Spotlight on sunflower seed market

• The SAFEX sunflower seed market started yesterday’s 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 tonne. 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 tonnes in 1993/94 production season to an expected 792 255 tonnes in 2017/18 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 number 12th and accounting for a mere 2 percent share in global sunflower seed production in 2017/18 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 percent, 22 percent, 7 percent, 6 percent, 5 percent and 4 percent shares of global harvest of 48.3 million tonnes in the 2017/18 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 tonnes 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 2018/19 global sunflower seed production could recover by a percentage point from the previous season to 48.8 million tonnes. The uptick is driven by expected better harvest in the Black Sea countries, particularly Ukraine and Russia.

Read full report by Wandile Sihlobo below:

Agbiz Morning Market Viewpoint on Agri-Commodities 08 May 2018