Sunflower Production Poised
The burgeoning sunflower production within Ukraine, an Eastern European nation abutting the Russian Federation in the Black Sea region, is poised for a remarkable uptick of 7% relative to the preceding year, poised to attain an impressive 13.4 million tonnes during the current agricultural season. Nonetheless, an embargo on the exportation of sunflower oil has engendered an acute dependency among producers upon domestic traders and the agri-crushing sector. Exemptions to this export prohibition are extended solely to Moldova and Bulgaria, although even stakeholders in these nations are harboring resentment towards this prevailing state of affairs.
Export and Crushing Statistics
Exemplified through meticulous scrutiny of customs data, it becomes evident that throughout the entire span of the marketing season spanning from September 2022 to August 2023, approximately 0.6 million tonnes of sunflower oil were disseminated for exportation from the Ukrainian territory, tantamount to a voluminous 13 million tonnes of sunflower crushing, given the customary oil extraction efficiency of 42%. This implies that to procure 1 kg of oil, the crushing of 2.20 kg of sunflower seeds is mandated. Consequently, prognostications for the 2022-23 season encompass an extensive spectrum ranging from 12 to 13 million tonnes of sunflower crushing within Ukraine, while projections for the ongoing marketing season, encompassing the interval from September 2023 to August 2024, anticipate a total of 11.4 million tonnes. This muted performance is ascribed, in part, to the ongoing geopolitical turmoil involving Russia, which has precipitated a diminution in the crushing capacity of Ukraine.
Challenges Encountered in Sunflower Exports
The expedition of sunflower oil exports has encountered an array of impediments as time has progressed. Notably, the blockage of shipments from Ukrainian ports located in the Black Sea region to Russia has come to the fore as a prominent concern. As of September 14, a meagre 10% of the sunflower crop area for the present season has undergone the harvesting process, culminating in the attainment of a production yield encompassing 1.03 million tonnes.
The deceleration in the price trajectory of sunflowers has been particularly pronounced, a phenomenon attributed to the confluence of heightened supply, elevated availability, and flagging demand. In select locales, the market price has plummeted to a nadir, reaching a nadir of $240 per metric tonne, exclusive of the value-added tax (VAT). Additionally, reports have emerged suggesting that transactions involving sunflowers have been transpiring with neighbouring Bulgaria at an elevated rate of $390 per metric tonne, which incorporates associated fees.
Factors Underpinning the Price Erosion
The discernible and substantial deterioration in sunflower prices finds its etiology in multifaceted causative factors. Of particular note is the persistent proscription on sunflower imports from Ukraine within the confines of five neighbouring European Union nations, which has persisted unabated over the course of the past few months. Furthermore, the Turkish government has resolved to implement an augmentation in the reference price assigned to both sunflowers and sunflower oil. In the wake of this determination, it is envisaged that levies pertaining to customs duties on imports will undergo a corresponding escalation.
In conclusion, Ukraine’s sunflower industry faces export challenges and price volatility due to geopolitical tensions and export restrictions, but it continues to thrive with a substantial harvest, reflecting the resilience of its agricultural sector.
Import/Export Statistics
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