India Leads Argentina’s Sunseed Oil Export Market
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Although Sunflower in Argentina has been giving way to other crops, Sunflower complex remains one of the leaders in agribusiness exports. During the last few years, Sunflower has remained one of the main grains produced in the country. Argentina is a major player in the world market of Sunflower oil, positioning itself as the 4th biggest producer and the 4th main exporter, ranking after Russia, Ukraine and the European Union.
The Sunflower planted arear are distributed in the territory of nine Argentine provinces, highlighting among them the participation of Buenos Aires (54% of the planted area in Argentina), Chaco (16%), Santa Fe (13%) and La Pampa (9%). These four provinces then implant more than 90% of the surface implanted in the country.
The country produced 3.4 million tons of Sunseeds in 2021-2022. According to the United States Department of Agriculture, Sunflower Seeds planted acreage is projected up at 2 million hectares for marketing year (MY) 2022/23, with total production estimated at 4 million tons in response to high prices.
Other forecasts show that the production of Sunflower Seeds can reach 4.65 million tons in Argentina in the new season, which is significantly higher than 3.4 million tons in the previous MY and is maximum for more than 10 seasons. It will be possible due to a significant expansion of the planted areas under Sunflower Seeds to 2.2 million hectares compared to 1.67 million hectares of the last season.
Thanks to the increase in production, Argentina is also improving its Sunflower Seeds processing prospects. In 2022/23 MY, Argentina can process 4.25 million tons of Sunflower Seeds (+22.3% y/y), which will be a new record. Thus, production of Sunflower oil may increase to a record 1.8 million tons, and exports may exceed 1 million tons. As per AgFlow data, India was the largest export market of Argentinian Sunseed Oil with 481,000 tons in 2021-2022, followed by the Mexico, Iran, and Iraq.
A similar situation will be observed in the segment of Sunflower meal, where production may increase to 1.7 million tons (+22.3% y/y), and export to 1.3 million tons (+27% y/y).
As to the prices, a peak for Sunflower oil and other vegetable oils already appears passed. Amid the projected increase of Sunflower oil production in Argentina, prices for the product for delivery in January 2023 may fall to about 1500 USD per ton FOB at the country’s ports, compared to about 2400 USD per ton FOB in February (after the start of the war in Ukraine).
Argentinian Sunseeds Derivatives
Regarding the uses of the Oilseeds, most of the crop is destined to the oil industry. On average, over 83% of the amount produced each year is destined to oil production, and the events in 2019/20 emerge as the only exception (during this crop season, industrialization represented 75% of the production obtained). Meanwhile, during the current crop season, it is forecast to industrialize 2.8 million tons of Sunflower; that is to say, a volume even higher than the grain obtained. This is due to the fact that a high level of stocks remained available for processing during the current year because of the low volume industrialized during the previous crop.
In fact, for the current year, Sunflower Seeds, meal/pellets and oil exports are forecast to reach 1,024 USD million, making it the 4th main complex of the agribusiness sector, only behind the three big: soybean, corn and wheat. Out of this total, most of it is accounted for by oil, reaching 773 USD million, while Seeds and meal/pellets would reach 130 USD and 121 USD million, respectively. Besides, this would represent a 25% increase from the value obtained in 2020.
Sourced from: https://www.bcr.com.ar/
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