Sunflowerseeds Processing in Ukraine: special features of the season 2021/2022

      – Sunflower harvesting campaign in active phase: 10.91 mmt were harvested at the beginning of the week.

     – Every season, there are “speculative”  talks based on the quality the first harvest of sunflowers. But  the first sunflower is most often wet as it is usually harvested unripe, with an unfilled kernel and it is no indicator of the bulk yield of the crop in the country.

    – Today the new crop sunflower in Ukraine is offered at a price above UAH 18,000 (incl. VAT) per ton. It’s hard to tell whether last year’s scenario will repeat itself, whether the price will reach UAH 25,000 per ton, but everything can be …

    Transnational companies  and large processors (Bunge, Cargill, Viterra, COFCO, Delta Wilmar) control the market as they form the backbone of demand. They can afford a steady strategy, sometimes even work at a loss, but never drop out of the market, and ensure a stable utilization of production capacities.

     – The harvest is expected to be large, therefore, most likely, there will be no problems with production capacities. If you suddenly do not have enough capacity, you can always work with other plants on a tolling scheme.

     – It is difficult to determine precisely what share of sunflowers in Ukraine is sold under forward contracts this year. According to various estimates there are about 15%. This amount is significantly lower than it was in previous seasons: many plants learned the lessons of the 2020/2021 defaults. Now verification of counterparties has intensified, and contracts are concluded with the most reliable ones.

    – Most often, 40-60% of the new crop is sold before the New Year. By tradition, a large volume of oilseed is sold in October and December (as many companies seek to fulfill their obligations at the end of the calendar year). And since January, everyone who can hold back the sale of sunflowers does so, while those who can’t are selling. There is a shortage of sunflower supply on the market, and when a certain amount of sunflower is offered for sale, processors and traders swoop fast.

    – Logistics: it is more difficult to find grain trucks this season. The cost of transportation increased: the growth of tariffs for railway transportation and the cost of vehicles (+ 40-50%).

    – Hypervolatility of world markets: sharp fluctuations in demand and prices for oilseed products. Usually, if vegoil goes up in price, then sunflowerseed adds less than half of this value. That is, if a ton of vegetable oil rises in price by USD 50, then the corresponding increase in the price of raw materials is about USD 21.

    We wish you a good harvest and productive deals!

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