Ukraine is the largest producer of sunflowers in the world.
Chuck Penner, with LeftField Commodity Research, says in the last few years, they've often accounted for about 30 per cent of the total global crop. He notes the sunflowers are crushed in Ukraine and then the oil is exported.
He talked about the impact of the war.
"The difficulty right now is that crush plants in Ukraine have largely shut down, so there is no oil being produced or being exported. The one effect is a short-term shortfall in global sunflower oil production and supplies. If sunflowers are 40 per cent oil, that's a whole lot of tons of oil that's simply not making it to market. That spills over and causes buyers and importers to switch to other oils like palm oil or soy oil or if it was available more canola oil as well too."
Penner says in the coming weeks, Ukrainian farmers will have difficulty getting the crop planted, so next year's crop will also be threatened, leading to short supplies.
He notes to a large extent, the North American sunflower markets have often been insulated from what goes on in the global market. The reason for this is because not a lot of sunflower oil gets exported from the U.S. and Canada. Most of it is consumed domestically. That could change however with the sharp decline from Ukraine.
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