Black Sea sunflower oil market challenged in 2022 as farmers hold back sunseeds sales

27 December 2021, 14:47

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The Black Sea sunflower oil market faces challenges in 2022 as farmers hold onto seed stocks in the first half of the year, but record sunflower oil production is still expected, S&P Global reports.

India — one of the main global importers — is set to increase their vegetable oil imports to 14 mln t in the marketing year of 2021-2022, largely driven by sunflower oil. Sunflower oil imports are expected to rise to 2.4 mln t in 2021-22 from an estimated 1.88 mln t in 2020-21, resulting from steep cuts in import duties and improving global production. India has reduced import taxes on edible oils on multiple occasions over the course of 2021 to combat rising international prices.

Initial estimations for the sunflower harvest in Ukraine were not promising, as expectations arose of a reduction in the forecast yield caused by a hot, dry summer in the Black Sea region will dampen further supply in the market. Despite this, a record 7.1 mln t of sunflower oil is expected to be produced in Ukraine in 2021-2022, up 23% from 2020-2021. Resulting from the rebound in prices in 2021, it is expected that in general area planted will be kept high as prices continue to remain resistant to bearish factors.

Learn more: Harvest Online 2021: production season finalized in Ukraine

"Following a bullish year in the European crude palm oil market — as prices have increased from $1045/mt to record highs of $1377.50/mt — market participants have expressed prices may not ease until the end of the first quarter, resulting from an unresolved labour shortage in Malaysia in combination with high duties in rival producer Indonesia," the report reads.

The European palm oil market will depend on whether labour shortages, COVID-19 restrictions and weather patterns impact supplies available from major suppliers in Asia.

The Association Ukroilprom projects sunflower oil production in Ukraine 24.1% up YoY in 2021/22 (Sep-Aug).