Global Markets: Oilseeds – Sunflower Oil Claims Record Share of Food Use

    Sunflower oil will claim a record share of global food use in MY 2019/20, rising to 12 percent. The shift towards sunflower is driven by demand for higher-quality oils as global incomes rise, resulting in consistent production growth particularly in Ukraine and Russia.

    Since 2011, sunflower oil production has expanded faster than any other oil, averaging almost 7 percent growth per year. This trend accelerated in 2019/20 as palm and rapeseed oil production fell due to unfavorable weather and planting decisions affected by China trade concerns, respectively.

    Attractive prices made sunflower oil a good “value for price” option in early 2020, resulting in elevated imports. Vegetable oil prices converged at the start of 2020, encouraging expanded purchases of typically higher-value oils including sunflowerseed.

    Sunflower oil remained cheaper than rapeseed oil from mid-February to early April, which incentivized purchases.

    China imports of sunflower oil hit an all-time high for the month of April, reaching 251,000 tons, up 85 percent from the previous record in April 2016. Sunflower oil has claimed a higher share of China’s oil for food use over time and will account for roughly 6 percent of the country’s food oil use in MY 2019/20, double its share in MY 2012/13.

    Despite this flurry of trade, elevated imports of sunflower oil are unlikely to continue into the summer. The Eurasian Economic Union’s decision in April 2020 to ban sunflowerseed exports limits input for external crushers and is expected to slow sunflower oil production.

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    As the ban is causing prices to rise, the restricted supply and higher cost may turn importers to substitute oils.

    Global demand for all oils is expected to slow in response to the economic impact of the pandemic and increase in-home cooking, holding oil consumption in MY 2019/20 flat from last year.

    While still short of the 3 percent food consumption growth prior to the pandemic, oil consumption is forecast to recover in MY 2020/21, growing at 2 percent.

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