VOL. 19, NO. 1 / WINTER 2024 / URNER BARRY'S REPORTER • 9
sunflower meal and oil. Ukraine produces
one-third of the world's sunflower oil and
accounts for almost half of global exports.
Sunflowers are typically sown in April and
May, with harvest beginning in September.
Based on Mintec's assessment, the price
of sunflower oil spiked to over €2.022/mt
in March 2022. Sunflower oil prices have
since dropped significantly as of Q4 2023,
partly attributed to accelerated sunflower
seed harvests in Ukraine and Russia.
Many farmers in Ukraine plan to stick
with the cautious, low-cost approach
they employed this past growing season,
according to Mintec. The focus is on wheat
and sunflower production, foregoing more
costly crops like corn and rapeseed.
In November, Mintec noted a drop
in sunflower oil demand, as market
players have secured 2023 supplies
and may reduce prices to stimulate
interest. Ongoing Black Sea tensions are
intensifying competition between Russian
and Ukrainian sunflower oil suppliers.
EXPORTS AND SHIPPING
Russia's invasion of Ukraine caused
widespread damage to infrastructure,
resulting in Ukraine's seaports to be nearly
completely blocked from March through
July 2022.
Ongoing security threats to Ukrainian ports,
which are still at risk of drone and shelling
attacks, are raising uncertainty about the
level of demand for Ukrainian supplies.
Signed in July 2022, the Black Sea Grain
Initiative enabled the safe passage of
Ukraine grain exports through three key
Ukrainian ports in the Black Sea-Odesa,
Chornomorsk, Yuzhny/Pivdennyi.
The UN-brokered grain agreement relieved
some international price pressures as
more Ukrainian grain was able to leave the
country. Russia did not renew the deal in
July 2023, arguing that obstacles to its own
exports hadn't been lifted.
Russia targeted Ukrainian ports on the
Danube in late July, following the Black
Sea Grain Initiative's collapse on July 17.
VEGETABLE OILS
Global vegetable oil prices were especially
impacted by the start of the war in 2022.
Historically, Russia and Ukraine combined
accounted for over 50% of global
sunflower oil production and exports.
A year after the invasion, global vegetable
oil prices declined significantly from their
record levels due to factors including
improved supply conditions, higher yearover-year (YOY)
global output and lower
freight rates.
Rapeseed oil: Also known as canola oil,
rapeseed oil is the third most produced
edible oil and accounts for about an eighth
of the world's vegetable oil production.
Ukraine is the world's sixth-largest
producer and third-largest exporter of
rapeseed. Mintec reports that disruptions
to the Black Sea supply of rapeseed
and derivative products, combined with
reduced output from Canada, led to higher
prices last year.
The Mintec Benchmark Price (MBP)
of Rapeseed Oil FOB Rotterdam was
assessed at €950.50/mt as of November
8, 2023, down sharply from the record high
reached in April 2022.
Mintec has observed a decline in rapeseed
imports from Ukraine into the EU since
prices are perceived as "too low." The
supply outlook appears sufficient due to
increased stocks from Canada combined
with the rapeseed crops from Ukraine in
storage, contributing to a bearish outlook
for rapeseed oil moving forward.
Sunflower oil: Typically, Ukraine is the
world's top producer and exporter of
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This left Ukraine unable to safely export
from its Black Sea ports, lifting wheat prices
on the CME by nearly 5% shortly after the
news broke.
Mintec has learned that there are significant
concerns that shipping in the Black Sea
region may become exceedingly difficult
as market participants have expressed
reluctance to sell Cost, Insurance, and
Freight (CIF) in the Black Sea/Azov region.
Following the suspension of the grain
deal, Ukraine has been utilizing a Black
Sea export corridor to renew some of its
seaborne exports. Ukrainian ports continue
to be subject to Russian attacks, raising
uncertainty about trade flows to and from
the region going forward.
Article contributed by Courtney Shum
cshum@urnerbarry.com
"Both Russia and
Ukraine are among
the world's most
significant producers
and exporters of
agricultural goods."