EU Sunflower Production Outlook Raised by Oil World After Rain

The sunflower seed harvest in the European Union may be larger than previously expected after crops received ample rain amid mild weather, Oil World said.

Production in the EU may total 8.55 million metric tons in the 2014-15 season that started in August, 300,000 tons more than previously estimated and the second-highest ever, after the record 8.9 million tons harvested a year earlier, the Hamburg-based researcher said in a report. Prospects have improved especially for crops in Hungary and Romania, it said. Harvesting has already started in some “isolated areas” of the Balkans, according to the report.

“The exceptionally high amounts of rainfall received in Europe in July and the first half of August, while impeding harvesting and deteriorating the quality of winter and early spring crops, resulted in near-ideal growing conditions for summer crops, boosting yield prospects,” Oil World said. “A lack of crop-stressing heat in that period also promoted favorable development of EU corn and sunflowers. Some fields are now looking even better than at the same time last year when record yields were achieved.”

EU sunflower seed crushing may total 7.33 million tons in 2014-15, smaller than last year’s record of 7.61 million tons, Oil World said. Exports will fall to 700,000 tons from 710,000 tons. The EU will probably remain the top exporter because demand is increasing in Turkey, the biggest importer and a country where European shippers have a freight advantage, according to the report.

Russia, Ukraine

Combined sunflower seed output in Ukraine and Russia, the two biggest growers, may be 20.7 million tons in 2014, below last year’s record of 21.05 million, Oil World said. Farmers in the two countries had harvested about 850,000 hectares (2.1 million acres) as of Aug. 28, ahead of last year’s pace. Processing in 2014-15 was pegged at 20 million tons, also near the all-time high set the prior year, according to the report.

Increasing global demand for vegetable oils means that sunflower seed prices may be near a bottom, while bumper oilseed harvests worldwide signal that “upward potential is probably limited,” Oil World said. EU sunflower seed prices in Amsterdam were $400 a ton as of Aug. 28, unchanged in the past two weeks, according to the report.

Olive oil output in Spain, the EU’s biggest producer, is likely to “decline severely” in 2014-15 because of drought, Oil World said, without providing an estimate. The country produced 1.915 million tons in the 2013-14 season that ends Sept. 30, up from 710,000 tons a year earlier, it said. EU supplies next season may also be affected by a bacterial disease that is spreading among trees in southern Italy, according to the report.

Before it's here, it's on the Bloomberg Terminal.
LEARN MORE