Summary

The sunflower seed and oil market have seen rising prices over the last couple of months
similar to other veg oils. The major contributor to this has been supply side constraints
posed by fall in production in Ukraine and Russia due to dry weather conditions. As Russia
and Ukraine represent over three-quarters of total sunflower seed meal and oil trade, these
smaller crops portend an outsized impact on products trade. These tighter exportable
supplies come at a time of stronger global demand for protein meals and oils coupled with
general tightening of oilseed and product markets. Consequently, lower availability of
sunflower meal and oil contributes to the general strengthening in oilseed and product
prices over the past few months. Global sunflower oil prices have outgained the other major
vegetable oils, up 25 percent in Argentina and Ukraine since August. In fact, prices for all
major vegetable oils have strengthened. For example, August to October average export
prices are up about 5 percent for rapeseed oil, 15 percent for U.S. and Argentina soy oil,
nearly 20 percent for Malaysia and Indonesia palm oil.

The fear of supply demand balance is due to 9.6% drop in oilseed production when the
demand for Sunflower oil seeds is showing a smaller drop which means ending stocks across
the major suppliers is going to go down.

With respect to India, the demand and imports for sunflower oil is expected to see slight
drop this year. The sunflower seed production in India is expected to be robust but it
contributes a very small amount to its overall consumption and hence is not expected to
swing the sentiments very widely.

It would be vital to observe the November production of Sunflower seeds from Ukraine and
prices of substitute oils to see where the prices of Sunoil would move next.
 1. World

According to USDA the overall Sunflower seed production in 2020-21 to drop by around 5.5 MMT
due to dry weather condition in Ukraine and Russia. The ending stock are to also drop by 1 MMT to
1.33 MMT on YoY basis. Between October and November USDA has reduced its production
projections for sunflower seeds from 51.49 to 49.66 MMT.

The sunflower oil production is also predicted to drop by 1.8 MMT in 2020/21 after record
production last year. The shortfall is coming from low farm yields in both Russia and Ukraine due to
dry weather conditions. The production from other major producers like Argentina are also expected
to be low.
1.1 Ukraine
The sunflower seed production for 2020-21
is expected to be 14 MMT which is 2.5
MMT less than last year. The drop in
production in October alone (together with
Russia) is 1.5 MMT.

1.2 Russia
The sunflower seed production for 2020-21
is expected to be 13 MMT which is 2.3 MMT
less than last year. The drop in production in
October alone (together with Russia) is 1.5
MMT.

1.3 Argentina
The sunflower seed production for 2020-21 is
expected to be 3 MMT which is 0.3 MMT less
than last year.

1.4 EU
The sunflower seed production for 2020-21 is
expected to be 9.3 MMT which is 0.34 MMT less
than last year.
2. Demand
2.1. India

The domestic consumption of sunflower oil in India in 2020-21 is expected to be 2650

Thousand MT which is 7% less than last year. The sun oil imports to India would stand at
around 2450 Thousand MT which is 5.7% less than last year.

Sunflower Oil: India

3000

2500

2000

1500

1000

500

0
2016/17 2017/18 2018/19 2019/20 Oct 2020/21 Nov 2020/21

Sunflowerseed Pdn Oil Consumption Oil Imports

2.2. World
The overall domestic consumption for sunflower oil is expected to be 1.8% lower in 2020-21
as compared to last year. A similar drop is expected in overall seed and meal demand.
 SUNFLOWER OIL: CONSUMPTION
World Total European Union
Turkey Russia

19521

19160
17967

5273

5173
5064

2150

2085

2075
1190
1140
1095

2018/19 2019/20 2020/21

SUNFLOWER : CONSUMPTION
World Total World Total (Seed) World (Meal)
54700
50353

50340
21963

21165
20673

19521

19160
17967

2018/19 2019/20 2020/21

3. Prices

FOB Ukraine Sunoil prices are around $1150/MT which is 15% higher than the prices on
same date a month back.
FOB Argentina Sunoil prices are around $1120/MT which is 15% higher than the prices on
same date a month back.