Europe keeps Ukrainian commodity markets on edge

Ukraine rapeseed and soybeans traditionally were exported to the  EU counties with negligible sunflower exports.  But after the outbreak of hostilities, sunflower exports to Europe reached unprecedented volumes.

Total oilseeds exports were more 5.5 M mt in seven months of the current season (Sept.2022-March 2023), compared to 2.2 M mt of 2021/22 season and 2.4 M mt in 2020/21.

Share of EU countries in the total oilseeds exports, 2022/23 (Sept.2022-March 2023):

• sunflower – 81%
• soybeans – 47%
• rapeseed – 90%.

The issue of extending duty-free imports of Ukrainian agricultural products to the EU for another year remains open. The duty-free imports regimes expires on June 1, 2022.

A wave of farmers’ dissatisfaction has swept across the Eastern European countries. The reason is allegedly the oversaturation of markets with grain and oilseeds from Ukraine with falling domestic prices paid to the local farmers. As a result, Poland suspends agricultural exports from Ukraine.

Poland export destination does not play a key role in Ukraine’s oilseeds exports. Poland share in the total soybean exports is no more than 5%, and only 2.7% and 1.8% for sunflower and rapeseed exports, respectively (2022/23 season).

As previously, the EU countries remained the biggest importers of Ukrainian soybeans and rapeseed to meet its own needs. But the biggest changes are seen in the sunflower market.

Estimated sunflower transit through these countries (based on the official export-import statistics of the EU and Ukraine):

• Bulgaria – 4%.
• Romania – 44%.

Building up big sunflower stocks in Bulgaria due to high sunflower imports is combined with increases in sunflower crushing and sunflower oil exports.

Currently, the agricultural markets are quite unpredictable and require a quick response. Almost all the recent markets changes have been commanded by the war factor with greatly increasing logistics costs. It is the functioning grain corridor and existing alternative supply chains, incl. those thru the western borders, allow uncertainties decreasing making grain production and exports profitable for farmers.