Key Takeaways
- Output Drop: Ukrainian sunflower oil production is forecast at 4 million tons, well below pre-war levels of 5–6 million tons.
- Smaller Seed Harvest: Sunflower seed output has fallen to about 10 million tons from around 16 million tons before the conflict.
- Tighter Exports: Limited export availability is expected to support sunflower oil prices amid reduced global supply from Ukraine.
- Partial Substitution: Increased soybean and rapeseed processing (about 1 million tons of oil) will not fully offset sunflower oil losses.
- Shifting Trade Flows: Russia is expanding vegetable oil exports to Turkey, China, and India as Ukraine focuses more on the EU market.
Market Update
The Ukrainian Club of Agrarian Business (UCAB) forecasts sunflower oil production at approximately 4 million tons in the current marketing year, according to Svetlana Litvin, head of UCAB’s analytical department. This marks a sharp decline from pre-war production levels of 5–6 million tons.
The main factor behind the lower output is a reduced raw material base. Ukraine’s sunflower seed harvest is estimated at around 10 million tons this year, down from 11 million tons last year and roughly 16 million tons before the full-scale war. Lower sown areas due to occupied territories and ongoing infrastructure attacks have constrained production capacity.
Despite the drop, the projected 4 million tons of sunflower oil will comfortably cover domestic consumption estimated at 400,000–500,000 tons. However, export potential will be significantly reduced, limiting foreign exchange earnings for Ukraine. To partially compensate, the country is ramping up soybean and rapeseed processing, aiming for about 1 million tons of oil from these alternative crops, though this is insufficient to fully replace lost sunflower oil volumes.
Competitive pressures are intensifying as Russia expands its vegetable oil exports, focusing on Turkey, China, and India, while Ukraine traditionally targets EU markets. Ukrainian sunflower meal exports to the EU have reportedly fallen to a 15-season low, signaling a meaningful shift in trade flows and market shares.
Key Production and Trade Figures
| Indicator | Current Level | Previous / Pre-war Level |
|---|---|---|
| Sunflower oil production (marketing year) | ≈ 4 million tons | 5–6 million tons (pre-war) |
| Sunflower seed harvest | ≈ 10 million tons | ≈ 16 million tons (pre-war) |
| Sunflower oil domestic consumption | 0.4–0.5 million tons | Similar range (covered by current output) |
| Oil from soybeans & rapeseed | ≈ 1 million tons (target) | N/A (compensatory increase) |
Analysis
Bullish for Sunflower Oil Prices: Ukraine has historically been a dominant global sunflower oil supplier, and the forecast decline to 4 million tons significantly tightens export availability. With domestic needs secured but 1–2 million tons less exportable supply, global buyers will have fewer options for Ukrainian-origin product. UCAB analysts note that prices are unlikely to ease in the near term given constrained supply against steady global demand.
Traders should closely track Russian export activity into Turkey, China, and India, as well as EU procurement behavior, where lower Ukrainian volumes and a 15-season low in sunflower meal exports suggest a reconfiguration of traditional trade routes and potential basis volatility.
Source: Market Data
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