The Global Sunflower Market is Expected to Have a Comfortable Balance in 2022-23

Thanks to positive crop progress, the sunflower balance is expected to be comfortable in the upcoming marketing year. As of now, the crop is well into the dormant state of the crop calendar in Europe, Ukraine, and Russia. With no reports of crop failures and a larger Chinese and Argentinian sunflower crop, global production is expected to be higher, which will help offset reductions in other seed oils. This is good news for the sunflower market, as it suggests that there will be enough supply to meet demand, which should help stabilize prices.

In Ukraine, drier than usual weather patterns and below mean temperatures so far in June and more than higher precipitation in southern areas of the country have boded well for sunflower crops planted in Mar-23 to-May-23. The yield forecast for Ukraine for sunflowers has thus been put by the European Union’s JRS Monitoring Agricultural Resources (MARS) latest report at 2.36 t/ha, up 4% on the year average. Based on the improved yields, the International Grains Council (IGC), as reported by the European Commission, also expects the Ukrainian sunflower crop to come up to 13.5 million mt, 10.7% up YoY. Ukraine’s Institute of Agricultural Economics has a slightly higher forecast at 11.8 million mt. Based on these sentiments, the Tridge forecast is kept steady this month at the initial 12 million mt.

Russia, another prominent oilseed sunflower producer’s crop for 2022-23 years is revised up at 16.5 million up from 15.5 million mt in the previous marketing year. Plantings of sunflowers in Russia were completed early, adding a slightly improved planting area which will aid the uptick.

In its third forecast of the year, COCERAL puts European Union (EU) sunflower production up by 1.2 million mt to 10.83 million mt, aided by the upward expected output in growing countries along the Danube. The Hungarian crop is up 0.74 million mt to 2 million mt, Bulgaria up 0.13 million to 2.1 million mt and the Romanian crop revised up by 0.44 million mt to 2.9 million mt. The EU Commission’s forecast is a little lower at 9.1 million mt but still higher YoY.

The story coming out from Argentina is also similar. Argentina is expected to produce 3.9 million mt of sunflower, up 0.5 million mt from the 2021-22 marketing year. The good fundamental stories are helping to keep the pace of the global sunflower trade. So far this year, export and import of sunflower oilseed, oils, and meal have been robust from Ukraine, Russia, and the EU. These all put global oilseed sunflower production in a comfortable balance: according to data from the USDA, the crop is expected to increase by 5% YoY to 54 million mt this marketing year.

Farmers seem to be fully aware of prevailing news and are thus selling off current stocks not only to empty their storage facilities for the new crop but also to take advantage of current prices. Prices are currently low, but a good crop harvest can only mean, all other things staying equal, a further dampening of prices. With current prices too, some buyers may be incentivized to hold off buying with the expectation that the start of harvest in Europe and the Black Sea area towards the end of August will signal a bearish sunflower market.