The experiences of sunflower production in 2003
The draught of the century caused significant shortfall of yield and profit in crop production. Besides sunflower all main field crops performed badly concerning yield. Wheat produced 2,63 t/ha, corn produced 4,0 t/ha in national average according to the preliminary reports. Of course, there were surprising exceptions when wheat produced over 5.0 t/ha and corn produced over 6,0t/ha average yield in some farms. On fields like this the good results were caused by rather favourable local weather than the agricultural technology that is usually well applied, anyway.
Sunflower proved again its good draught adaptability, this way it stepped forward to be a crop that can be produced with the lowest risk even in dry conditions. Other vegetations can not compete with sunflower in draughty seasons.
In Hungary the production area of sunflower is determined not only by the accomplishment of pre-harvest regulations but also its marketability and the price fluctuations.
In this year the high oil content sunflower was produced on 450.000 hectares in contrast with the last year where the production area was only 367.000 hectares. The production area growth was mainly caused by the high corner prices of the previous year and less by the spreading of the western corn rootworm and the sunflower sowing on the field of the frozen rapeseed. According to the preliminary estimations the average yield of the industrial sunflower will reach 1.9 t/ha despite the draught that is surprising considering the production conditions. However we can not talk about the absolute success of the sector because the corner prices did not reach the expected volume so concerning the costs/returns rate only those growers were profitable who produced yield over the national average.
The largest domestic grain corner, the BUNGE Rt. (the former CEREOL Rt.) fixed its contractual prices to the global market. Deducted from the oil price the price of the sunflower was 45.720 HUF/t in the first and 51.200 HUF/t in the second transport interval. The returns could be increased or decreased by the bonification. Fortunately the first one was more frequent. In this year the prices of the curb market exceeded the prices of the BUNGE Rt. because the importers who bought the free stocks applied daily prices, and when they contacted the growers in price-rise period they were given crop. In this year those growers earned well who sweat it out with selling their free stocks. This was risky, of course, mainly because of the unpredictable fluctuation of the HUF/USD rate.
What were the prices of the oily crops and their spin-offs determined by on the global market?
Because of the draught the sunflower yield was reduced with 20% in the EU and with 30% in Italy. Because of the low soybean yield the grain, breeze and oil supply in the US was reduced. The fall of the sunflower and soybean supply became obvious in October and so the domestic price rise of the sunflower. The domestic listing of the sunflower almost moved together with the Chicago listing of the soyabreeze concerning various contract times.
The significant domestic price rise of the sunflower was held up by the chronic absence of barges. For this reason the river forwarders aggressively increased their prices, and the exporters built the extra costs into their prices.
Generally the outstanding approximately 850.000 tons of domestic sunflower yield was sold, yet many worried about it.
What shall we expect in the EU? Are we going to be able to sell our sunflower?
Sunflower is the only main crop where the EU is not self-supplying. The average yearly import is 2 million tons from the main sunflower production regions, from East-Europe (Russia 14%, Ukraine 12%, Hungary 3,3% shares in the global production) and from Argentina that provides the 18% of the global production. By the accession Hungary becomes a significant sunflower producing country in the EU. Our market positions are not rivalled by the other accessing countries because in Poland that has the biggest crop production area among the accessing countries rapeseed is dominant. Hungary has favourable logistic conditions and is able to supply good quality sunflower for the West-European vegetable oil processing plants by and close to the Danube.
For improving our competitiveness we have to develop the quality level of sunflower production. By the application of the wide range of the state of the art methods of the agricultural technology we have to quickly raise the national average yield to 2.5 t/ha. For this goal the biological substances are given, the ecological conditions are good, the financial conditions of the application of the state of the art technology will be present in the EU - in the year of the accession probably stalling but from 2005 completely, hopefully. However we have to know that in the EU field-based subsidiary is given only for the production of the high oil content sunflower not for the table or bird food sunflower. We have to raise the attention that the intervention does not apply for sunflower so in case of market anomalies there is no sales warranty like in the case of corn. However it is a fact that the EU is self supplying from corn and not from sunflower.
The IKR Rt. is ready for the 2003/2004 contractual sunflower production season our regional centres are already contracting for the next year. The growers are able to buy the autumn starter fertilizers for assignment. The value of the assignment ensures the growers to buy the seeds, fertilizers and pesticides necessary for the application of the high level technology before sowing and throughout the whole vegetation interval. Our experts are ready to consult for the use of the input materials.
Our corporation continuously provides guarantee for safe product sales on the domestic and foreign market, as well. This activity is helped by the free movement of products and people in the EU.
Dr. Laszlo Marton
Contractual Production and Crop Trade Manager
