Ukraine export woes prompt NZ sunflower oil business to amend plans

Millions of sunflowers on a farm in South Canterbury that are harvested for sunflower oil. Photo / Supplied - Andrew Darling

By Sally Murphy of RNZ

A New Zealand company is looking to more than treble its production of sunflower oil in response to global shortages.

Ukraine is the world's largest producer of sunflower oil but due to the war, its production is expected to be down 40 per cent this season.

In a normal year, it produces 7.5 tonnes of sunflower oil, and 7 million tonnes are exported.

Ukraine's main sunflower oil producer is Kernel, its chief executive Ilevgen Osypov told CNN they're struggling to get product to ports for export.

"Despite the war, Ukraine farmers have started to plant for this season, but our estimation is only about 60 per cent will be planted compared to last year which means a huge decrease in the amount we are producing.

Photo / RNZ - Hugo Cameron

"Ninety-four per cent of export volumes go through seaports - but the ports are all blocked by the military."

Osypov said the drop in plantings and exports will cause a spike in price globally.

New Zealand's Ministry of Foreign Affairs and Trade said the country imports $25 million of goods a year from Ukraine - the main one being sunflower oil.

New Zealand company Pure Oil has been growing sunflowers for oil for the last five seasons.

Company managing director Nick Murney said it started as a niche product for the company but it is looking to ramp up plantings due to the global situation.

"I've just come out of a meeting on this exact point. The suppliers are not just short; they just can't get product in. So demand is high because a lot of the chip makers and the snack food manufacturers in New Zealand use sunflower oil.

"So next season we are looking to offer a really high contract to arable growers to see if we can increase our planted area from 300 hectares to 1000 hectares."

Murney is confident Pure Oil will be able to find enough farmers to meet the target.

"With the price going up we will be able to offer a really good contract to farmers. Sunflowers are a really great crop to grow as well; it's a low input crop so you don't need a lot of urea which means good margins."

- RNZ