Column: Russia set to snag export lead in sunoil market from rival Ukraine

Sunflowers are seen in a field in Chernihiv region
Sunflowers are seen in a field in Chernihiv region, while Russia's attack on Ukraine continues, Ukraine August 8, 2022. REUTERS/Valentyn Ogirenko/

NAPERVILLE, Ill., Feb 2 (Reuters) - Prior to last year, Ukraine was known as the world’s leading sunflower oil exporter and supplying up to half of that trade volume, with much of it headed for top vegetable oil consumers such as India and European Union members.

But now, due to domestic market limitations, Ukraine has surged to the top of the less profitable sunflower seed trade, which has worried the country’s farm ministry.

Russia’s invasion of Ukraine a year ago significantly disrupted the 2022 Ukrainian grain and oilseed harvests, which dropped more than 40% and 25% on the year, respectively. Exports have also declined, though they have been somewhat stable in recent months under the Black Sea export deal.

Meanwhile, Russia may be emerging as the new leader in sunflower oil trade.

Sunflower oil exports, Russia and Ukraine

Globally, sunflower oil is the least prominent of the major four vegetable oils (palm, soybean and rapeseed are the others), but it has been a vital source of revenue for Ukraine’s economy.

In calendar year 2021, sunflower oil was Ukraine’s highest grossing agricultural export, valued at $6.4 billion. That compared with corn at $5.9 billion and wheat at $5.2 billion. Sunflower meal added another $1.2 billion, and agricultural product exports accounted for 41% of all Ukrainian exports.

Ukraine’s farm ministry on Thursday called the rise in sunseed exports “unacceptable” since not only will it hit Ukraine’s export revenue potential, but it could also lead to the shuttering of oilseed processing plants, the permanent loss of market share and job losses.

Some 14% of Ukraine’s population is employed in agriculture according to the U.S. Department of Agriculture.


In the 2022-23 marketing year, USDA projects Russia will eclipse Ukraine in sunflower oil exports, accounting for 35% of trade versus 34% for Ukraine. Those shares three years ago were 28% and 50%, respectively.

Russia’s projected sunoil exports of 3.7 million tonnes would be about 3% below its 2019-20 record, but Ukraine’s 3.65 million would be off 45% from its high set that same year.

With operations at Ukrainian sunoil refineries greatly affected by the conflict, sunflowerseed exports have surged. USDA pegs Ukraine’s 2022-23 sunseed exports at 2.45 million tonnes, more than 20 times the average pre-war volumes. That makes Ukraine by far the top seed exporter at 45% of global trade compared with less than 5% pre-war.

Sunflower seed exports

Although Ukraine has observed steep declines, Russia’s rise in sunflower and products is not necessarily sudden as the Russian sunseed crop has been expanding for the last few years, as has its harvest of other oilseeds and corn.

USDA estimates Russia’s 2022 sunflower crop at a record 16.5 million tonnes, up 6% on the year, while Ukrainian production is seen at 10 million tonnes, down from its record 17.5 million in 2021.

Sunflower seed production

Russian farmers have made room for the oilseed and corn increase by reducing area under other crops such as barley, oats, rye and millet. Additionally, Russian crop estimates from USDA, which are used in this column, consider pre-war borders and are unlikely to include any occupied Ukrainian territories.

On average over the last five years, total harvested area for major Russian grain and oilseed crops has risen about 1.5% per year. USDA shows that total crop area at a record 56.8 million hectares (140 million acres) in 2022-23.

Just for fun, that average harvested area increase is far less than that for Brazil’s soybeans at over 4%. Russian crop area was about double Brazil’s soybean area around 2010, but it is now only 30% larger with Brazil’s harvested soy area slated at a record 43.4 million hectares.

Karen Braun is a market analyst for Reuters. Views expressed above are her own.

Reporting by Karen Braun Editing by Matthew Lewis

Our Standards: The Thomson Reuters Trust Principles.

Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

Thomson Reuters

As a columnist for Reuters, Karen focuses on all aspects of the global agriculture markets with a primary focus in grains and oilseeds. Karen comes from a strong science background and has a passion for data, statistics, and charts, and she uses them to add context to whatever hot topic is driving the markets. Karen holds degrees in meteorology and sometimes features that expertise in her columns. Follow her on Twitter @kannbwx for her market insights.