Croatian Sunflower Power? Chance for More Exports Arises
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Loading... - Marta Babic
- 18 May 2022
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As Poslovni Dnevnik writes, due to the ongoing war in Ukraine following Russian invasion back in February this year, there was a huge disturbance and uncertainty and shortages in supply, as well as a drastic rise in prices on the global market of sunflowers, sunflower products and particularly sunflower oil. Production of these products in Ukraine and Russia were of course deeply affected, and their exports otherwise dominate the global market. Is this a chance for the humble Croatian sunflower?
The most significant disturbances on the global market in the next period will be in the supply and demand of sunflower products such as the heavily used oil, due to the high concentration of production and the usual exporting of sunflower oil from both Ukraine and Russia. Any further prediction of price movements and supply in the market will primarily depend on the ability to supply sunflower oil and grain from Ukraine this season, but also the course of the war and the logistical conditions for the delivery of supplies to the rest of Europe.
“Croatian sunflower production has been growing over more recent years, in terms of production, although the area on which sunflowers are planted and cultivated hasn't increased. Croatia produces more sunflowers than it needs. Self-sufficiency stands at about 212 percent, but we meet only 44 percent of the need for sunflower oil. Given that we have production capacities for processing sunflower products into sunflower oil, it would be logical, given the rising prices, to provide larger quantities of Croatian sunflower oil and to process domestic sunflower grain in factories here in Croatia. This would ensure a stable supply of oil for the domestic market, and we have the capacity to export this highly sought after and now expensive product, which is in great demand in the global and EU markets,'' concluded the market analysis of experts from Smarter, a consulting company specialising in agriculture and food industry.
Sunflower oil production in Ukraine back in 2020 amounted to 6.45 million metric tonnes (MT), in Russia, 4.45 million MT, and in the EU 3.9 million MT. These are the three most important production areas in the entire world, while all the others are much smaller producers. The Ukrainian sunflower oil industry is focused on the export market because as much as 90 percent of production is intended for foreign markets, according to USDA data. Compared to Russia, which is the second largest producer, they consume almost 30 percent of their own sunflower oil production on their own market.
"In total, ports in the Black Sea account for almost 80 percent of the world's sunflower oil exports, and today these areas are war zones. Given the strong dominance of Ukraine and Russia on the global sunflower oil market, Russia's attack on Ukraine has caused an enormous impact on the global sunflower market, which is why it's important to change the strategic thinking about the production of Croatian sunflower oil,'' Smarter experts noted.
Russia's horrific invasion of Ukraine has significantly disrupted that large Eastern European nation's sunflower oil industry and supply chain, while an extension of the conflict threatens the next growing season. Plants which process sunflower seeds into oil have largely ceased operations, and the closure of ports prevents exports. Sunflowers are sown in Ukraine in April and May, and the harvest usually begins in September. There is a huge risk now when it comes to supply and demand because military actions are taking place in agricultural areas - many roads are blocked, commercial companies aren't working, farmers can't plant, and it's very difficult to get raw materials for quality sowing (fertiliser, fuel, protective equipment, and the like).
The main areas of sunflower seed cultivation in Ukraine are located in the steppe and forest-steppe zones of the country, located in the central and eastern provinces. The main production regions are Dnepropetrovsk, Kirovograd, Kharkov, Zaporozhye, Nikolaev, Lugansk, Odessa and Poltava, which together make up 62 percent of the total sown area in the country. Due to the export market orientation, most of the Ukrainian plants for sunflower processing and production of sunflower oil are located near the Black Sea ports for logistical convenience. It's now evident that the most important production basins and the possibility of delivery are endangered by the ongoing war. Read More...
