Ukrainian sunflower oil: raw material or a premium product?

27.09.2017

(adapted from the 5th International Conference Black Sea Oil Trade)

Over the last 20 years, Ukraine’s fat-and-oil sector has been developing towards growth of sunseed crushing capacities. So, UkrAgroConsult expects their total to reach 20 MMT by 2020.

It is natural that sunflower plantings expand with a reduction of wheat planted acreage. Roughly equal areas – 6.3 Ml ha – have been seeded to either of these crops over the last two seasons. Sunflower growing still boasts the highest margins among other crops in Ukraine (over 60%), though this percentage has lost almost 20% over the past year.

Ukraine still holds the top position in the global sunoil market, where the country accounts for 34% of the commodity’s total production and for 57% of its exports. World analysts predict the consumption share of sunoil to decrease to 8% by 2025 (down 1%). In turn, palm oil’s portion will expand to 43% against 34% in 2010.

Sunoil price traditionally depends on world prices in the competing market segments, which currently pressure it. In addition, sunoil is still underestimated, though its qualities are on a par with premium oils, even surpass them for some parameters. 

Considering the Ukrainian sunoil market’s prospects, the long-term strategy here must envisage promoting sunoil as a premium product and creating a national brand in order to minimize the impact of negative factors and avoid developments similar to those previously seen in the sugar market.

Full version of the article is available to subscribers for weekly market report “Black Sea Vegoils +CIS” and “Online market review” by UkrAgroConsult.

 

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