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Russia’s Sunflower Export Restrictions Will Push Vegetable Oil Prices Higher

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Russia banned sunflower seed exports, effective today, and announced a mid-April through end of August export quota for sunflower seed oil. The move, coming on top of export disruptions from the Russia-Ukraine war, could further boost already elevated global vegetable oil prices. 

Russia is the largest exporter of sunflower seeds and the second-largest exporter of sunflower seed oil, giving its actions outsize influence on vegetable oil markets. Russia said it enacted the trade restrictions to help control domestic prices. 

Sunflower seed oil accounts for just 10% of global vegetable oils, but global vegetable oil supplies have been tight for so long that any new disruptions will have a significant impact. 

Reduced sunflower exports from Russia come as exports from Ukraine, the biggest producer of sunflower seeds and the largest exporter of sunflower seed oil, are also constrained. In Ukraine, sunflower seeds are typically sown this month and next, with harvests in September. 

For the past year, persistent tightness in vegetable oil supplies and a rebound in demand have pushed prices sharply higher, including a 37% jump for soybean oil and a 58% rise for palm oil, the most commonly used vegetable oils. 

Edible oils, which are used by nearly all consumer packaged goods companies, are often interchangeable, so a shortage of one type exerts pressure on the others. Typically, sunflower seeds are crushed for meal and oil. 

Combined, Russia and Ukraine export 76% of global sunflower supplies, and because the ongoing war has limited exports out of Black Sea ports, importers have been forced to look elsewhere for supplies. Turkey, Bulgaria, Kazakhstan, Belarus, China, and Romania are major buyers of Russian sunflower seeds, and China, Turkey, India, and Egypt are the top buyers of Russian sunflower seed oil.  

Russia’s new sunflower product export restrictions are just its latest efforts to control high domestic food prices. In March, Russia imposed fresh restrictions on grain exports, as Gro wrote about here

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