Ukraine sunflower yield drops 11% yoy as of Nov. 3

Ukrainian farmers harvested 11.2 mmt of sunflower
seeds from an area of 5.7 mln ha, with an implied yield of 1.96 t/ha, the
Agrarian Ministry reported on Nov. 3. The yields are 11.1% less than a year ago
(2.21 t/ha as of Nov. 3), when farmers harvested 12.6 mmt of sunflower seeds
from 5.7 mln ha. The total area of planted sunflower is about 5.9 mln hectares,
about the same level as last year when the total sunflower harvest was 13.6 mmt
at an average yield of 2.24 t/ha.

Andriy Perederey: Ukrainian
farmers harvested almost 97% of their total planted area with lower yields than we expected (10% less
yoy).  Also, the sunflower yield in 2017 is the lowest in the last three
harvesting seasons. The lower sunflower harvest will intensify competition
between seed crushers, which may result in reduced profitability of their oil
production.

This is in line with top sunoil producer Kernel’s
expectations of margins faling – which does not rule out a further decline in EBITDA per ton of sunoil this season – from the
company’s record-low level in this decade of USD 77/t in FY2017.