The EU: France Expects the Largest Sunflower Area Expansion
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Following a severe summer drought impacting yields and production, along with a dynamic and volatile Sunflower market in the current year, EU farmers report continuing to expand the Sunflower area. Further growth in Sunflower area is limited since it already grew by a record 18 percent in MY 2022/23 compared to MY 2021/22. Area expansion also faces limitations due to crop rotation practices.
As of March 2023, all major EU producer countries have applied a ban on the use of neonicotinoids, with the exception of Romania, which issued a derogation. Still, Sunflower remains a preferred crop due to its higher resilience to dryness and lower requirements for nitrogen fertilizers than other spring crops (mainly corn). Attractive prices of Sunflower seeds, lower production costs compared to alternative spring crops, and strong crush demand are the main reasons for a higher area planted in MY 2023/24. France expects the largest area expansion, followed by Italy and Bulgaria. This increase exceeds the declines in Romania, Germany, and Greece, while the rest of the MS expects area to remain essentially unchanged.
Following sharply reduced yields in MY 2022/23, a recovery is expected in MY 2023/24. The level of input applications may improve and contribute to a growth in average yields. The projected increase in average yields (estimated at 2.0 MT/HA compared to 1.8 MT/HA last year) is expected to result in 13 percent higher production (10.5 MMT) compared with the current season (9.3 MMT). This forecast may be modified depending on weather conditions.
Sunflower Connection Between the EU and Ukraine
Ukraine is the most important player in the European Sunflower products market. Europe’s demand for Sunflower seeds and products outstrips its domestic supply, which leads to significant imports. The EU traditionally sources about 50 to 70 percent of Sunflower Meal imports and 80-90 percent of its imports of Sunflower Oil from Ukraine. Globally, Ukraine exported 0.75 million tons Sunflower Oil in Q1 2023, followed by Sunseed Meal (0.6 million tons), Sunseed (0.13 million tons), and Sunseed Meal pellet (0.1 million tons) in Q1 2023, according to AgFlow data.
Since the start of Russia’s invasion of Ukraine, Sunflower crush facilities in Ukraine have suspended or reduced operations due to damage and worker safety concerns. Other countries have imposed sanctions on Russia, limiting trade from the region. Before the war, Ukraine and Russia collectively accounted for about one-third of global Sunflower seed exports, 79 percent of global Sunflower Meal exports, and 77 percent of Sunflower Oil exports.
In MY 2021/22, Ukraine had a record Sunflower crop of 17.5 MMT and high stocks of Sunflower seeds. EU imports from Ukraine changed significantly following the Russian invasion. Unlike past when the EU imported mainly Sunflower Meal and Oil from Ukraine, after February 2022, the EU imported a record high quantity of Sunflower seeds (1.8 MMT). This is more than double compared to MY 2020/21, of which 67 percent were from Ukraine (1.2 MMT) despite logistical challenges. Imports of processed products (Meal and Oil) also increased, albeit not drastically. Imports of Meal grew by six percent and of Oil by 36 percent.
Monthly exports of Sunflower seeds from Ukraine to the EU decreased in March-June 2022, compared to the corresponding months in 2021 but began to exceed the previous year’s volumes in July-September 2022, at the end of the MY. This contributed to a higher crush in the EU and resulted in more accumulated ending stocks in MY 2021/22.
Estimates in the USDA report are based on the assumptions for a potentially higher Sunflower crop in Ukraine due to expected growth in planted area and likely reduced crush for various war-related reasons. Still, Ukrainian farmers and processors are likely to try to establish crush of available Sunflower seed stocks to export Sunflower Oil to the EU, mainly via land routes.
Other sources: USDA
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