflower and rapeseed oils, due to their lower saturated fat content compared to palm oil.

Policies aimed at promoting biofuels are a significant driver of vegetable oil demand, especially for oils such as soybean and palm.

Investments in logistics and the development of new trade routes are important for the long-term prospects of exports from the Black Sea region. The Black Sea region competes with other major vegetable oil producers.

Any changes in production levels or trade policies in these countries may affect the competitive position of our region.

We expect that global demand for sunflower oil, the dominant product from the Black Sea region, will remain high. The Black Sea region will continue to play an important role in the global vegetable oil markets, but the pace of recovery and growth will depend on how the geopolitical situation unfolds and how infrastructure issues are resolved.

What are the global demand and price trends in the Oilseed Sector? Can you share with our readers a price forecast for 2024/25 season?

Global demand and price trends in the oilseeds market depend on weather, crop production, government policies, etc.

As the 2024 oilseed production in the Black Sea & Danube region fell below the expected level, especially for sunflower seed, this will lead to a reduction in global supply and higher prices for sunflower seed. We are already observing sharp price increases in Romania, Ukraine, Bulgaria and other countries compared to last season.

Sunflower oil and meal prices will largely depend on the geopolitical situation in the Black Sea region. If exports from Ukraine and russia are not stable, significant price fluctuations are expected with widening spread compared to other vegetable oils.