From September 2022 to August 2023, Ukraine exported 5.6 million tonnes of sunflower oil, which is 25% more than in the previous season, the Ukroliyaprom Association for Extraction and Processing of Fat and Oil Products reported.

The Black Sea grain corridor worked most of the marketing year, but exports by land were also prominent last season and accounted for about 23% of total exports, and in recent months the focus of exporters has shifted to the ports of the Danube.

Sunflower oil exports

According to the European Commission, Ukraine increased its share in total imports of sunflower oil by EU countries in September-August of the 2022-23 season to approximately 89% against 82% last season.

At the same time, the distribution of export volumes of sunflower oil between the main buyers changed, with the EU countries now being the main buyers.

Turkey more than tripled its purchases of Ukrainian sunflower oil to 1.1 million tonnes in the 2022-23 season, increasing its share to 19.2%, Ukroilprom data shows.

China’s sunflower oil purchases in the reporting season increased by 80% to 636,800 tonnes, while China’s share in Ukrainian sunflower oil exports increased to 11.3% versus 7.9% in the 2021-22 season.

At the same time, exports to India fell by 41% to 612,700 tonnes, while India’s share of Ukrainian sunflower oil exports fell by more than half to 11%.

Sunflower oil exports peaked in March 2023 and flows remained strong in subsequent months, despite significant sunflower seed exports in the first half of the marketing year as farmers prioritized export sales due to more competitive price levels.

Ukrainian processors were not always able to offer a competitive price due to uncertainty, for example, when processing capacity was idle due to power outages throughout the country and demand and prices for sunflower oil were unstable.

The outbreak of war in Ukraine and the blockage of ports meant sunflower was aggressively sold for export and the main buyers of Ukrainian raw materials were EU countries, while demand for sunflower from local European farmers fell sharply, leading to dissatisfaction and protests.

In April, the five EU countries bordering on Ukraine imposed a temporary ban on the import of grain, oilseeds and other agricultural products from Ukraine.

Sunflower seeds and meal exports

Exports of sunflower seeds since the beginning of the new marketing year amounted to 1.85 million tonnes, or 14% more than last year, while the bulk (1.7 million tonnes) was exported before the ban was introduced.

The share of meal and cake in Ukrainian exports increased by 27% year on year to 4.2 million tonnes.

The three main buyers of Ukrainian sunflower meal and cake remained unchanged: China, the EU and Turkey, with a slight adjustment in export volumes.

China bought 1.72 million tonnes of Ukrainian sunflower in the 2022-23 season, which is 15% higher than last year.

Turkey reduced purchases of Ukrainian sunflower meal by 66% to 188,000 tonnes while the EU share remained virtually unchanged at 34-37% of the total volume.

Egypt meanwhile doubled its purchases of sunflower meal in the 2022-23 season to 105,000 tonnes.

Finally, soybean exports more than doubled year on year to 3.1 million tonnes.

View our veg oils and meals prices.

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According to the US Department of Agriculture’s August World Agricultural Supply and Demand Estimates (Wasde), the 2023-24 sunflower harvest in Ukraine, Russia, and Moldova will be 33.3 million tonnes, which is 7.6% higher than a year earlier.

In Bulgaria and Romania, the main sunflower producers in the EU, the increase in sunflower crops will be almost 14% taking it to 4.8 million tonnes and in Moldova about 680,000-750,000 tonnes, according to the latest estimates of the European Commission.

Ukrainian crops

Estimates of the sunflower harvest in Ukraine differ significantly between official and market sources.

According to the August estimates of the Ministry of Agricultural Policy, the sunflower crop is expected to decline by 879,000 to 12 million tonnes.

Analytical agencies estimate the sunflower harvest in the range of 13.2-13.7 million tonnes, meanwhile.

The increased estimates are based on an average 6% increase in planted area to 5.7 million hectares and an average yield increase of 2.3-2.43 tonnes per hectare.

At the same time, the estimates of companies active in the sunflower market vary considerably, by as much as 2 to 4 million tonnes.

The average estimate of analysts at Ukrainian companies is 12-14 million tonnes, while the estimate of the sown area does not exceed 5.5 million hectares.

The highest market estimate for the 2023 sunflower harvest is 14 million tonnes, and the lowest is 9-10 million tonnes.

The main reason for this is the difference in estimates of sown areas, as well as the weather, according to market participants.

The highest yield estimates are based on favorable weather conditions during the sunflower ripening period and an expected increase in yield and planted area.

As for prices for the new sunflower crop, they are in the range of UAH15,000-15,000 per tonne ($405-410 per tonne) including VAT CPT crushing plant, which is in line with prices for the old crop.

Russian crops

Despite the fact that Russian analytical agencies and official data suggest a decrease in sunflower acreage, the sunflower crop is expected to be almost 2% above the 2022 level of 16.4-16.6 million tonnes.

The biggest sunflower harvest estimates for the new 2023/24 season are shown by the USDA at 17.5 million tonnes, which is more than 7% higher than last year.

Prices for the new crop are so far lacking, as high stocks have led to a focus on shifting the old crop first.

Turkish crops

Turkey expects a decline in this year’s crop due to a decrease in planted area in favor of wider wheat planting, according to some sources, as well as due to a reduction in yields, according to other sources.

In addition, according to some sources based in Turkey, heat damage to the crop is likely to affect the final gross harvest.

Sunflower harvest estimates are 21% lower than last year at 1.5 million tonnes, according to market estimates.

The USDA expects Turkey’s sunflower harvest to be 1.65 million tonnes, down 13% from last year.

The sunflower harvest in Turkey started about two weeks ago, according to market data.

New crop sunflower prices are strengthening as the harvest progresses, driven by an expected decline in the overall crop.

“When the harvesting started the local sunflower seed price was around TRY10,500 per tonne, now it has become TRY13,500-14,000 per tonne or around $535 per tonne,” a source based in Turkey told Fastmarkets Agriculture.

“Prices for small batches of sunflower reached TRY15,000 per tonne or $555 per tonne this week with delivery to the plant,” another source based in Turkey, said.

Romanian and Bulgarian crops

According to the European Commission, the total sunflower harvest in Romania and Bulgaria will be close to 4.8 million tonnes, which is almost 14% higher than last year.

At the same time, the European Commission has reduced its estimate of sunflower acreage in Bulgaria by almost 8% to 846,000 ha, while maintaining an expected yield of 2 tonnes per hectare.

Market sources suggest that sunflower cultivation areas in Bulgaria reported by the European Commission are underestimated by some 950,000 hectares.

The estimated increase in sown area was due to a lower corn acreage.

According to some sources based in Bulgaria, the total sunflower harvest will be 4.5 million tonnes, of which 1.8 million tonnes will come from Bulgaria and about 2.7 million tonnes from Romania, as dry weather affects crops.

In addition, sunflower harvesting in Bulgaria has already started, with prices for the new crop being almost on par with the old crop.

“Old and new crops are already at the same price – within $425-430 per tonne with delivery to the crush plant,” a Bulgarian broker told us.

Romanian crushers are currently priced at $415-420 per tonne with delivery to the crushing plant.

“Sunflower harvesting started about a week ago in the southern regions,” a source based in Bulgaria said.

“Some northern regions started harvesting this week.”

According to the USDA’s August estimates, global sunflower production will increase in the 2023-24 season by 6.5% to 55.8 million tonnes.

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Sunflower oil prices fell by an average of 4-4.5%, according to market sources, with prices for Sunoil FOB Six Ports in Europe and Black Sea sunflower oil falling by $35 per tonne and $60-80 per tonne on average.

Offers on a CIF Mersin basis fell to $820-840 per tonne from $900 per tonne CIF Tuesday.

At the same time, prices for Sunoil FOB Six Ports fell during the day to end at $925 per tonne against $900 per tonne FOB for loading in July, August and September.

Rapeseed oil was also quoted lower, with increased supply and prices falling by, on average, €30 per tonne per day to €910 per tonne against €890 per tonne FOB Rotterdam.

CME soybean oil futures hit limit down during the overnight session on the back of the leaked reports that the EPA had approved RFS requirements lower than the market expectations.

Industry reaction

“The amount of EV RIN abandoned has not been allocated to biomass biofuel mandates, nor has there been an increase in ethanol-based biofuels,” Anilkumar Bagani, head of research at Mumbai-based vegetable oil broker Sunvin Group told Fastmarkets Agriculture.

Others meanwhile suggested the market had become overheated after the EPA delayed its decision from last week to this weak, while concern about dry weather’s effect on US crops fuelled price rises.

“The Chicago bean oil futures bubble became too big and the announcement numbers were below expectation, resulting in the price decline,” Sergey Repetsky, managing partner of Sunstone Brokers SA said.

“The delay of the EPA decision and weather concerns had overheated the veg oil market,” he added, saying it remained to be seen whether the falls would be sustained.

“Whether the supply side is tight or not, we will see in the coming days, this price decline will push sellers to move volumes,” he said.

Some market participants believe the sharp selloff in soy oil futures will continue, while others believe selling through pressures should be less severe.

“Commercials believe soy oil futures will quickly trade below 50 c/lb,” Charles Sernatinger of Marex Capital told us, adding the leaked expectations for EPA’s RVO announcement discussed over the previous days were unrealistic.

On the other hand, Terry Reilly from Futures International said further price declines should be less intense.

“Looking at the September contract, the trade ran the market up late last week, only to give back a large amount of that gain today,” Reilly said.

He added that further downside is on the radar but not to the extent seen back in December when another leak in EPA’s RVO announcement pulled soy oil prices steeply lower for an extended period.

Some market participants meanwhile said the price cut was expected even without the EPA report.

“On the way up, prices were very nominal without liquidity and price moved overdoing it somehow,” said a trader based in Switzerland.

“Now with the external rally taking a break Six Port prices are losing a bit of the nominal premium built in recent days.”

“Further soy oil prices had a steep upside run recently, hoping the substantial increase in the EPA final rule and the prices rose above the competing feedstocks in the US Markets and now need to adjust lower to remain competitive,” Sunvin’s Bagani told Fastmarkets Agriculture.

Last week, Sunoil FOB Six Ports and the Black Sea sun oil prices skyrocketed by $60-90 per tonne on average over the week to $995 per tonne against the buyer’s idea of $930 per tonne FOB under pressure from higher CME futures.

The sharp backdrop in soy oil futures in Chicago also spilled over into South American cash markets.

At the time of publication, soy oil premiums had lifted only mildly in the region compared with the steep plunge in futures, with brokers saying the market was mostly halted with players digesting sharply lower benchmark prices.

For more information, take a look at our biofuels prices page.

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Sunflower oil exports

The weekly volume of sunflower oil declared for export jumped by 47% from the previous week and reached 104,955 tonnes.

That has pushed total sunflower oil exports since the beginning of the 2022-23 marketing year in September to 3.5 million tonnes, up 11% year-on-year.

Turkey was the primary buyer taking 34,129 tonnes of sunflower oil during the reporting week, closely followed by China with 29,640 tonnes, Romania (16,322 tonnes), Poland (6,855 tonnes), and finally, the Netherlands (5,451 tonnes).

Market sources suggest overall demand is likely to be sluggish for the next few weeks, as buyers have mostly covered their short-term needs, which could result in further downward pressure on sunflower oil prices unless any significant macroeconomic or geopolitical events occur to change the market dynamics.

“Turkey is very well covered. We have already bought more than what is actually needed. Therefore, I guess consumer demand will be dull in the near future. Also, the pipeline in other major destinations such as China and India seems to be healthy,” said Yılmaz Cakabey Aytug from Naragro.

Sunflower seed exports

The weekly volume of sunflower seeds registered for export increased by 78% however remained at a year low of 7,601 tonnes, with almost the entire volume again booked by Turkey (3,856 tonnes) and Romania (3,382 tonnes).

During the week, were heard about trades for sunflower seeds $495-$502 per tonne CIF Marmara.

The cumulative volume since the start of the 2022-23 marketing year in September 2022 was virtually unchanged at 1.8 million tonnes.

Sunflower meal exports

Sunflower meal exports during the reporting period tripled to 86,232 tonnes, with more than half of the volume destined for China at 51,716 tonnes, followed by Turkey at 9,855 tonnes and Poland at 9,184 tonnes.

The cumulative volume since the start of the 2022-23 marketing year in September 2022 has now reached 2.77 million tonnes, up 5% with exports for the same period in 2022.

Finally, weekly soybean exports doubled to 58,437 tonnes, with the lion’s share booked by Egypt (32,878 tonnes), followed by Romania (9,602 tonnes), Turkey (7,000 tonnes) and Germany (4,357 tonnes).

That pushed the total volume of soybeans exported since September 1 to 2.6 million tonnes, a 2.6-fold increase from the same period of 2022.

Note: The data was provided by the Ukrainian customs authorities and shows the goods that have been declared for export, but the figures do not always correspond to the volumes that physically left the country during the period.

For more information on the current oilseeds market, take a look at our dedicated page for oilseed prices.

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Moves by a number of EU countries to curb the import of oilseeds of Ukrainian origin put pressure on the volume of export flows from Ukraine.

Sunflower seeds exports

Sunflower seed exports in the reporting period fell by more than 21% compared to the previous week and to a year low of 4,586 tonnes.

The main export destinations for Ukrainian sunflower seeds in April were Romania, with a share of 17,770 tonnes and Bulgaria, with a share of 7,866 tonnes.

The total volume of Ukrainian sunflower seed exports since the beginning of the 2022-23 season has reached 1.8 million tonnes.

Sunflower oil and meal exports

Exports of sunflower oil in the week to April 26 amounted to 79,603 tonnes, which is 78% higher than a week earlier.

The total volume of exports of sunflower oil from Ukraine from September 2022 to the reporting date amounted to 3.46 million tonnes.

The main export destinations for Ukrainian sunflower oil in April were Turkey (101,997 tonnes), China (79,838 tonnes) and Romania (75,278 tonnes).

Weekly exports of sunflower meal increased by 39% compared to the previous week to 78,503 tonnes, bringing the total since the beginning of the season to 2.73 million tonnes.

China, with a share of 91,384 tonnes, and Morocco, with a share of 43,439 tonnes, were the main buyers of Ukrainian sunflower meal in April.

Finally, soybean exports in the reporting period amounted to 30,774 tonnes, which is more than 17.5% higher than last week.

Since the beginning of the 2022-23 season, soybean exports from Ukraine have increased to 2.47 million tonnes.

The bulk of Ukrainian soybean exports in April was supplied to Egypt (31,214 tonnes), Turkey (31,2014 tonnes) and the Netherlands (26,617 tonnes).

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Nevertheless, the announcements seemingly end a period of weeks of negotiations and a late effort on the part of Russian authorities to cut the agreement’s duration in half to just 60 days.

Market rumors that there would be an agreement had been growing stronger in the last few days as the deadline for agreeing on any extension loomed.

Ukrainian authorities confirmed that the Black Sea grain initiative agreement would be extended for another 120 days via a statement on the official website of the Ukrainian ministry of Infrastructure, adding that Ukraine is thankful to partners for “sticking to the agreements”.

However, the announcement was accompanied by confirmation that an agreement had been reached, but the duration was notably absent.

Disagreement on agreement’s duration

Russian media and authorities, including Maria Zakharova, the head of the information and press department at the Russian foreign affairs ministry, have claimed the agreement was for 60 days.

Ukraine has argued that such a change would effectively mean changing a central tenet of the existing deal and would consequently necessitate an entirely new agreement, which all parties would have to agree to.

Under the Ukrainian extension, the next deadline for the deal would be set for July 17, right at the beginning of the new Black Sea crop marketing year.

If confirmed, the extension of the agreement for a second time brings improved clarity to exports of Ukrainian agricultural produce. Still, the renewed agreement once again focuses minds on challenges caused by the slow inspection pace at Istanbul.

“The main challenge is to speed up inspections in Turkey. This will allow the world to get even more Ukrainian agricultural products. We are also continuing our work on adding the Mykolaiv region ports to the Grain Initiative and expanding the cargo nomenclature,” the note said.

“Ukraine was, and remains, firmly embedded in the world economy and markets. The ability to export more will allow removal of inflationary risks, and as a result, social tension in many countries of the world,” it also said.

Despite the tone, there was no official note on the topic from the UN at the time of publication, and only limited comment from Turkey and Russia, with the Turkish president, Recep Tayyip Erdoğan, confirming an agreement had been reached but skimping on further details.

The announcement comes just days after a Russian official said that the country was prepared to agree to an extension of the deal, but only for 60 days.

That would have meant a significant change to the initial agreement, with Vasiliy Nebenzya, the permanent representative of Russia in the UN, quoted as saying that the deal was not being fulfilled in the way Russia had expected it to be.

He argued that a shorter window would give Western powers 60 days to eliminate all the sanctions related to agriculture exports from Russia, with fertilizer exports being one of Russia’s key complaints.

However, wheat exports have racked up an impressive pace in recent weeks as the country chows through a huge domestic wheat crop that has been estimated at over 100 million tonnes.

Exports and logistics

Prior to the announcement, and paradoxically to Russian demands, Ukrainian authorities had been calling for the deal to be extended for a full year or even an indefinite period, arguing that it would make it easier to plan export bookings and logistics.

Ukrainian authorities were also pushing for an increase in the number of inspection teams available in Istanbul, as well as pushing for the cancellation of the requirement to inspect vessels leaving Ukrainian ports and adding the liberated port of Mykolaiv to the agreement.

Since the start of the war in February 2022, Ukraine’s monthly agriculture export has recovered and been able to hit up to 6 million tonnes per month of exports, with the three re-opened deep sea ports (Odesa, Chornomorsk, and Pivdenniy) augmented by flows from shallow water ports along the Danube river.

Truck and rail deliveries across the border and into neighboring EU nations have also increased.

However, the addition of Mykolaiv and Ochakiv ports could make it possible to increase Ukraine’s monthly export capacity to 8 million tonnes – although industry representatives were not optimistic about such changes and only expected the usual extension of 120 days.

Since the start of the shipments within the agreement, Ukraine has shipped 25 million tonnes of agriculture products, according to UN data, while the biggest receiver so far was China, followed by Spain and Turkey.

While Ukraine also continued supplying agriculture products within the Grain from Ukraine initiative to the low-income countries within UN World Food Program tenders.

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From April 1, 2023, the import duty will increase from zero to 5.5%, at the same level as soybean oil, in a move that is likely to halt imports under the current TRQ allowance.

Paradoxically, the decision is likely to support prices for spot volumes of sunflower oil across major origin countries as traders look to push volume in ahead of the change, market sources said.

“Sunflower oil prices at origins, up to at least the first half of March, may find some support as importers still have unutilized TRQ quota for 2022-23 and would try to get the benefit of it,” Anilkumar Bagani, research head at Mumbai -based vegetable oil broker Sunvin Group, told Fastmarkets Agriculture.

“This may lead to an increase in spot sunflower oil loading demand but could also put more pressure on FOB Black Sea loading for April-June. Imports with a BL date prior to March 31 can still take advantage of the benefits, which could lead to a faster depletion of local oil stocks. Restrictions on vessel age lower than 25 years may also increase freight rates, thus placing additional pressure on origins,” Vivek Pathak, director of Athena Tradewinds Pvt told us.

At the same time, the decision will put pressure on the sunflower oil market with shipments in later months and reduce its competitiveness in terms of soybean and palm oils.

As a result, the sunflower oil market in the Black Sea region, with shipments in the second quarter, which has been in a downward trend for the past few weeks, will be under even greater pressure.

“The sunflower oil prices for April onward shipments shall be seen under pressure due to lack of fresh demand then as the February-March India arrivals shall be substantially huge,” added Bagani.

Veg oil demand and imports trend

In January, India set a monthly record for the import of 459,000 tonnes of sunflower oil, more than twice the volume of imports in December, trading sources said.

India is the largest importer of vegetable oils, in particular sunflower, in the world.

According to Sunvin Group estimates, India’s imports of vegetable oils from November 2022 to October 2023 will be 15 million tonnes, up 6.4% from a year earlier for the same period, while imports of sunflower oil will increase by 33% to 2.55 million tonnes.

India’s demand for sunflower oil is about 2.5 million tonnes per year, or around 200,000 tonnes per month, according to The Solvent Extractors’ Association of India (SEA).

According to February USDA estimates, India is expected to increase palm oil imports by 12.5% to 9 million tonnes in 2022-23, sunflower oil by 5% to 2 million tonnes, while imports of soybean oil will decrease by 25.5% to 3.15 million tonnes.

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Weekly exports of sunflower oil in the reporting period amounted to 175,550 tonnes, which is over 9% higher than levels recorded a week earlier.

The main destinations for Ukrainian sunflower oil in November were China, with a share of 109,709 tonnes, followed by Romania, with a share of 56,976 tonnes.

Since the start of the 2022-23 season, a total of 1.36 million tonnes of sunflower oil has been exported.

Sunflower seeds and meal exports

Weekly exports of sunflower seeds decreased by 6.5% to 94,813 tonnes, compared with last week, bringing total sunflower exports since the beginning of the 2022-23 marketing year to 770,734 tonnes.

More than 86,000 tonnes of Ukrainian sunflower products were intended for delivery to Romania, while for Bulgarian buyers, the volume of Ukrainian sunflower products came to around 68,379 tonnes, according to official data.

Weekly exports of sunflower meal fell by more than 67.5% to 46,989 tonnes due to a lack of supply from local producers.

The main buyers of Ukrainian sunflower meal in November so far are China and Poland, with shares of 125,858 and 63,945 tonnes, respectively.

Rapeseed exports

The export of rapeseed in the reporting period from November 14 to November 21 exceeded levels recorded a week earlier by more than 2.3 times and amounted to 173,625 tonnes, resulting in total exports from the beginning of the season to 2.7 million tonnes.

The lion’s share of Ukrainian rapeseed was claimed by Germany (96,228 tonnes) and Romania (88,949 tonnes), followed by Poland (66,332 tonnes).

Weekly exports of soybeans in the reporting period fell by 51.5% compared with the previous week to 58,312 tonnes.

The main export destinations for Ukrainian soybeans in November were Turkey (83,361 tonnes) and Romania (41,663 tonnes), followed by Egypt (27,864 tonnes).

Since the beginning of the 2022-23 season, Ukrainian soybean exports amounted to 725,213 tonnes.

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Fastmarkets’ APM-26 Rapeoil FOB Dutch Mill Rotterdam was assessed €1,287.5 per tonne for January loading on Thursday, November 17, down €18 per tonne on the previous day and down €110 per tonne since the beginning of November.

So far this year, rapeseed oil prices have fallen by over €830 per tonne FOB from a peak of €2,120 per tonne recorded on May 23, as a higher-than-expected rapeseed crop in Europe this season eased tight availability seen before the crop harvest.

Furthermore, a record-high rapeseed crop for the upcoming season in Australia, from which the EU (according to EU data) imports 52% of its total requirements, has further relieved the pressure on rapeseed oil prices.

Sunflower oil prices

Meanwhile, the Sunoil FOB Six Ports assessment for January loading was valued at $1,305 per tonne FOB on November 17, shedding $50 per tonne since the start of the month.

“This week, so far, global veg oil markets experienced a sell-off in expectations that the Black Sea Grain Corridor deal will be extended, and it finally happened today,” Anilkumar Bagani, research head at Mumbai-based vegetable oil broker Sunvin Group, told Fastmarkets Agriculture.

“Although the markets have mostly priced in for the outcome, the resumption of Ukrainian Sun oil offers, due to clarity over the corridor, would push the prices further down,” Bagani added.

But, despite the news, prices for sunflower oil in Ukraine were practically unchanged. The market lacks clarity on how the corridor will work in the future and whether the port of Mykolayiv will be included.

According to market sources, long cargo inspection delays have slowed operations through the corridor, but if the inspection process is accelerated, prices are expected to fall.

There is currently vessel congestion in Istanbul. The pace of inspections for outbound and inbound cargoes is set at a target of around ten vessels per day, but the actual rate is much lower.

The extension of the grain corridor was announced on Thursday, November 17, in an official notice from the Ukrainian ministry of infrastructure, which stated that the “Initiative for safe transport of agricultural products across the Black Sea is extended for another 120 days”.

Since the beginning of the 2022-23 season, exports of sunflower oil from Ukraine have exceeded 1.2 million tonnes, according to the Ministry of Agriculture and Food of Ukraine.

For more information on the current veg oils market, take a look at our dedicated page for vegetable oil prices.

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Alongside the interruptions to power and water supplies, traders also pointed out that constant uncertainty around the operation of the grain corridor was another factor that would likely bring challenges for the crushing sector.

Ukraine-based sources suggest that the reduction in processing could be anything from 28% to as high as 44% affecting demand for between 8-11.5 million tonnes of sunseeds per season, according to various estimates.

The figure could depend on the degree of damage, any energy savings undertaken by crush enterprises and the ability of enterprises to autonomously provide electricity to power production.

According to APK-Inform, the average sunflower seed processing volume for the three seasons preceding the 2021-22 season was 14.7 million tonnes.

However, market sources said it is virtually impossible to estimate how much processing could be lost since new attacks could damage even more power plants and lead to further blackouts and problems with water supply.

“In the event of large-scale power outages, the water supply also disappears. The plant cannot operate without water,” a crusher in the Odesa region told Fastmarkets.

At the same time, crushers, in addition to the planned reduction in electricity consumption, are trying to deal with energy problems in alternative ways.

Crushers being affected

In general, the country’s crushers divide into three groups in terms of energy difficulties and ways to solve them.

The first group consists of a number of plants that have experienced power outages and rolling blackouts after electricity providers were forced to reduce electricity consumption by 25-30% after massive missile and drone attacks on energy infrastructure through the second half of October.

The second group covers the largest sunflower crushers, many of which have their own generating turbines or crushers that have their own power stations.

Such plants are usually independent of the supply of electricity, which allows such plants to be autonomous from the general energy supply.

The final groups are plants that have reduced their electricity consumption by an average of 25-30% and are planning to install powerful generators in case of future power problems or reduce electricity consumption by stopping processing at night and doing most of the work during the day.

In most cases, the net impact will be to limit production.

“As a result, there will not be enough oil for the contracts in the first place,” the Ukraine-based trader said.

According to APK-Inform analysts, a reduction in sunflower processing in the 2022-23 season is expected to reach 10.3 million tonnes, which will lead to a decrease in the production and export of sunflower oil to an average of 4.5 million and 4.1 million tonnes, respectively.

Click here to access our data analysis and gain better insights into soybean crushing trends and margins.

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