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World Sunflower-Oil Production Seen Climbing on Expanding Crops

World production of sunflower oil will rise in the coming season as larger flower crops in Russia and Ukraine boost processing margins, Oil World said.

Output of the oil will climb to 14.7 million metric tons in the year through September 2014 from 13.6 million tons in 2012-13, the Hamburg-based industry researcher wrote today in an e-mailed report. Production was a record 15.1 million tons in 2011-12, Oil World said.

Demand for sunflower oil may rise by 500,000 to 600,000 tons in 2013-14, trailing gains in production as supplies of competing vegetable oils expand, according to Oil World. That will boost sunflower-oil stockpiles, it said.

“Assuming that the growth of domestic usage will be below that of production, primarily in Ukraine and partly also in Russia, we expect a pronounced recovery of world sunflower-oil export supplies next season,” Oil World wrote.

Increased supply will benefit “price-sensitive markets” including India, Egypt and Iran, according to the researcher.

Farmers in Ukraine may harvest 9.4 million tons of the oilseed and Russia will produce 8.6 million tons, with increased output “shifting bargaining power back to the crusher and allowing a strong pickup of domestic processing in both countries,” the researcher said.

Sunflower-seed prices in the Black Sea region dropped to $420 a ton as of July 18 from $440 a week earlier, compared with $604 in July 2012, Oil World wrote.

To contact the reporter on this story: Rudy Ruitenberg in Paris at rruitenberg@bloomberg.net

To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net

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