Wandile Sihlobo, Agbiz

The SAFEX sunflower seed market started yesterday’s (7 May 2018) trade session on a positive footing, but lost ground towards the end of the session and settled in negative territory. The spot price was down by a percentage point from the previous day, closing at R4 570 per ton. This was underpinned by bearish sentiment emanating from increased commercial selling, as well as harvest pressure.

From a supply perspective, South Africa’s sunflower seed industry has grown significantly since the dawn of democracy, from 366 000 tons in the 1993/1994 production season to an expected 792 255 tons in the 2017/2018 production season. This has been driven by a combination of factors which include an increase in area plantings, better farming practices and technological advancement, amongst others. This, in turn, was stimulated by an uptick in consumer demand for sunflower oil.

Although this is commendable progress, South Africa remains a small player in the global market, ranked 12th and accounting for a mere 2% share in global sunflower seed production in the 2017/2018 season, according to data from SUNSEEDMAN.

The world’s leading sunflower seed producers are Ukraine, Russia, Argentina, China, Romania and Hungary, respectively accounting for 28%, 22%, 7%, 6%, 5%and 4% shares of global harvest of 48.3 million tons in the 2017/2018 season.

In terms of trade, the leading exporters of sunflower seed are Romania, Bulgaria, Moldova, Hungary, France and China. The overall global sunflower seed exports typically average 4.7 million tons a year.

From a demand front, the world’s leading sunflower seed importers are Netherlands, France, Spain, Turkey, Germany, Italy and Portugal. In some of these countries, namely France, Netherlands and Turkey, the sunflower seed is processed and thereafter re-exported to the world as oil.

Looking ahead, the 2018/2019 global sunflower seed production could recover by a percentage point from the previous season to 48.8 million tons. The uptick is driven by expected better harvest in the Black Sea countries, particularly Ukraine and Russia. – Wandile Sihlobo, Agbiz

Wandile Sihlobo, head of economic and agribusiness intelligence at Agbiz, shares highlights in his update on agricultural commodity markets. Click here for the full report on agri markets for the major commodities.

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