Focus on Oils [Sunflower Oil]
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As far as sunflowers are concerned, there is an estimated increased production in Ukraine.
• UKRAINE: Sunflower oil production projections and sunflower sown areas have increased. Although exports have also been revised upwards, sunflower oil shipments were halved in the new year due to high stocks accumulated in the main importing countries.
- EU: Large sunflower oil exports in the last period continued at a fast pace, due to a high increase in seed imports and crushing activity, mainly from Ukraine (76%) and Moldova (16%). Over the past year, exports have increased by more than 40%, and more than tripled in December due to high Indian demand.
- Competition with rapeseed oil in Europe, the still wide spread use of palm oil, and increased crushing activity in several countries around the world generated pressure on quotes at the beginning of the year. Under the assumption of increased imports from Turkey and Iran (which have reduced duties on vegetable oil imports), and in particular from China (following new, less restrictive COVID-19 policies and a recovery in domestic consumption), international demand is expected to erode the high supply of recent months.
- Other bullish factors to keep an eye on this year: oil mills in Ukraine are starting to buy seed more and more aggressively, leading to the first rises in the domestic seed market; the European Union's deforestation policy, which could incentivise the use of sunflower oil for biodiesel production.
To read the full February 2023 Commodities Bulletin register here: