1. UKRAINE BUMPER CROP OF SFS IN 2016/17 AND SUNFLOWER OIL MARKET DEVELOPMENT
Speaker:
SVITLANA SYNKOVSKA,
Marketing Director
APK-INFORM AGENCY

2. Highlights of the presentation
Global trends on sunflower oil market
Ukrainian sunflower oil – way to the leadership
What to expect in the new season 2016/17?
Conclusions

3. Global trends on sunflower oil market

4. Sunflower oil market makes huge support to the domestic growing of sunflower seed
World SFS production increased by 34% during (10 years) and to increase further in 2016 by 8% y-o-y – to 43.7 Mln MT.
In particular, Ukraine more than doubled its crop. The country produces 1/3 of global volume.
At the same time SFS production in Russia rose 45%, in Argentina depreciated by 23% for 10 years.
Source: USDA, November 2016

5. World Production and Export of Sunflower Oil
Currently 53% of globally produced SFO is traded all around the world against just 38% 10 years ago.
SFO production increased by 44% during and to increase further in 2016 by 8% y-o-y – to Mln MT.
Its export is growing even faster: +100% for the period and +9% y-o-y in 2016 – to 8.8 Mln MT.
Source: USDA, November 2016

6. World Production and Export of Sunflower Oil
Ukraine alone accounts for 1/3 of total SFO production and avg. 55% of its export globally.
2016/17 F
Source: USDA, November 2016

7. Strong demand for SFO globally contributed to expansion of import geography
Import in 2016/17 F (10-year change)
Traditional “old” markets New markets
1. India
2. European Union
3. Turkey
4. China
6. Iraq
5. Iran
7. Egypt
8. South Africa
9. Saudi Arabia
10. Kazakhstan
1.8 Mln MT (+9 times)
850 Th MT (+9 times)
400 Th MT (+2 times)
400 Th MT (+14 times)
150 Th MT (+2%)
140 Th MT (+3.7 times)
135 Th MT (+3.6 times)
1.3 Mln MT (+7%)
890 Th MT (+6 times)
350 Th MT (+12 times)
Source: USDA, November 2016

8. Ukrainian sunflower oil – way to the leadership

9. What are the main competitive advantages of the Ukrainian sunflower oil?
Favorable geographic location of the country
Growing crushing industry and infrastructure
Logistics – development of veg oil terminals
Low state regulation
Good quality and attractive price
Measures to improve effectiveness of the crushing process (energy saving by burning of produced husk) and costs reduction

10. Ukraine is the world leader in Sunflowerseed Production
SFS production in Ukraine increased by 50% during and is forecasted to reach new record in 2016 – 13.9 Mln MT (+16% y-o-y).
record
Source: APK-Inform, November 2016

11. PSD Balance of Sunflower Seed and Oil in Ukraine
Export of SFO is the driver for market, while domestic consumption is reducing
Source: APK-Inform, November 2016

12. SFO Production and Export In Ukraine – up & up
SFO market in Ukraine continues to be one of the most growing. Production and export are forecasted to rise to the record highs in 2016/17.
Production increased by 56% during and to increase further in 2016/17 by 16% y-o-y – to 5.7 Mln MT.
Export increased by 70% during and to increase further in 2016/17 by 16% y-o-y – to 5.2 Mln MT.
records
Source: APK-Inform, November 2016

13. Share of Ukrainian sunflower oil in global exports rose sharply
Ukraine is the biggest player on the world SFO export market, far ahead its competitors.
In 2016/17, the country ‘s share to reach 57% in global SFO export against 46% in 2006/07.
Source: USDA, November 2016

14. Key destinations for the Ukrainian SFO: ASIA – 50%
Incredibly high and rapidly growing import demand from India made it №1 market for Ukraine with the share of 31% in total exports 2015/16
China – “breakthrough” since 2013, 2nd place in Ukrainian exports
Source: APK-Inform, November 2016

15. Key destinations for the Ukrainian SFO: EU – record high 30%
Free trade zone with EU promoted export from Ukraine in 2015/16 to 1.4 Mln MT – up 2.3 times y-o-y
Source: APK-Inform, November 2016

16. Key destinations for the Ukrainian SFO: Middle East – record low 15%
Turkey keeps on strong import of SFO
Supplies to Egypt reduced twice during 2010/ /16 due to SBO & CPO higher usage
Iran & Iraq – complicated but perspective markets
Source: APK-Inform, November 2016

17. Ukraine: TOP-15 importers of SFO
2010/11 (Sep-Aug) VS
2015/16 (Sep-Aug) №
Country
Export volume '000 tons
Share % 1
India
717
27% 2
Turkey
309
12% 3
Egypt
213 8% 4
Netherlands
195 7% 5
Russia
151 6% 6
Italy
146 5% 7
Spain
112 4% 8
Belarus 73 3% 9
Syria 67 10
Saudi Arabia 64 2% 11
Georgia 60 12
UAE 46 13
Sudan 44 14
United Kingdom 42 15
Uzbekistan 39 1%
Others
374
14%
TOTAL
2 652
100% №
Country
Export volume '000 tons
Share % 1
India
1415
31% 2
China
621
14% 3
Spain
383 9% 4
Netherlands
377 8% 5
Italy
285 6% 6
Turkey
177 4% 7
France
151 3% 8
Iran
143 9
Malaysia
131 10
Egypt 96 2% 11
Lebanon 71 12
UAE 68 13
United Kingdom 66 1% 14
Saudi Arabia 62 15
Sudan 49
Others
406
TOTAL
4 500
100%
Source: APK-Inform, November 2016

18. Ukraine: TOP-15 exporters of sunflower oil
2015/16 (Sep-Aug)
Source: APK-Inform, November 2016

19. What to expect in the new season 2016/17?

20. Monthly Prices of Vegetable Oils and Brent Crude Oil in Europe
Traditionally sunflower oil has a price premium over other vegetable oils.
However 2016/17 started from the tendency of price spread reduction among veg oils.
That is explained by bumper SFS crop in the world.
Source: APK-Inform, November 2016

21. Monthly Prices of Sunflower Oil: origin comparison
Price premium between SFO of different origin also reduces.
That will result in stronger competition between suppliers on this market.
Source: APK-Inform, November 2016

22. Global SFO Export Resume 2016/17 Forecast
Ukraine
(APK-Inform)
5.2 Mln MT +16% y-o-y
Russia
1.5 Mln MT +15% y-o-y
Argentina (USDA)
550 Thsd MT -8% y-o-y
Turkey (USDA)
550 Thsd MT -6% y-o-y
EU-28 (USDA)
350 Thsd MT -3% y-o-y

23. Global Factors of Influence the Market
Record oilseeds crop
Lower crude oil prices
Weather factor - drought risk in South America
US Dollar weakening

24. Conclusions
Bumper SFS crop in the Black Sea Region in 2016/17 will allow to reach record SFO production to meet growing international demand.
Out of forecasted 16.7 Mln MT of SFO production, Ukraine will produce 5.7 Mln MT or 34%.
World export of SFO in 2016/17 to reach 8.8 Mln MT, out of that 57-60% (5-5.2 Mln MT) will be supplied by Ukraine. The country has great potential to progress.
Bumper SFS crop in 2016/17 contributed to price spread reduction between SFO and other veg oils. That can increase SFO competitiveness and its import by price-sensitive markets.

25. Thank you for attention!
Svitlana Synkovska