SUNFLOWERSEED/OIL

Global sunflowerseed production stands at around 55M tonnes with high oleic (HO) sunflowerseed comprising around 7-8% of this total.

HO sunflowerseeds have been bred to contain higher levels of oleic acid (80% or higher) than its conventional counterpart, producing an oil that is resistant to oxidation and ideal for high temperature frying.

As a leading producer of sunflowerseed and the world's top exporter of sunflower oil, Ukraine also produces HO sunflowerseed and oil.

However, the country's HO sunflowerseed planted area is expected to more than halve in the 2022/23 marketing year compared with the previous season, due to the ongoing war in the country (see Table 1, below).

Russia's occupation of Ukraine has reduced land available for planting. In addition, the 55% forecast fall in HO sunflowerseed planted area is also the result of uncertainty and risks leading to lower sunflowerseed exports in the most productive sales months – February and March.

In the 1 September 2021-30 August 2022 marketing year, Ukraine's HO sunflower planted area fell by 10% compared to the previous season. However, the 2021/22 harvested crop rose by 6% compared to the previous marketing year to total 1M tonnes, due to higher yields (see Table 1, left).

Farmers had enjoyed a HO sunflowerseed premium at the start of the 2020/21 marketing year of around UAH550-570 (US$15-15.50)/tonne.

However, from January 2021, HO sunflowerseed was selling at the same price as regular sunflowerseed and was being partially processed with it. This was the main reason for the reduction in plantings in the 2021/22 marketing year.

At the beginning of the 2021/22 season in September, the market witnessed a recovery in the HO sunflowerseed premium from UAH500 (US$15)/ tonne to UAH1,400 (US$38)/tonne at the beginning of the war with Russia in February 2022.

Currently, the premium is in the range of UAH1,400-1,500 (US$38-40)/tonne, supported by stable demand from EU countries.

Planted area

Ukraine's planted area of HO sunflowerseed was 440,000 tonnes in 2021/22, down 10% from the previous season (see Table 1, left)

Production of HO sunflower oil was 330,000 tonnes in 2021/22, a 23% fall compared with 429,000 tonnes in 2020/21.

Exports of HO sunflower oil also fell by 24% to 323,00 tonnes, due to the ongoing war and Russia's blockade of Ukrainian ports, as well as logistics constraints (see Figure 1, left).

In March 2022, monthly shipments of HO sunflower oil fell to a low of 1,300 tonnes but recovered to 25,000-30,000 tonnes/month by the end of the 2021/22 season.

Exports

Ukraine managed to retain its HO sunflower oil export markets in 2021/22, with the oil shipped to more than 50 countries. Top importer, the EU, increased purchases in 2021/22 (172,700 tonnes, +2% compared with 2020/21), along with the USA (38,000 tonnes, +18%) (see Figure 2, below left).

However, exports to countries such as the UK (25,600 tonnes in 2021/22) and Malaysia (19,600 tonnes) fell by 34% and 36% respectively compared with 2020/21.

A handful of top producers account for more than 80% of HO sunflower oil exports from Ukraine.

Forecast

Looking ahead to 2022/23, the planted area of HO sunflowerseed is expected to fall substantially by 55% to 200,000-

World sunflower oil market to be worth US$38bn

The value of the global sunflower oil market will reach US$21.4bn in 2023 and is forecast to rise to US$38.4bn by the end of 2033, according to market research firm Fact.MR.

"Over the course of the next 10 years, worldwide shipments of sunflower oil are predicted to increase at 6% CAGR," it said.

Growing demand for healthy processed foods; the increasing adoption of healthy cooking oil; supportive initiatives to promote sunflower production; and rising awareness of the health benefits associated with sunflower oil would bolster market development in the future, Fact.MR said.

The growing use of sunflower oil in manufacturing vegan cheese and vegan mayonnaise is also expected to offer rewarding business scope going forward, according to the company.

Fact.MR said sunflower oil offered a better shelf life, a neutral taste and a healthier alternative to some vegetable oils. Factors that would drive increased use of sunflower oil in the next decade included:

• The growing use of processed sunflower oil in the food service industry, which accounts for a high market share due to the increasing establishment of restaurants and the growing popularity of dining out.

• The growing consumption of snacks and processed foods.

• Increasing demand for healthy foods. with natural ingredients.

250,000ha compared with the previous year. As a result, the crop will fall to 450,000-550,000 tonnes.

This market segment, like others, has been adversely affected by the war.

However, the sector does offer significant potential in view of steady demand for both HO sunflowerseed and oil, crushers resuming operations due to the United Nation's deep-sea ports grain export corridor, and current attractive prices and premiums.

This article is based on a 2 November report written by Svitlana Kupreeva, oilseed market analyst, UkrAgroConsult, Ukraine

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Unsaturated lipids such as EPA and DHA omega-3 fatty acids are more prone to oxidation and require special handling including the use of antioxidants and blanketing with inert gases, refining oils in a vacuum and limiting exposure to ambient air

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