USDA has lowered its sunflower harvest forecast for Ukraine, but raised its export estimate

The military invasion of the Russian Federation into Ukraine stopped the sea export of agricultural products and the work of the main processing enterprises located in the ports of Ukraine, which led to significant changes in the work of the world market of oilseeds. Before the war, Ukraine was the world's main sunflower producer and exporter of sunflower oil and meal, providing half of the world trade of these products in 2020/21 MR. Sunflower processing was mainly done domestically, and then the meal was exported to China, the EU and Turkey, and the oil was exported to India, the EU and China.

The hostilities in the second half of the 2021/22 season dealt a powerful blow to logistics, infrastructure, ports, as railways, roads, warehouses and processing plants became the targets of Russian attacks.

As a result, surplus sunflower seeds were exported to the EU, Moldova and Turkey. And in general, the export of sunflower in 2021/22 MR increased in comparison with the previous season by more than 7.5 times, while the export of sunflower oil decreased by 15% and meal – by 26%.

The operation of the grain corridor made it possible to significantly increase the export of meal and oil in September-October, but attacks on Ukrainian energy facilities reduced processing capacity, and some enterprises were forced to stop, which may soon increase the rate of sunflower exports again.

According to the USDA forecast, in 2022/23, Ukraine will export 3.6 million tons of sunflower oil, 2.75 million tons of sunflower meal, and 1.95 million tons of sunflower seeds. The main batches of sunflower will be purchased by the EU, where its own crops have been affected by the drought.

The forecast of world sunflower production was reduced by 0.7 to 51.3 (57.32 in 2021/22 MR) million tons, in particular for Ukraine - by 0.4 million tons to 10.1 (17.5) million tons and the EU - by 0.22 million tons to 9.475 (10.25) million tons.

Purchase prices for sunflower in Ukraine increased by UAH 500-1,000/t to UAH 15,000-15,500/t including VAT with delivery to the plant, while export prices with delivery to Romania and Bulgaria remain at a high level of $570-590/t.