Argentina’s sunflower boom challenges Black Sea dominance in sunflower oil — ASAP Agri

The global sunflower oil market is no longer a two-player story dominated solely by Ukraine and russia. While the Black Sea region spent recent seasons grappling with war disruptions, weaker production and logistical instability, Argentina used the supply shock to rapidly expand its position in the market, Victoria Blazhko, Head of Editorial, Content and Analytics at ASAP Agri, told Latifundist.com.

Argentina accounted for roughly 7% of global sunflower oil exports in 2016/17. By 2024/25, its share exceeded 10%, and USDA forecasts it could account for 13% in 2026/27. Ukraine still controls around 33% of global exports, while russia holds about 31%, but Argentina is increasingly challenging the dominance of both Black Sea suppliers.

The shift is particularly visible in India — the world’s largest sunflower oil importer.

A decade ago, Ukraine largely dominated India’s sunflower oil imports. That changed after russia’s full-scale invasion of Ukraine disrupted Black Sea flows. russia moved aggressively to capture market share, boosting exports to India from roughly 451 KMT in 2021/22 to more than 1.66 MMT in 2023/24.

Argentina expanded alongside russia. Exports to India rose from around 380 KMT in 2021/22 to more than 515 KMT in 2023/24. In 2025/26, Argentina overtook Ukraine in the Indian market for the first time. During September-April, Argentine sunflower oil exports to India reached a record 530 KMT versus just 344 KMT from Ukraine.

Why Argentina is expanding sunflower production

Argentina’s sunflower boom has been driven by three key factors: tighter Black Sea supplies, favorable tax policy and improving agronomic conditions.

Black Sea disruptions opened the door

Supply disruptions from the Black Sea region became the main external catalyst behind Argentina’s sunflower expansion. After the outbreak of the full-scale war between russia and Ukraine, the global market faced a sharp drop in available sunflower oil supplies from its key export hub. As a result, importers — particularly India — accelerated efforts to diversify origins, opening the door for Argentina to rapidly expand its market share.

Tax cuts turned sunflower into one of Argentina’s fastest-growing crops

Domestic policy became the key structural driver behind Argentina’s sunflower boom.

The country has relied on export taxes — known locally as retenciones — for more than two decades to support fiscal revenues and manage domestic prices. During the 1990s, Argentina maintained a relatively liberal regime, with sunflower seed taxed at just 3.5% and sunflower oil and meal effectively exempt from export duties. That policy encouraged domestic crushing and exports.

The landscape changed after Argentina’s 2002 default, when export taxes surged sharply. Pressure peaked during the Kirchner administrations between 2007 and 2015, when export duties on sunflower oil climbed as high as 37%, and sunflower meal reached 39%.

High taxes made sunflower significantly less competitive than soybeans. As a result, sunflower acreage contracted by nearly 45%, while soy became Argentina’s dominant export and fiscal revenue source.

The shift began after Mauricio Macri took office in 2015 and eased pressure on the sunflower complex. Although some taxes returned under Alberto Fernández, sunflower products still faced substantially lower duties than soybeans — roughly 7-12% versus 33-35%.

Under President Javier Milei, sunflower emerged as one of the biggest beneficiaries of Argentina’s new agricultural policy. Export taxes on sunflower seed were reduced from 7% to 4.5%, while sunflower oil duties fell to around 4%. By contrast, soybean products still face export taxes above 22%.

The tax gap between the sunflower and soybean complexes now stands near 18 percentage points, potentially generating an additional 150-200 USD/MT in margins compared with soybeans, according to Argentine industry estimates. That advantage has accelerated acreage shifts away from soybeans and, in some regions, corn.

And the easing cycle is not over yet.

In May 2026, Argentina’s government unveiled a roadmap for further cuts in agricultural export taxes through 2028. Duties on sunflower seed are expected to gradually decline from the current 4.5% to roughly 3%, while sunflower oil and meal taxes could fall toward 2.5%.

The market increasingly views sunflower’s tax advantage as long-term — reinforcing expectations that the current boom is evolving into a broader structural transformation of Argentina’s oilseed sector.

Climate and better genetics put sunflower back in rotation

Climate volatility has further strengthened sunflower’s position in Argentina’s crop mix.

Analysts increasingly describe sunflower as one of the most resilient crops for drought-prone regions, offering more stable performance than corn and, in some areas, even soybeans under erratic moisture conditions.

The shift accelerated after outbreaks of Dalbulus maidis severely damaged Argentinian corn crops in recent seasons, prompting many farmers to bring sunflower back into rotation as a lower-risk alternative.

But the expansion is not only a climate story.

Over the past two decades, Argentina has significantly improved sunflower genetics, production technology and yields. Average yields, which hovered around 1.5-1.7 MT/HA in the early 2000s, have consistently exceeded 2 MT/HA in recent years. In 2024/25, average yields reached 2.33 MT/HA — among the highest levels on record.

The combination of stronger drought tolerance, improved genetics and better crop economics has made sunflower increasingly attractive even in less productive regions of Argentina.

As a result, sunflower acreage expanded from just 1.26 MHA in 2013/14 — when high export taxes and soybean dominance pushed the crop to the sidelines — to nearly 3 MHA in 2024/25. USDA projects planted area could reach 3.5 MHA by 2026/27.

From acreage expansion to a crushing boom

The impact is already visible across Argentina’s production data.

Sunflower seed output is estimated at roughly 7 MMT in 2025/26, up from 5.6 MMT a year earlier. USDA already projects production could climb further to 8 MMT in 2026/27 — more than double levels seen a decade ago, when high taxes and soybean expansion had reduced output to roughly 3-3.5 MMT.

Importantly, growth is no longer concentrated only in traditional producing areas. According to the Rosario Grain Exchange, northern Argentina produced a record 1.57 MMT in 2025/26, while central regions harvested 1.89 MMT and southern areas reached 3.16 MMT — the highest since the late 1990s.

Crushing volumes have risen sharply as well. Argentina processed around 4.8 MMT of sunflower seed in 2024/25. USDA estimates crushing could reach 5.5 MMT in 2025/26 and exceed 6 MMT for the first time in 2026/27.

A key advantage has been Argentina’s existing soybean processing infrastructure.

Rather than building a sunflower industry from scratch, the country redirected underutilized soybean crushing capacity toward sunflower processing. According to the Rosario Grain Exchange, Argentina operates 17 dedicated sunflower crushing plants, while another 11 facilities are technically capable of processing sunflower seed. Total available capacity is estimated at roughly 6.6 MMT annually.

That existing industrial base allowed Argentina to rapidly scale sunflower oil production and exports without requiring major new investment.

Still, the industry is already approaching the limits of existing capacity. If sunflower crushing in 2026/27 does exceed 6 MMT, Argentina will move close to full utilization. Any further meaningful expansion would likely require either additional conversion of soybean crushing plants or new investment in processing and logistics infrastructure.

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