Sunflower seed production in Ukraine, the world’s top grower, will fall back next season, as farmers are forced to rotate crops after the “exceptional” sowings for the last harvest, US officials said.
The US Department of Agriculture’s bureau in Kiev forecast production is to fall by 2.5m tonnes, to 11.2m tonnes, thanks primarily to falling planted area, from the elevated levels seen last season.
The oilseed planted area in Ukraine in marketing year is forecast to fall down 14% year on year, to 5.2m hectares.
Back from ‘exceptional’ levels
“In the fall of 2015 farmers abstained from planting winter wheat due to decreasing domestic prices as well as unfavourable weather conditions that could have resulted high winterkill rates,” the bureau said.
This left plenty of empty hectares, which were then planted with spring sunflower.
The bureau said that given the fact that sunflower plantings have been fairly stable in recent years, barring the exceptional circumstances last season, “it can be argued that production area for this crop has reached its optimum level, dictated by crop rotation patterns”.
Need for crop rotation
“Although sunflower seeds offer the best profitability for farmers, they cannot maintain ever expanding areas due to exponential growth of production costs when crop rotation requirements are not met,” the bureau said.
It was suggested that from this point onward, planted area “will likely remain stable barring drastic changes in global demand for this crop from domestic processors or significant changes in demand for its derivative products”.
But the decrease in sunflower production will be partially offset by an 19% increase of planted area under soybeans to 2.2m hectares.
And the area planted to rapeseed is seen rising 97% year-on-year, to 899,000 tonnes, thanks to rising domestic prices.
Crushing to fall back with crop
Almost all Ukraine’s sunflower seed crop is crushed domestically, due to export duties on unprocessed seeds.
So sunflower processing, and the output of meal and oil, is expected to fall in proportion to the drop in production, after the big volumes in the current season.
Earlier this month Kernal Holdings, the world’s largest sunflower seed crusher, forecast its volumes to increase by more than 10% in 2016-17, to some 3m tonnes.
The bureau forecast sunflower oil exports in 2017-18 at 4.20m tonnes, down from 5.35m tonnes in the previous season, and at a three-year-low.
Sunflower meal exports were seen at 3.9m tonnes, down 1.0m tonnes year-on-year.
Turkish import question
The Black Sea sunflower market is currently waiting for clarity on Turkish buying policy.
Turkey appears to have stalled shipments from Russia, along with wheat and corn.
The country is the world’s second-largest sunflower oil importer, and the top buyer of Russian supplies.
Russia is the world’s second-ranked sunflower grower.
Although Ankara denies that it has effectively banned Russian supplies, import licences issue from last week no longer include Russia among tax-exempt origins, which leaves imports liable for massive tariffs.
Turkish buyers have stalled buying of Russian supplies in response to the uncertainty.