Ukraine exported a record amount of sunflower, but will cut production in half in the new season

Russia's military aggression caused the greatest damage and destruction to the Russian-speaking eastern and southern regions of Ukraine, where sunflower production was concentrated. And it is this crop that provides almost half of Ukraine's agrarian foreign exchange earnings.

According to NASA Harvest analysts (a program on food security and agriculture), approximately 22% of Ukraine's agricultural land is currently occupied, as a result of which the sunflower sowing area has significantly decreased. If in 2021, 6.5 million hectares of sunflower were sown in Ukraine, then in 2022 - only 4.6 million hectares, i.e. 28% less. This corresponds to the indicator of 2010/11 MR, after which the sunflower sowing area steadily increased.

However, despite the reduction of the sunflower crop in 2022, there will be no shortage of it within the country. In recent years, about 6 million tons of sunflower oil were produced annually in Ukraine, of which almost 85% was exported.

According to the Institute of Agrarian Economics, sunflower production in Ukraine will decrease to 7.9-8.8 million tons in 2022 compared to 16.5 million tons in 2021 and 14.9 million tons on average in 2019-2020.

The shutdown of the main sunflower processing plants, located mainly in the Black Sea ports, forced farmers to intensify the export of sunflower, of which 1.6 million tons have already been shipped this season. In June, a record 540,000 tons of sunflower were exported, which is 60% higher than in May 2022 year and triples the total export of the previous season - 189.6 thousand tons.

A sharp increase in sunflower supplies to Romania and Bulgaria increased pressure on local market prices. And the decrease in prices for vegetable oils lowered the demand prices for sunflower for delivery to Bulgaria from $750-800/t to $550-570/t.

In Ukraine, processors keep the demand prices for sunflower at a low level of 10-11 thousand hryvnias/t with delivery to the factory, because they have difficulties with the sale of meal against the background of falling export prices for sunflower oil.

The establishment of supply chains through the western borders in the new season will improve the processing and export capabilities of products and domestic factories, which will contribute to the restoration of domestic demand.