Red Sea Crisis spells trouble for Ukrainian wheat
After the depreciation of the US dollar prompted short coverings for wheat in the middle of the week the market has now turned again and is confronting high stocks. SovEcon reports that wheat quotations have declined to USD 218-224/mt FOB Black Sea in Russia as the country is anticipating a bumper crop. Russia’s exports should reach 35.6 million mt in February, which is 3.7 million mt up on last year, and are expected to range at 52.5 million mt at the end of the season. Buyers include Turkey, Egypt and Banglad...
Last year’s total soyabean plantings of 1.8M ha were an almost 19% increase compared with the previous year, according to official agriculture ministry data.
In addition to soyabeans, farmers continued to prioritise the entire oilseeds sector, with expectations that this year’s oilseed planted area would increase by 11% year on year, the 13 February report said.
Farmers said they were also considering increasing spring rapeseed, barley and wheat planted areas by 24%, 7% and 2% respectively.
Meanwhile, a 9% drop in corn planted area was forecast in 2024 due to lower prices for the commodity.
“Now corn cultivation is unprofitable, wheat is somewhere around zero and oil crops profit is at low levels,” a local analyst was quoted as saying.
At the time of the report, Ukrainian farmers had not decided if they would cut the sunflowerseed planted area.
In the 2023 spring campaign, the sunflowerseed planted area totalled 5.3M ha, which was a 6% drop compared to the previous year...
Production growth was driven by an increase in global population and the growing share of biodiesel industry consumption. It is estimated that about 70% of the oil is used for food purposes and 30% for industrial purposes.
Sunflower oil ranks fourth in global vegetable oil production with a 10% share.
Sunflower oil shows the largest increase in production during this period compared to all vegetable oils.
Global oilseeds trade in 2015/16-2023/24 increased by 21% in terms of tonnage.
In 2023/24, sunflower oil took second place of total world exports.
According to UkrAgroConsult, sunflower oil has favorable demand prospects due to the growing consumption of edible oils and its strong position in the food consumption segment.
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Amidst a series of border blockades by Poland, the daily flow of automobile exports has taken a noticeable hit. Recent reports indicate a staggering sixfold decrease in the daily volume of agricultural product crossings across the Polish border. From an initial 6.000 tonnes per day recorded at the start of February, the figure has plummeted to 1.000 tonnes per day as of February 19.
The operation of other checkpoints on the border with Hungary, Slovakia, Romania and Moldova is carried out without obstacles, which partially compensates for the decrease in the pace of crossing the Polish border.
It is also noted that market rates for transportation from western Ukraine as of February 21 are: to central and northern Italy – 125-145 euros, to northern Bulgaria – 70-100 euros, to eastern Germany – 100-140 euros...
In addition to facing increased maritime risk in the Black Sea, exporters in both Russia and Ukraine – the two largest sunflower oil producers and exporters in the world – now faced disruption from Houthi attacks on vessels in the Red Sea, AgriCensus wrote.
The disruption had led to increased costs in key transit routes connecting traders to major export markets and had made Black Sea sunflower oil uncompetitive on price and with complicated logistics, the report said.
India imported 119,432 tonnes of Argentine sunflower oil from 1 November 2023 to 31 January 2024 – more than 70% higher than in the same period of the previous year, according to the Solvent Extractors’ Association of India (SEA).
Indian buyers were opting for Argentine sunflower oil due to concerns over logistics and increased costs, risks in the Black Sea and Red Sea, and the South American product’s lower cost, the report said.
On average, the cost of freight from Argentina to India is 20% lower than freight from the Black Sea region and, at the time of the report, was US$83-90 CIF India compared with US$100-US$120 CIF India from the Black Sea, according to estimates from trade sources...
Compared to the previous auctions on January 18, sunflower oil offer prices decreased from $950-1000/t to $957-985/t C&F with payment of 180 days and from $993-1206/t to $974-1010/t C&F with payment of 270 days, and the number of submitted applications decreased from 12 to 9.Instead, soybean oil offers increased from 5 to 6, and prices moved from $975-993/t to $1,000-1,050/t C&F with 180 days payment and from $1,035-1,210/t to $1,025-1,075/t C&F with payment of 270 days.
As in the previous tender, there is a decrease in the maximum prices of offers and the willingness of sellers to reduce prices for deliveries with delayed payment.Soybean oil from Green Suppliers at a price of $1,000 (975)/t C&F and sunflower oil from ADM at a price of $957 (950)/t C&F were the cheapest...
During the period from July-January, 2023-24 about 91,950 metric tonnes of soyabean oil valued at $99.990 million were imported as compared to the imports of 136,870 metric tonnes costing $199.386 million of the same period of last year, according to the data of Pakistan Bureau of Statistics. During the period under review, over 1.735 million tonnes of palm oil worth $1.611 billion were imported as compared the imports of 1.927 metric tonnes valued at $2.446 billion of the same period of the last year, it added.
Meanwhile, the sugar imports into the country also decreased by 42.75 percent as about 2,260 metric tonnes of sugar valued at $2.10 million were imported as compared to the imports of 4,332 metric tonnes worth $3.67 million in the same period of last year. During the period under review, food group exports from the country grew by 57.66 percent as different food commodities valued at $4.267 billion were exported as compared to the exports of $2.706 million in the same period of last year.
They note that the reduction in supplies is due to a significant decline in imports of palm and rapeseed oil – by 20% and 10%, to 2.06 million tons and 271.8 thousand tons, respectively.
At the same time, the experts recorded the increase in imports of soybean and sunflower oil to the EU – by 14% and 21%, to 372.85 thsd tonnes and 1.45 mln tonnes respectively.
According to the European Commission, the main volumes of palm oil came to Europe from Indonesia (629.8 thsd tonnes). Soybean, rapeseed, and sunflower oil were most actively imported from Ukraine – 136.4 thousand tons, 106.9 thousand tons, and 1.34 million tons, respectively.
In addition, according to the European Commission, in the period under review, the countries of the bloc reduced the imports of oilseeds by 22% to 11.15 mln tonnes. The supply of meal also dropped by 10%, to 11.33 mln tons.