PRODUCTION:

Area for sunflowerseed production for 2015/16 is forecast at 1.6 million hectares, a 15 percent recovery from 2014/15 estimates. Profit margins made sunflowerseed a popular planting choice for 2014/15 and the the crop enjoys sizeable momentum going into 2015/16. Argentina boasts a strong tradition of sunflowerseed production, with production area having reached as high as 4 million hectares in its heyday. The "take-over of the soybean," excessive sunflowerseed supply depressing prices and margins, and the growing presence of Ukraine and Russia in the global production arena have tempered sunflowerseed production area over the past decade. Certain regions in the southeast and southwest of Buenos Aires province are traditional sunflowerseed production areas that are forecast to gain area from soybeans and corn. The best yields come from this region and the local producers face virtually no barriers to increasing planted area there. In 2015/16, high oleic sunflowerseed fetched significant premiums which led to profit margins that surpassed the market's expectations. Traditionally, the northwest of Argentina and Chaco province are home to 20 percent of the sunflower production area.

Since this region is at the mercy of notable weather variability, robust precipitation during planting season can essentially increase the planting area by 300,000 ha in this zone at the last minute. If this is the case, increased area planted to sunflowerseed will offset some cotton areas in Chaco province. Production is forecast at 2.9 mmt, based on average yields. Like most other sectors, the sunflowerseed sector will exit the 2014/15 crop season with high indebtedness and is forecast to invest less in 2015/16 production. High oleic varieties are forecast to occupy approximately 25 percent of the production area, a 25 percent increase from 2014/15. With high oleic varieties, farmers have had positive experiences in the field and the market.

2014/15 production area is maintained at 1.4 million hectares. 2014/15 sunflower yields appear to have rebounded very well from the impacts of adverse weather: yields are estimated at highs of 1.9 mt/ha. This estimate represents a 16 percent yield increase from 2013/14 which experienced historically-low yields. Based on the yields, Post raises its 2014/15 production estimate to 2.6 mmt.

Almost all seed genetics for sunflowerseed in Argentina are hybrids. There are no biotech seed varieties available on the market, even though there are several varieties that have been developed and require the market's blessing and regulatory review. Seed developers have successfully bred three different biotech traits for sunflowerseed: glyphosate resistance, sclerotinia resistance, and a Bt lepidoptera pest resistance.

CONSUMPTION:

Nearly all sunflowerseeds in Argentina are crushed for oil and meal, with only a very small amount exported as confectionary sunflowerseeds. Sunflowerseed oil continues to be subsidized for local consumption. The subsidies do not come directly from the government but from the soybean crushers who operate in Argentina, via an arrangement or sorts with the government. Consumption remains steady at approximately 700,000 mt per year, while the remaining oil is exported. Sunflowerseed meal is used for animal feed in the dairy and poultry sectors and is expected to grow slightly to 800,000 mt. Contacts indicate that there is ample crushing capacity and storage capacity for the sector. Post forecasts sunflowerseed crush for 2015/16 at 2.7 mmt, based on increased production. Oil production is projected at 1.15 mmt and meal production at 1.15 mmt.

In the current year, 2014/15, crush is forecast at 2.5 mmt with oil and meal production estimated at 1.06 mmt and 1.09 mmt, respectively, in line with official USDA estimates. Crush for 2013/14 is estimated at 2.25 mmt, in-line with official USDA estimates.

Sunflowerseed meal has very slim to no profit margins. For that reason, sunflowerseed oil continues to drive the crushing industry.

TRADE:

A small amount of confectionary sunflowerseeds are exported to the EU, Mexico, Brazil, Algeria, Colombia, and several other markets for a total quantity around 50,000 MT. Argentina has historically been the world's third largest exporter of sunflowerseed oil, behind Ukraine and Russia. In 2014, Argentina lost some market share for sunflowerseed oil exports, accounting for only four percent, while Ukraine accounted for 60 percent, and Russia for 19 percent.

As a niche market, sunflowerseed exports are forecast steady at 80,000 mt. Sunflowerseed oil exports are forecast a rebound at 500,000 mt, a significant 40 percent increase from 2014/15 based on a larger available supply from augmented production and crush. Sunflowerseed meal exports are forecast at 300,000 mt. The slight bump is also due to the increased sunflowerseed production and crush.

For 2014/15, Argentina's sunflowerseed oil exports were less than the market expected, estimated at 350,000 mt. From 2013/14 to 2014/15 Argentina increased its crush but its sunflowerseed oil exports remained flat.

It is estimated that 20 percent of the 2014/15 crop was contracted on the futures market. In general, the local sunflowerseed and derivatives market is characterized by few actors and few transactions. This has led to a lack of transparency and predictability in the market.

For 2013/14, sunflowerseed exports are held steady at 75,000 mt. Sunflowerseed oil and meal exports are held to 350,000 mt and 250,000 mt, respectively. Overall, 2013/14 sunflowerseed and derivative exports fell short of market expectations, due to a shorter supply and the growing competition from Ukraine and Russia.

STOCKS:

Beginning stocks (mt) for 2013/14:

Ministry of Agriculture

USDA Official

Sunflowerseed

260,000

760,000

Estimated beginning stocks for (mt) for 2014/15:

Ministry of Agriculture

USDA Official

Sunflowerseed

580,000

652,000

Historically, sunflowerseed is not held in stocks as a type of savings like soybeans are. For one, it is harder to store in silobags, two, the seeds don't keep as long and three, it takes up a lot of space. After closing out crush and export numbers form 2013/14, stocks are high, at 771,000 mt, or about one third of total production. Industry contacts believe that these stocks are already held with the industry and not in producer's hands.

POLICY:

Export licenses and taxes

The ex National Agricultural Trade Control Agency (ex-ONCCA) regulates agricultural exports in Argentina and requires exporters to solicit export registrations (ROEs). Approval of ROEs is generally automatic for oilseeds and there are two different embarkation periods, either 45 or 180 days, depending on when the exporter pays the required export tax. If paid within five days of soliciting the ROE, the exporter is granted an embarkation period of 180 days. If paid at the time of export, the exporter is granted a 45 day embarkation period. Export taxes on oilseeds are as follows:

Sunflowerseed 32%

Sunflowerseed Oil 30%

Sunflowerseed Meal 30%

Oilseed, Sunflowerseed

2013/2014

2014/2015

2015/2016

Market Begin Year

Mar 2013

Mar 2014

Mar 2015

Argentina

USDA Official

New post

USDA Official

New post

USDA Official

New post

Area Planted

1,300

1,315

1,400

1,400

0

1,600

Area Harvested

1,300

1,315

1,400

1,400

0

1,600

Beginning Stocks

1,018

1,018

760

771

0

763

Production

2,100

2,100

2,500

2,600

0

2,900

MY Imports

2

8

2

2

0

2

MY Imp. from U.S.

0

0

0

0

0

0

MY Imp. from EU

0

0

0

0

0

0

Total Supply

3,120

3,126

3,262

3,373

0

3,665

MY Exports

80

75

80

80

0

80

MY Exp. to EU

20

20

20

20

0

30

Crush

2,250

2,250

2,500

2,500

0

2,700

Food Use Dom. Cons.

0

0

0

0

0

0

Feed Waste Dom. Cons.

30

30

30

30

0

30

Total Dom. Cons.

2,280

2,280

2,530

2,530

0

2,730

Ending Stocks

760

771

652

763

0

855

Total Distribution

3,120

3,126

3,262

3,373

0

3,665

1000 HA, 1000 MT

Oil, Sunflowerseed

2013/2014

2014/2015

2015/2016

Market Begin Year

Mar 2013

Mar 2014

Mar 2015

Argentina

USDA Official

New post

USDA Official

New post

USDA Official

New post

Crush

2,250

2,250

2,500

2,500

0

2,700

Beginning Stocks

515

515

415

415

0

403

Production

950

950

1,060

1,060

0

1,150

MY Imports

0

0

0

0

0

0

MY Imp. from U.S.

0

0

0

0

0

0

MY Imp. from EU

0

0

0

0

0

0

Total Supply

1,465

1,465

1,475

1,475

0

1,553

MY Exports

350

350

375

350

0

500

MY Exp. to EU

100

100

115

115

0

150

Industrial Dom. Cons.

2

2

2

2

0

2

Food Use Dom. Cons.

678

678

700

700

0

700

Feed Waste Dom. Cons.

20

20

20

20

0

20

Total Dom. Cons.

700

700

722

722

0

722

Ending Stocks

415

415

378

403

0

331

Total Distribution

1,465

1,465

1,475

1,475

0

1,553

1000 MT, PERCENT

Meal, Sunflowerseed

2013/2014

2014/2015

2015/2016

Market Begin Year

Mar 2013

Mar 2014

Mar 2015

Argentina

USDA Official

New post

USDA Official

New post

USDA Official

New post

Crush

2,250

2,250

2,500

2,500

0

2,700

Beginning Stocks

197

197

162

162

0

192

Production

980

980

1,090

1,090

0

1,150

MY Imports

0

0

0

0

0

0

MY Imp. from U.S.

0

0

0

0

0

0

MY Imp. from EU

0

0

0

0

0

0

Total Supply

1,177

1,177

1,252

1,252

0

1,342

MY Exports

250

250

280

280

0

300

MY Exp. to EU

200

200

220

220

0

250

Industrial Dom. Cons.

0

0

0

0

0

0

Food Use Dom. Cons.

0

0

0

0

0

0

Feed Waste Dom. Cons.

765

765

780

780

0

800

Total Dom. Cons.

765

765

780

780

0

800

Ending Stocks

162

162

192

192

0

242

Total Distribution

1,177

1,177

1,252

1,252

0

1,342

1000 MT, PERCENT