Ukraine Shift on Sunflower-Seed Exports Calms Cooking-Oil Market Rocked by War

In recent months, Ukrainian farmers have eschewed crushing seeds at home to make the oil. Instead, they are sending huge volumes of uncrushed seeds to foreign buyers, who do the processing themselves. Seed-crushing and power infrastructure in Ukraine have been damaged by the war, and ports dedicated to sunflower-seed oil exports are still essentially closed.

Ukraine exported 190,000 tons of seeds in January, according to SovEcon. That compares with 4,000 tons in January 2022, the month before the invasion, and 12,000 tons in January 2021.

The U.S. Agriculture Department expects global sunflower-seed exports to hit 2.65 million tons in the 2022-23 agricultural season, which runs through August, up from 1.62 million tons last year. Ukraine shipped 191,000 tons in 2020-21, before the war.

“The Russian invasion of Ukraine has fundamentally rewritten the trade flows around the country’s iconic sunflower market,” said

Anna Platonova,

oilseed-price analyst at U.K. price-reporting agency Fastmarkets.

Once cleaned, sunflower seeds are ground and pressed through a set of rollers or mills to extract oil. The oil is refined with heating and chemical additives to remove impurities before being packed and sold.

Before the war, much of that process was done inside Ukraine. Now, the task is being outsourced to such an extent that it has stabilized a global cooking-oil market that went haywire in the wake of Russia’s invasion of Ukraine.

Key exporting ports were bombed or threatened by Russian forces, while Moscow blockaded most agricultural shipments. Prices of other cooking oils, such as palm oil and canola oil, all rose sharply amid a shortage of Ukrainian-supplied sunflower-seed oil. 

The Seed Crushers and Oil Processors Association, a U.K. trade body, says the greater supply of seeds now making it out of Ukraine by both sea and land routes has allowed European seed crushers to help make up for the lost supply of oil coming out of Ukraine, pushing prices lower.

Soaring cooking-oil prices contributed to wider food inflation around the world by boosting the cost of preparing many foods, both dishes served at restaurants and ready-made staples such as potato chips. In late March, sunflower-seed oil peaked at over $2,414 a ton. Recently, that has fallen by more than half, to about $1,049 a ton, according to price-reporting agency Mintec.

“We’ve noticed shorter supply-chain timelines on sunflower oil, and the pricing has right sized compared with the beginning of the Ukraine war,” said

Dave Gaucher,

founder of Wholly Veggie, a Canadian based producer of plant-based snack foods. 

Prices started to fall after the successful startup of a grain corridor out of Ukraine last year. A United Nations-backed deal allowed for ships laden with agricultural products to depart certain Ukrainian ports unharassed by Russian warships. While grain made up the majority of those shipments, sunflower growers started loading their seeds onto ships as well. 

So far, the grain deal has included three ports: Odessa, Chornomorsk and Pivdennyi. Ukrainian officials are pushing to include other ports, such as Mykolaiv, once a hub of Ukraine’s sunflower-seed oil trade, in the agreement, said a spokeswoman for Ukraine’s Infrastructure Ministry. The deal needs to be renewed this month.

—Matthew Luxmoore contributed to this article.

Write to Yusuf Khan at [email protected]

In recent months, Ukrainian farmers have eschewed crushing seeds at home to make the oil. Instead, they are sending huge volumes of uncrushed seeds to foreign buyers, who do the processing themselves. Seed-crushing and power infrastructure in Ukraine have been damaged by the war, and ports dedicated to sunflower-seed oil exports are still essentially closed.

Ukraine exported 190,000 tons of seeds in January, according to SovEcon. That compares with 4,000 tons in January 2022, the month before the invasion, and 12,000 tons in January 2021.

The U.S. Agriculture Department expects global sunflower-seed exports to hit 2.65 million tons in the 2022-23 agricultural season, which runs through August, up from 1.62 million tons last year. Ukraine shipped 191,000 tons in 2020-21, before the war.

“The Russian invasion of Ukraine has fundamentally rewritten the trade flows around the country’s iconic sunflower market,” said

Anna Platonova,

oilseed-price analyst at U.K. price-reporting agency Fastmarkets.

Once cleaned, sunflower seeds are ground and pressed through a set of rollers or mills to extract oil. The oil is refined with heating and chemical additives to remove impurities before being packed and sold.

Before the war, much of that process was done inside Ukraine. Now, the task is being outsourced to such an extent that it has stabilized a global cooking-oil market that went haywire in the wake of Russia’s invasion of Ukraine.

Key exporting ports were bombed or threatened by Russian forces, while Moscow blockaded most agricultural shipments. Prices of other cooking oils, such as palm oil and canola oil, all rose sharply amid a shortage of Ukrainian-supplied sunflower-seed oil. 

The Seed Crushers and Oil Processors Association, a U.K. trade body, says the greater supply of seeds now making it out of Ukraine by both sea and land routes has allowed European seed crushers to help make up for the lost supply of oil coming out of Ukraine, pushing prices lower.

Soaring cooking-oil prices contributed to wider food inflation around the world by boosting the cost of preparing many foods, both dishes served at restaurants and ready-made staples such as potato chips. In late March, sunflower-seed oil peaked at over $2,414 a ton. Recently, that has fallen by more than half, to about $1,049 a ton, according to price-reporting agency Mintec.

“We’ve noticed shorter supply-chain timelines on sunflower oil, and the pricing has right sized compared with the beginning of the Ukraine war,” said

Dave Gaucher,

founder of Wholly Veggie, a Canadian based producer of plant-based snack foods. 

Prices started to fall after the successful startup of a grain corridor out of Ukraine last year. A United Nations-backed deal allowed for ships laden with agricultural products to depart certain Ukrainian ports unharassed by Russian warships. While grain made up the majority of those shipments, sunflower growers started loading their seeds onto ships as well. 

So far, the grain deal has included three ports: Odessa, Chornomorsk and Pivdennyi. Ukrainian officials are pushing to include other ports, such as Mykolaiv, once a hub of Ukraine’s sunflower-seed oil trade, in the agreement, said a spokeswoman for Ukraine’s Infrastructure Ministry. The deal needs to be renewed this month.

—Matthew Luxmoore contributed to this article.

Write to Yusuf Khan at [email protected]