Strategie Grains expects initial month-long halt to Ukraine oilseed supply

[PARIS] Russia's attack on Ukraine is expected to halt the processing and export of Ukrainian oilseed crops for at least a month, curbing flows of sunflower seed to the European Union, consultancy Strategie Grains said.

Russia's military intervention in Ukraine has rattled agricultural markets, with both countries being major exporters of cereals and oilseeds, leaving importers searching for alternative sources.

"For now, we have considered in our (supply and demand) balances a halt of one month to Ukrainian crushing and to exports from Ukraine, be they oil, seed or meal exports," Strategie Grains said in a monthly European oilseed report.

The firm had trimmed its forecast for 2021/22 EU sunflower seed imports, partly to factor in disruption to supplies from Ukraine, it said.

Ukraine is a major supplier of oilseed products to the EU, notably rapeseed and sunflower oil.

In its report released to clients on Friday, Strategie Grains said it had not yet assumed any curb on oilseed supplies from Russia, while it waited to assess the Western sanctions against Moscow.

A prolonged conflict in Ukraine could have a sharper impact on oilseed markets and hamper a rebalancing of world supply and demand after tensions in the past year, Strategie Grains said.

For EU production, the consultancy kept its forecast of this year's rapeseed crop unchanged at 18.2 million tonnes, up 7.4 per cent on last year.

REUTERS