Oilseed, Sunflowerseed

2013/2014

2014/2015

2015/2016

Market Begin Year

Oct 2013

Oct 2014

Oct 2015

European Union

USDA Official

New post

USDA Official

New post

USDA Official

New post

Area Harvested

4,508

4,575

4,209

4,300

0

4,250

Beginning Stocks

787

787

800

913

0

933

Production

8,881

9,050

9,041

8,950

0

8,500

MY Imports

319

319

250

200

0

250

MY Imp. from U.S.

41

0

40

0

0

0

Total Supply

9,987

10,156

10,091

10,063

0

9,683

MY Exports

713

713

700

680

0

600

Crush

7,601

7,600

7,500

7,450

0

7,300

Food Use Dom. Cons.

310

430

320

450

0

450

Feed Waste Dom. Cons.

563

500

596

550

0

520

Total Dom. Cons.

8,474

8,530

8,416

8,450

0

8,270

Ending Stocks

800

913

975

933

0

813

Total Distribution

9,987

10,156

10,091

10,063

0

9,683

1000 HA, 1000 MT

The EU-28 continued to keep its leading position as a major producer and crusher of sunflower seeds. Key production countries are France, Romania, Bulgaria, Hungary and Spain. Planted area has been on a steady tendency to increase over the past years and is likely to stay at the current higher level in the near term or fluctuate moderately depending on the market conditions and demand for protein in the EU-28. Production has grown due to improving yields and technology over the past three years. In MY 2013/14 and MY 2014/15 it reached new records although a modest decline is forecast for MY 2015/16. Increasing demand for value–added types of sunflower seeds such as high oleic and confectionary sunflower is expected to drive the new developments in the sector in the near future.

The leading sunflower seed suppliers to the EU are dominated by Black Sea exporters, Ukraine and Russia, followed by Argentina, the United States, Moldova and Serbia. In the EU, the largest crushers are France, Spain, Romania, Bulgaria, Hungary, the Benelux and Italy.

MY 2015/16

EU-28 Sunflower seed production is forecast to decline in MY 2015/16 by an estimated 5 percent, following exceptional yields and very good production in MY 2014/15. Growth in planted area, although not significant, is expected in France, Spain and Bulgaria, while Romania sees a more significant reduction in planted areas. Hungary, Italy and the other producers project stable areas and, as a result, EU-28 total plantings are forecast to be reduced by marginal 1.2 percent compared to MY 2014/15. Due to mild winter in most countries, re-seeding of winter crops will be almost non-existent which is limiting expansion in area; in other cases, there is a forecasted adjustment in competing crops such as corn. High soil moisture levels in select regions of Romania and Bulgaria may prevent early spring planting and reduce areas further in favor of corn and/or other spring crops.

Sunflower seed production is projected at 8.5 MMT, which is 5 percent lower than in MY 2014/15 provided that weather conditions are normal and yields are at average, but below the record yields in the previous year. Currently, major producer countries expect stable (France and Italy) or declining yields (Bulgaria, Hungary, Spain) as a result of the ban on neonicotinoids or due to financial challenges (Romania, Bulgaria). Romania is the only member state which notified the EU Commission regarding the application of neonicotinoids on sunflower and corn for MY 2015/16 for a limited timeframe.

Imports are forecast to be higher in order to compensate for lower domestic supply and complement crush. The Black Sea region is likely to offer good exportable and competitive supplies and be again the traditional source of imports for the EU-28.

Following very good supply and demand for crush in MY 2014/15, the forecast is for a return to lower, more traditional levels of crush due to expected strong competition from soybeans, followed by rapeseeds. Still, the projected level of crush of 7.3 MMT is at higher level than in years prior to MY 2013/14 and only 2 percent below MY 2014/15 crush level. Major crushing countries project stable or slightly lower crush in MY 2015/16 with a few exceptions (Bulgaria, due to expanded capacities, and Czech Republic). Generally, crush is forecast to be stimulated by favorable demand for protein meals by the feed industry due to the recovery of the livestock, poultry and dairy sectors. In addition, demand for sunflower oil for food purposes is also projected to be supportive. Premium products such as high oleic oil and high protein sunflower meal are likely to generate growth in use and drive better crush margins for select producers. We anticipate very good domestic demand for both sunflower meal and oil with stable or marginally higher consumption (1.0 percent and 2.0 percent, respectively), however, in tight competition with other more price competitive protein meals and imported sunflower oil.

Lower availability and expected decline in crush, as well as good domestic demand, are likely to prevent any growth in EU-28 exports to the global market. Exports may be also limited by likely tighter competition with Black Sea sunflower seeds exporters as well as with other oilseeds on export markets. Thus, EU-28 exports are forecast to drop by 12 percent compared to MY 2014/15.

Ending stocks are projected to decrease by 13 percent to a tighter level due to lower availability and modest decline in EU-28 crush.

MY 2014/15

Current marketing year exceeded earlier expectations, sunflower seeds production was sharply upward (only 1.0 percent lower than in MY 2013/14), mainly due to exceptional yields as a result of favorable weather and despite the 6 percent drop in harvested areas. In select countries (Romania, Bulgaria, Croatia) rainfall during pollination affected quality and oil content. Despite record yields, total production is currently estimated to be still marginally below the USDA official data.

EU-28 imports are projected lower as a result of reduced exports from traditional EU suppliers (Ukraine and Russia) due to lower crops and extra high crush in these countries in the first half of the season, and due to reduced stocks and respectively export potential in the second half of the season. Other suppliers such as Serbia and Moldova which were more active in the previous marketing year reduced their exports this year. Another reason for declining imports is lower crush demand in the EU-28 as a result of less attractive crush margins, and weakening competitiveness of sunflower meal compared to other protein meals. EU-28 imports in the first quarter of MY 2014/2015 were 60 percent lower and our estimate for the year is at present under USDA official.

Crush demand in leading crushing countries has declined significantly (France, Hungary, Benelux, Germany, Spain, Portugal, Italy) while in others it was stable (Romania, Austria, Bulgaria) thus, total EU-28 crush is estimated at 2 percent lower than in the previous year. Reasons for this change are the less attractive crush margins, which lost on average about 10 Euro/MT between the fall of 2014 and the spring of 2015 due to appreciation of sunflower seed prices and the drop in the sunflower oil and meal prices. The prospects are for overall 5-10 Euro/MT lower crush margins for this marketing year compared to MY 2013/14. Sunflower seeds have to compete for crush with abundant rapeseeds crop. In addition, in the first quarter of MY 2014/15, sunflower meal was less price-competitive relative to other meals, especially versus rapeseeds meal compared to a year ago. Regarding sunflower oil, although it lost substantially in price compared to the previous season, it still remained the most expensive relative to soy oil and rapeseeds oil. Current crush estimates are slightly under USDA official data.

EU-28 exports of sunflower seeds to third countries in the first quarter of MY 2014/15 were 14 percent lower compared to corresponding period in the previous year with major exporters being Romania and Bulgaria. The main reason for this decline is weaker demand from traditional export markets. Main export destinations remain Pakistan, followed by Turkey and South Africa, but at much lower volumes. Turkey expects lower crush this year and generally lower imports of seeds. We estimate annual exports to be 5 percent lower in MY 2014/15 compared to MY 2013/14, which is marginally below USDA official.

MY 2013/14

A major update is made in EU-28 sunflower seeds production based on final official data in member states. Production figure has been changed to slightly above 9.0 MMT and is 2 percent above USDA official numbers.

Food use was revised based on new data from Bulgaria due to industry estimates about confectionary sunflower production and use in the food industry. Romania also increased marginally its estimates for the food use. Our current estimate exceeds USDA official data. Feed, seeds and waste use as updated based on member states contribution. Due to above changes, ending stocks were raised and are estimated at 14 percent higher than the USDA official data.

Sunflower Meal

Meal, Sunflowerseed

2013/2014

2014/2015

2015/2016

Market Begin Year

Oct 2013

Oct 2014

Oct 2015

European Union

USDA Official

New post

USDA Official

New post

USDA Official

New post

Crush

7,601

7,600

7,500

7,450

0

7,300

Beginning Stocks

77

77

200

195

0

105

Production

4,127

4,127

4,040

4,040

0

3,950

MY Imports

3,364

3,364

3,350

3,200

0

3,350

MY Imp. from U.S.

0

0

0

0

0

0

Total Supply

7,568

7,568

7,590

7,435

0

7,405

MY Exports

173

173

180

230

0

180

Industrial Dom. Cons.

0

0

0

0

0

0

Food Use Dom. Cons.

0

0

0

0

0

0

Feed Waste Dom. Cons.

7,195

7,200

7,210

7,100

0

7,150

Total Dom. Cons.

7,195

7,200

7,210

7,100

0

7,150

Ending Stocks

200

195

200

105

0

75

Total Distribution

7,568

7,568

7,590

7,435

0

7,405

1000 MT, PERCENT

Traditionally, the largest consumers of sunflower meal for animal feed are also leading producers of livestock, poultry and dairy. Key EU consumers of sunflower meal for animal feed are Spain, France, Italy, the Benelux, Poland and the United Kingdom.

Due to continued expansion of local crush industry and policies (export duties) restricting seed exports, Ukraine and Russia dominate sunflower meal exports to the EU, followed by Argentina. Turkey and Egypt remain traditional export markets for EU meal exporters, followed by Lebanon and Morocco.

MY 2015/16

EU-28 sunflower meal output is forecast to have a 2.3 percent reduction in line with the decline in crush estimate. Imports are projected to grow (by 4.7 percent) compared to the current year to meet expected good demand for protein meals in the EU and to compensate for lower domestic availabilities. We expect that the Black Sea exporters will have sufficient exportable and competitive supplies due to local efforts to increase crush and have a better use of expanded capacities. On the other hand, we may see a shift to higher use of abundant soybean meal in feed but not very strong competition from rapeseeds meal which is presently forecast to be in shorter production and in lower use. Therefore, consumption of sunflower meal in feed is projected to increase slightly by less than one percent compared to the current year due to improved relative competitiveness to rapeseed meal but a weaker position relative to soybean meal. Overall, sunflower meal has been increasingly incorporated in feed ratios enjoying stable demand from the feed industry for the last five years. High protein sunflower meal is slowly but gradually expanding its market share in the EU and its broader application in the feed industry may also support a more sustainable and growing use of sunflower meal.

Following record high exports in MY 2014/15, sunflower meal exports of in MY 2015/16 are projected to return to more traditional level due to lower supply and expected stable domestic demand in the EU-28.

MY 2014/15

Sunflower meal production is estimated at marginally lower level (by 2.2 percent) compared to the previous season due to decline in crush. Current estimate is identical with USDA official data.

Imports of sunflower meal in the first quarter of MY 2014/15 were 10 percent higher than the corresponding period in the previous season. In addition to traditional exporters Russia and Ukraine which supplied higher volumes to the EU, Moldova and especially Argentina sharply increased their exports to the EU, four-fold combined for the two countries. This growth in EU imports during this period was a result of good competitiveness of sunflower meal relative to other meals and favorable feed demand, however, the situation for the rest of the year is forecast to change. Traditional suppliers have dwindled exportable stocks while soybean meal on the export market is likely to be abundant and competitive. This is likely to shift the part of the demand towards soybean meal. Therefore, we currently estimate imports for the marketing year to be lower than in MY 2013/14 by 5 percent to reflect lower use in the EU. In the second half of MY 2014/15 imports may be sourced from Argentina, which enjoys a better crop this year, and from Black Sea suppliers, which have aggressive price offers as a result of local currency devaluation. Currently, imports for MY 2014/15 are estimated to be below USDA official estimate.

Sunflower meal has been more competitive in feed incorporations vs rapeseed meal and soybean meal in the first quarter of the marketing year. However, this trend may not be preserved in the second half of the marketing year with some softening of sunflower meal position provided that more and competitive soybean meal supplies arrive from South America. Currently, the majority of member states indicate lower use of sunflower meal, more pronounced in France, the Benelux, Germany, Ireland and Denmark; Spain forecasts stagnation in use while the United Kingdom and Poland expect higher use in feed. We estimate that EU-28 use of sunflower meal will shrink by 1.4 percent compared to MY 2013/14, this estimate being under USDA official.

Sunflower meal exports during the first three months in MY 2014/15 were record high at 225 percent above the previous season due to competitive prices combined with favorable demand on traditional export markets. Saudi Arabia was the leading export market, along with Turkey and Egypt, with Lebanon, Morocco, Syria and the western Balkan countries all sourcing higher volumes from the EU-28. Our current estimates for the annual exports are at 33 percent more than in the previous season and above USDA official data.

Sunflower Oil

Oil, Sunflowerseed

2013/2014

2014/2015

2015/2016

Market Begin Year

Oct 2013

Oct 2014

Oct 2015

European Union

USDA Official

New post

USDA Official

New post

USDA Official

New post

Crush

7,601

7,600

7,500

7,450

0

7,300

Beginning Stocks

62

62

311

236

0

248

Production

3,185

3,185

3,120

3,130

0

3,075

MY Imports

1,039

1,039

850

1,000

0

1,050

MY Imp. from U.S.

0

0

0

0

0

0

Total Supply

4,286

4,286

4,281

4,366

0

4,373

MY Exports

372

372

305

390

0

375

Industrial Dom. Cons.

250

260

250

260

0

260

Food Use Dom. Cons.

3,350

3,400

3,370

3,450

0

3,500

Feed Waste Dom. Cons.

3

18

3

18

0

18

Total Dom. Cons.

3,603

3,678

3,623

3,728

0

3,760

Ending Stocks

311

236

353

248

0

220

Total Distribution

4,286

4,286

4,281

4,366

0

4,373

1000 MT, PERCENT

EU-28 is a net importer of sunflower oil, mainly used for food purposes.

The largest exporters of sunflower oil outside the EU are Spain, Hungary, Bulgaria and Romania. Production is concentrated in France, Hungary, Spain, Romania and Bulgaria while consumption is the highest in Spain, Italy, the Benelux and the United Kingdom.

MY 2015/16

Sunflower oil output is forecast to decline by 1.8 percent due to lower projected crush. Most member-states project stable production as in MY 2014/15, however, the reduction in Romania, Hungary and Italy lead to a marginal reduction for the EU-28.

As a result, imports are projected to grow by 5 percent to offset lower domestic output and to meet favorable food use demand. Most likely, imports will be sourced from traditional suppliers such as Ukraine, Russia, Argentina, Serbia and Moldova.

Demand for food use is forecast as favorable due to continued orientation of European consumers towards vegetable oils with "health" image. We expect that the new labeling regulations for food products in the EU effective December 2014 (Food Information to Consumers (FIC) Regulation # 1169/2011) which requires naming the specific vegetable oils in the foods on the label, may stimulate higher use of "health" image oils by the food processors such as sunflower oil. In addition, there has been a growing demand for high-oleic oils on the market. Currently, all member states forecast stable and higher use with the exception of a slight decline in Italy. These trends are expected to be more pronounced in MY 2015/16 and lead to further growth in consumption of 1.4 percent compared to the current season.

MY 2014/15

In MY 2014/15, EU-28 sunflower oil production is estimated to be 1.8 lower than in the previous season as a result of reduced crush. Our estimate is slightly above USDA official data. Stable or lower sun oil output was reported by all member states with the exception of Romania and Czech Republic which register modest growth.

Favorable domestic demand is met by higher beginning stocks in this season and by slightly lower imports of sunflower oil, currently estimated at 3.8 percent less than imports in MY 2013/14. In the first quarter of the marketing year, imports were 5.4 percent more with Ukraine supplying 240 percent more sun oil to the EU compared to the previous season and compensating for reduced imports from other suppliers such as Serbia and Russia. We expect imports to slow down for the remainder of the year due to declining stocks at exporters' level, although the Black Sea region is still likely to remain price-aggressive as a result of currency depreciation. Argentina may emerge as a supplier of high oleic sun oil to the EU due to bumper output of high oleic sunflower seeds in the country this year. At present, our estimate for imports is above USDA official numbers.

Sunflower oil food consumption is estimated to be 1.4 percent higher than in the previous season due to good health image of sunflower oil and partly as a result of the deficit of olive oil in the EU this year. Stable or higher food use is reported in France, Spain, Hungary, the Benelux, the United Kingdom, Bulgaria and Romania while Italy and Germany report some decline.

Sun oil exports set a record during October-December 2014 and were 22.7 percent higher than last year's level due to good demand from importers (Turkey, South Africa, Bosnia and Herzegovina and Macedonia) followed by Morocco, India, Mozambique and the United States. The annual exports are currently estimated to be higher than USDA official data.

Breakout of EU-28 Industrial Uses for Sunflower Oil in 1000 MT

MY 2013/14

MY 2014/15

MY 2015/16

Biofuels Use

260

260

260

Other Industrial Uses

0

0

0

Total Industrial Use

260

260

260