USDA experts left the oilseed crop estimate for the Black Sea region unchanged in the January report. At the same time, the forecast for world soybean production and exports has been lowered due to revised estimates for South American countries, primarily due to the dry weather conditions observed in the region.

• According to the World Bank forecast, the average annual price of soybean oil will increase in 2022 by almost 4% to $1425 per ton. The main factor driving this growth will be increased demand for biofuel, especially in Asia. During 2021, the average annual price of soybean oil increased by 65% compared to the previous year — from $838 to $1385 per ton;
• According to a Nasdaq report, vessels transporting agricultural crops in Argentina are forced to leave the country’s main ports with a 30% reduced load due to the record drop in water levels in the Parana River. The water level in the Parana River reached its lowest mark since late 2019 in January due to dry weather conditions;
• USDA reports that India has imposed limits on soymeal stocks from December 23, 2021, to June 30, 2022, in an attempt to curb the rise in domestic prices. The introduction of soymeal stock limits may reduce processing, which, in turn, will lead to increased availability of soybeans and potentially keep soybean prices under control;
• According to a statement by the Ministry of Agriculture of China, soybean production in the country is planned to increase by approximately 40% compared to the current level by the end of 2025 – up to 23 million tons. In 2021, it decreased by 16% compared to the 2020 level – down to 16.4 million tons.

The forecast for the oilseed harvest in the Black Sea region in the 2021/22 MY remains at 52.1 million tons (sunflower ‒ 36.85 million tons, soybeans ‒ 8.61 million tons, rapeseed ‒ 6.63 million tons). Ukraine remains a key oilseed producer in the region. Gross harvest of Ukrainian sunflower production in the 2021/22 MY is expected to amount to 17.5 million tons, soybeans ‒ 3.7 million, and rapeseed ‒ 3.05 million tons.

The forecast for global soybean production and exports has been lowered due to revised estimates for South American countries, mainly due to the drought conditions observed in the region. Thus, the forecast for global soybean production in the 2021/22 MY was reduced by almost 10 million to 372.5 million tons (compared to 381.7 million tons in the previous estimate), which is nevertheless still significantly higher than the level of the previous season (366.2 million tons). Global soybean exports in the current season are expected to be 170.7 million tons, which is also lower than the previous forecast (172.3 million), but higher than the indicator in the last MY (164.7 million).

According to our price monitoring data, predominantly positive price adjustments were recorded in the domestic markets for key oilseeds and their processed products during the reporting period.

In the sunflower segment, prices continued to rise during the reporting week. On an EXW basis, sunflower seeds became 5.4% more expensive, while on CPT-plant terms, they increased by 5.3%. The market is showing a revival of business activity after the winter holidays. Oilseed raw material prices rose against the backdrop of a general upward trend in vegetable oil prices (primarily palm oil) on the global market.

An additional factor supporting prices was the publication of reduced soybean production forecasts in South America and the growth of oil futures.

Ukrainian-produced sunflower oil on an FOB basis in the Black Sea ports, however, adjusted downwards at the end of the reporting period after a significant price jump last week, trading in the range of 1340-1355 $/t.

In December 2021, 690 thousand tonnes of Ukrainian-produced sunflower oil were supplied to foreign markets (+16% compared to December 2020). At the same time, the cumulative export of Ukrainian sunflower oil during September-December 2021 is still 6% lower than the corresponding figure for the same period in 2020 (according to OilWorld).

Soybean prices on the domestic market also rose slightly during the reporting week. On an EXW basis, soybeans traded in the range of 15600-16000 грн/т. On CPT-port terms, the oilseed occupied the price range of 16400-16800 грн/т.

In the rapeseed segment, prices were mostly stable the previous week, maintaining high positions on both domestic and export bases. Thus, on FOB terms, they fluctuated in the range of 765-775 $/t.