September 9, 2004



Ukraine 2004/05 Soybean Oil Crop Seen At 300,000 MT


Ukraine's 2004/05 soybean oil crop is estimated at 300,000 metric tons, up from last year's 250,000 MT, according to the U.S. Department of Agriculture.


Executive Summary


Ukraine's oilseed production (sunflower seed, soybeans and rapeseed) in 2004 will be slightly higher than had been anticipated, However it will drop 12% from the previous year's record level as a result of reduced sunflower seed output. Although the 17% sunflower seed export duty will continue to be a constraint to trade in MY 2004/2005, sunflower seed exports will continue. Ukraine is expected to expand exports of soybeans in MY 2004/2004 while increasing imports of soybean meal due to high interest rates and the high cost of soybean processing.




Cold weather in June 2004 slowed down sunflower seed development. Warm and rainy weather in July helped to improve crop conditions, but high humidity facilitated the occurrence of fungi diseases. The sunflower seed production estimate in 2004 was increased based on the revised area to be harvested and despite reduced yield expectations.


Soybean oilseed production in 2004 is anticipated to increase to 300,000 MT due to the increase in area planted. Rapeseed production, however, is now forecast lower because of lower winter and spring rapeseed area reported by official statistics in July 2004.


Sunflower oil recovery rate will deteriorate in MY 2004/2005 due to low oil content in the seeds and poor quality of the crop as compared with the previous year. Thus sunoil production in MY 2004/2005 is now expected to be lower with no change in the crush level.




The estimates of oilseed crush, meals and oils consumption in MY 2003/2004 were reduced to reflect higher exports. Human consumption of vegetable oils in MY 2004/2005 will continue to increase as compared with the revised level of the previous marketing year and will reflect increasing consumer incomes.




The previous forecast of sunflower seed and soybean exports in MY 2004/2005 has been revised upwards to reflect higher production. MY 2003/2004 estimates of oilseeds and products trade, including trade with the EU-25, were adjusted to correspond with the most recent trade data.


High interest rates in Ukraine make soybean exports more attractive than domestic processing despite constantly increasing demand for soybean meal from the broiler feed industry. Following another record soybean crop, Ukraine is expected to increase exports of soybeans in MY 2004/2005. FOB prices of Ukrainian soybeans averaged $247/MT in MY 2003/2004 and were competitive due to close proximity to export markets in Europe and Turkey.


Note: Unlike sunflower seed exports, exports of soybeans and rapeseed from Ukraine are not restricted by an export duty.


Imports of soybean meal are likely to increase in MY 2004/2005 from the pervious year level.


Growing domestic soybean production and crush cannot meet demand from poultry feed producers. The revised estimate of soybean imports in MY 2004/2005 reflects expanding broiler meat production in Ukraine. Unfortunately, the United States will likely continue to lose soybean meal import market share due to price competition with other suppliers, the report said.

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