Decrease in Sunflower Processing Volumes
In June, Ukraine saw a 36.36% reduction in sunflower processing volumes compared to the record levels in May due to diminishing raw material stocks. Despite this decrease, sunflower meal exports hit a record high for the month, reaching 412,000 tons, albeit a 7% drop from May.
Shifts in Export Destinations
The reduction in meal exports in June was influenced by a significant 40% drop in supplies to EU countries, totaling 105,000 tons, marking the lowest export figure for this region since May 2023. In contrast, sunflower meal exports to China continued their upward trend, increasing by 3% to 214,000 tons, the highest since January 2023.
Annual Export Growth
From September to June of the 2023/24 fiscal year, Ukraine’s sunflower meal exports rose by 21% to 4.2 million tons compared to the same period last season, making it the second-highest on record after the 4.5 million tons in the 2019/20 season. EU countries remained the primary buyers, accounting for 43% of exports, with a 32% increase over ten months.
Impact of EU Import Duties
Starting July 2024, the EU imposed a duty on meal imports from Russia and Belarus, potentially boosting demand for Ukrainian meal and supporting its prices.
Price Decline Amid Increased Supply
Export prices for sunflower meal dropped by $4-5 per ton to $190-195 per ton during the week, reflecting a 16-18% decline for the month. This decrease is attributed to an increased supply of feed grains and a significant drop in global corn prices. Additionally, the rising supply of soybean meal from South America and rapeseed meal in the EU continues to exert pressure on sunflower meal prices.
The sunflower meal market in June illustrates the complex interplay of supply and demand dynamics in the agricultural sector. While export volumes reached new heights, prices fell due to a combination of reduced processing volumes, shifting export destinations, and increased competition from other feed grains. The recent EU import duties on Russian and Belarusian meal may offer some relief to Ukrainian exporters, highlighting the geopolitical factors that can influence market conditions.