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Ukraine and Russia generate 80% of sunflower oil exports in the world. It is therefore the whole industry that will be shaken by the war.
Russia and Ukraine have a dominant position in the sunflower sector. Ukraine alone accounts for half of world oil exports. It also exports cakes intended for animal feed as well as seeds.
In Ukraine, 70% of cereal and grain exports are made by train to the Black Sea ports – Odessa Chornomorsk, Yuzhny, Mykolaiv – so stopping maritime traffic also means stopping most of the trade agricultural raw material.
This is therefore the concern among the three major buyers of Ukrainian sunflower oil: India, China and the European Union. In France, the subject is of concern: there are particular concerns about the availability and cost of high-protein sunflower meal imported from Ukraine.
Inevitable supply difficulties
Prices reflect this concern, they are on the rise for all oils, sunflower, soy and palm as well. The rise in prices is also tangible for soybean and rapeseed meal. Because if there is a shortage of Ukrainian meal, we will have to find an alternative to feed the cattle.
But the equation promises to be complicated, explains Marc Zribi, head of the grain and sugar unit at FranceAgriMer. In particular because it will not be so easy to shift demand to rapeseed meal: the 2021/2022 campaign was marked by extreme drought in North America and in Canada, the world’s largest rapeseed producer.
Supply difficulties are inevitable
Unless some buyers decide to postpone their orders…
Beyond sunflower, the halt in wheat exports could put countries like Tunisia or Lebanon in difficulty, which are very dependent on Ukrainian exports and have very low stocks unlike countries like Algeria and Egypt, also large importers but who have a more elaborate storage policy.
On the other hand, Ukrainian maize used for breeding will be lacking in Europe. In particular in Italy and Spain where stocks are at their lowest.