Sunflower Production Likely to Remain Strong In Ukraine June 9, 2017

Highlights

This news incorporates various updates to Production, Supply and Distribution (PSD) data based on recent export numbers as well as domestic planting areas for sunflowers, soybeans, rapeseed and volumes of production for oils and meals.

Production

Farmers have already planted over 5.5 million hectares (ha) of sunflower seed and almost 1.9 million ha of soybeans as of June 7, 2017. The farmers planted 858 thousand ha of winter rapeseed.

These numbers were used by FAS Kyiv to adjust production volumes of these crops for marketing year (MY) 2017/18.MAPFU’s tells that areas under sunflower in 2017 are lower compared to 2016 despite higher imports of sunflower seeds in 2017. Post witnessed a similar trend in 2016 when planted area numbers were gradually revised upward as the year progressed. Under these circumstances, Post maintains estimated MY2017/18 production volumes for sunflower seed at the level of the previous MY based on seed import data, suggesting similar seed purchases by farmers this year. This number might be adjusted based on subsequent planting reports by the State Statistics Service of Ukraine which will be available later this year.

Suboptimal weather conditions in spring 2017 featuring sub-zero temperatures in May, as well as low levels of topsoil moisture, likely impacted plant development at the initial stage. Based on the abovementioned weather data, Post decreased yield estimates for all oilseeds compared to the two previous years. These numbers could be revised at a later date based on soil moisture levels changes as the crop continues to develop.

Post increased its rapeseed production estimate for MY2016/17 to 1.2 MMT compared to the State Statistical Service of Ukraine’s official number -- at 1.154 MMT. This is justified by currently available rapeseed and rapeseed oil export data suggesting higher volume of production in 2016

Consumption:

Reports by domestic poultry producers suggest that they are expanding use of sunflower meal in the diet of their poultry flocks. FAS Kyiv rebalanced feed consumption in favor of increasing sunflower meal while subsequently reducing usage of soybean meal.

Trade

Estimated oilseed export numbers for MY2016/17 have been revised based on reports of the State Fiscal Service of Ukraine (SFSU). Ukraine continues to boost export volumes, which was especially visible for sunflower oil and meal as well as soybeans and products of processing thereof. Economic stabilization has resulted in an increase of palm oil imports into Ukraine in 2016 as well.

Export forecasts for all oilseeds for MY2017/18 have been adjusted based on available data for crop production areas in 2017, as reported by MAPFU and Post’s own estimates.

It should be noted that for MY2016/17 Ukraine is gradually increasing its volume of sunflower seed exports despite the export tax for this commodity still in place. For September 2016 – March 2017 the majority of this volume went to the EU (predominantly France and The Netherlands).

Oilseed, Sunflowerseed

Oil, Sunflowerseed

Meal, Sunflowerseed

Oilseed, Soybean

Oil, Soybean

Meal, Soybean

Oilseed, Rapeseed

Oil, Rapeseed

Meal, Rapeseed