Ukraine Establishes Export Quotas for Sunflower Oil & Seeds

Ukraine has imposed export quotas for sunflower oil and sunflower seeds, effective March 22, in the amount of 300 ths mt and 1 mt, respectively, until July 1, 2008. Last week Ukraine’s Agriculture Minister Yuriy Melnik said that government quotas were designed to stop rising domestic sunflower oil prices, which have grown 17.4% YTD. Anna Dudchenko: Export restrictions should result in a reorientation of sunflower oil and seed sales to the domestic market, which, according to expectations of market players, may depress local prices for seed by as much as 30% and for oil by up to 20%. The effect of this on margins of sunflower oil producers, such as Kernel (KER PW: N/R) and Creative Group (CREA: N/R) is not clear yet as export quota allocation between the producers has not been finalized. We expect both stocks to not be materially affected by this news at the moment.