Less than 250,000 tonnes of sunflowerseed products left Ukraine under the Black Sea Grains export deal agreed on 22 July up to end of the 2021/22 marketing year, according to a report by the United States Department of Agriculture (USDA).
Sunflowerseed products made up a small percentage of total export volumes compared to feed grains in the period, the Foreign Agricultural Service (FAS)’s Oilseeds: World Markets and Trade November report said, while sunflowerseed shipments were minimal.
“The Russian invasion of Ukraine triggered a series of major impacts on the global oilseeds market. Prior to the conflict, Ukraine ranked as the top producer of sunflowerseed and top exporter of sunflowerseed products, representing about half of global trade in 2020/21,” the report said.
Before the war, Ukraine produced sunflowerseed primarily to crush domestically and then exported the meal to China, the European Union (EU) and Turkey; and oil to China, the EU and India.
“The onset of hostilities dealt a massive blow to logistics, infrastructure, and port access as railways, roadways, and storage and processing facilities were all targets of Russian attacks,” the report said.
Faced with limited opportunities to export through regular shipping routes and reduced storage capacity, the USDA said domestic processors had reduced operations.
“The resulting glut of unprocessed sunflowerseed found new export destinations in geographically accessible countries with available crush capacity such as the EU, Turkey and Moldova,” the report said.
In total, Ukraine exported more than seven-and-a-half times as much sunflowerseed, 26% less sunflowerseed meal, and 15% less sunflower oil in the 2021/22 marketing year (September 2021-August 2022) compared to the previous year.
“The tumultuous year in trade has left the country with massively bloated sunflowerseed stocks heading into the 2022/23 marketing year,” the report said.
However, the USDA said shipments had picked up significantly in September.
For the current marketing year, forecasts for Ukraine sunflowerseed and products reflected lower production expectations as well as the assumption of continued distorted trade patterns and limited crushing, the report said.
For the 2022/23 marketing year, Ukraine’s exports of sunflowerseed, sunfowerseed meal and sunflowerseed oil were forecast at 1.95M tonnes, 2.75M tonnes and 3.6M tonnes respectively.
The EU was expected to continue importing large volumes of sunflowerseed due to drought impacting its own oilseed crops.
“Continued volatility in the region, damage to infrastructure, and the fragility of the Black Sea Grains Initiative remain points of uncertainty that will determine the volume and destination of exports able to leave the country,” the report said.
In the palm oil sector, meanwhile, Malaysian palm oil exports gained market share this year mostly due to the restrictive trade policies of Indonesia, the world’s largest palm oil producer and exporter.
“However, Malaysian exporters could not fully capitalise on global palm oil demand due to persistent issues sourcing foreign labour, resulting in a continued decline in exports in the 2021/22 marketing year,” the USDA said.
After peaking in 2018/19, Malaysian palm oil exports dropped 15% to 15.5M tonnes in 2021/22. While exports were forecast to increase in 2022/23, Malaysia’s market share was expected to decline due to increased competition from Indonesia.
The USDA reduced its global 2022/23 oilseed production forecast by 1M tonnes to 645M tonnes, reflecting lower Argentine soyabean and Ukrainian sunflowerseed crops more than offsetting higher Australian and EU rapeseed production.
Worldwide oilseed trade was forecast marginally higher due to increased Argentina soyabean and Australia rapeseed exports, while global crushing was reduced slightly due to lower Argentine soyabean and Malaysian palm kernel processing.
Total global oilseeds stocks were up mainly due to higher soyabean stocks in China