European Union sunflower seed imports will soar even higher than had been expected, the European Commission said, after a rapid start to buy-ins, encouraged by cheap Ukrainian prices.
The commission lifted by 300,000 tonnes to 1.80m tonnes its forecast for the bloc’s imports of the oilseed in 2022-23, on a July-to-June basis, raising to 57% the growth expected year on year.
Imports at that level would be the second highest on data going back 21 years, behind only the 2.07m tonnes purchased in 2003-04.
The upgrade follows a rapid start to this season for EU imports, which have soared sixfold year on year to 1.44m tonnes, with a little over half of 2022-23 yet to run.
Land vs sea
Ukraine has provided the vast majority of these supplies, 1.26m tonnes, up from just 11,806 tonnes over the same period of last season.
Selling to the EU has allowed Ukrainian exporters to exploit overland or barge routes to Bulgaria and Romania, allowing Black Sea shipping capacity to be focused on grains such as corn often destined for more difference markets.
Sunflower seed has accounted for only 173,000 tonnes of the 15.0m tonnes exported, as of Friday, from Ukraine under the UN-brokered Black Sea grain initiative, as started in July.
Meanwhile, EU importers have found in Ukraine sunflower seed a ready source of competitively-priced oilseed.
Ukrainian sunflower seed exports were, as of Wednesday, priced at a two-year low of $485 per tonne, according to the European Commission.
That represents a discount of $160 per tonne to EU supplies, as measured in Bordeaux, France, and is cheaper by $100 per tonne or more to prices of soybean exports from South America or the US.
A year ago, Ukrainian sunflower seed was priced at a $75-per-tonne discount to Bordeaux supplies, and held a premium of more than $100 per tonne to Brazilian or US soybeans, on an FOB basis.
The imports have enabled a late-2022 resurgence in EU sunflower seed crushing to 481,000 tonnes last month, from a year-low of 295,000 tonnes in August, according to industry group Fediol.
The EU’s own sunflower seed production was curtailed by drought, which cut the average yield to 1.79 tonnes per hectare, the lowest in a decade, according to the commission.
Kernel Holding, historically Ukraine’s top grain exporter, two weeks ago reported “mushrooming amounts of sunflower seed exports” from the country, as it forecast that overall shipments could top 3.5m tonnes this season.
That exceeds even the record 2.45m tonnes which the US Department of Agriculture forecasts Ukraine’s sunflower seed exports reaching.