Feb. 4 (Bloomberg) -- Political unrest in Ukraine, the biggest sunflower producer and a major exporter of corn, should be monitored as an escalation of turmoil may have “significant repercussions” on agricultural trade, Oil World said.
Ukrainian sunflower seed oil exports this year through September may total 2.78 million metric tons, up 30 percent from a year earlier and accounting for more than half of world trade, the Hamburg-based researcher estimates. Ukraine has been rattled by anti-government demonstrations, claiming at least eight lives with about 1,000 injured, since President Viktor Yanukovych snubbed a European Union cooperation agreement in November in favor of closer ties with Russia.
“Escalating violence and political turmoil in Ukraine, if turned into a full-scale civil unrest, would have significant repercussions on the international agricultural trade flows,” Oil World said. “Although everybody hopes that the worst-case scenario will not occur, further developments and the effects on trading activity, as well as the financial sector, will have to be watched closely.”
Ukraine’s oilseed production reached an all-time high in 2013, including a record 11 million tons of sunflower seed, Oil World said. The country’s corn exports are estimated at 18 million tons in the 2013-14 season, 41 percent higher than a year earlier when crops were hurt by drought, U.S. Department of Agriculture data show. That would make Ukraine the world’s third-largest corn exporter, after the U.S. and Brazil, according to the USDA. Ukraine is also the third-biggest exporter of rapeseed, after Canada and Australia.
World supplies of canola, a variety of rapeseed, may be tight from February through June as a shortage of rail cars slows shipments from Canada, Oil World said. Australia will have shipped about 82 percent of its exportable supply by the end of April, leaving only about 500,000 tons to export by the end of the season in October, it said. That compares with 890,000 tons shipped in the same six months a year earlier.
Separately, Oil World said Iran’s imports of vegetable oils and fats, used in cooking, will fall 19 percent in the 2013-14 season ending in September amid ample stockpiles in the country. Purchases may total 1.7 million tons from a record 2.1 million tons a year earlier, according to the report. Iran is the world’s third biggest importer of soybean oil, after China and India, according to the USDA.
--Editors: Whitney McFerron, John Deane