Average numbers expected for 2013-14 Argentine confection sunflower campaign

By Dario Bard

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In Argentina, the majority of the confection sunflower crop is seeded between the months of September and October. As planting gets underway, IFT checks in with industry experts to see how the 2013-14 Argentine confection sunflower campaign is shaping up.

Planted Area

In the absence of official numbers on the Argentine confection sunflower crop, the best available figures on the planted area for the 2013-14 campaign come from industry experts.

Enrique Goldaracena, marketing director for Argensun, the company that handles 70% of the nation’s confection sunflower exports, says he’s heard estimates of 100,000 hectares planted, but calculates the actual figure may be a bit lower, between 80,000 and 90,000 hectares.

“Basically, we expect this year’s planted area to be very close to last year’s,” says Goldaracena.

Based on his subjective observations, Sergio Casas, President of Snack Crops, has arrived at a similar evaluation. “In general, we are not seeing increased planting or planting intention on the part of producers.”

José Maranessi of Farm Products agrees, and states, “We have no plans to increase volume, but we also don’t intend to lose our market share.” He points to a non-market factor that might be of concern: the adverse impact of the eared dove on the oilseed sunflower crop in the prime sunflower-producing region of the Pampa. “This is causing farmers significant losses,” says Maranessi. Eared doves generally pass over Argentina confection sunflower crops with their bigger shells in favor of satiating their appetites on the more vulnerable oilseed varieties. For this reason, Maranessi suspects the planting intention may be higher this campaign, as some growers may switch from oilseed to confection sunflower.

Casas, however, doesn’t believe there will be many switchers. “I see it as more of an argument exporters make when contracting planting area. It has been demonstrated that the eared dove problem impacts oilseed more than confection sunflower, but we haven’t had producers knocking on our door wanting to switch over.” Casas also makes the point that the confection sunflower market is a volatile one, as are other specialty crop niche markets; even small changes in supply and demand have disproportionate impacts on price. “It is important,” warns Casas, “for the producer to have a clear understanding of global demand and a buyer lined up, preferably a reliable exporter with a proven track record, so as to avoid unpleasant surprises down the road.”

Maranessi agrees, and makes the point that a producer’s decision to switch to confection sunflower ought to be governed by market logic, not by the eared dove. “If a producer plants confection sunflower without having determined how he is going to commercialize it, he’s making a big mistake.” Additionally, Maranessi says confection sunflower also poses challenges in the processing stage, requiring sizable storage capacity so that the product can be commercialized over the course of the year and bottlenecks can be avoided as the varying calibers are sorted.

Sebastian Monticelli of Novagro can attest to the wisdom of such warnings. “We have clients who grew confection sunflower last year. Those who grew it under contract didn’t have a problem, but those you didn’t weren’t able to sell.” Novagro is based in northern Cordoba Province and aims to work with all the specialty crops that can be grown in the area. They had hoped to start with confection sunflower this campaign, but were unable to obtain seed. “Sunflower tolerates drought conditions well, and in this area, we’ve had four consecutive years of drought, of varying intensity, and it’s been a problem.”

Production Estimates

Casas expects the 2013-14 campaign to be typical. “Excess water is to sunflower what the scarcity of water is to corn. The weather has been neutral in this respect, and so we are expecting a normal campaign, with normal yields and production, which is 7,000 to 10,000 MT in the case of Snack Crops, and we don’t expect Argentina’s total production will exceed what is normal and typical.”

At Farm Products, Maranessi reports, “Conditions are normal. Although some confection sunflower growing areas are dry, they are not in a condition of concern at the moment. We expect normal yields. At present, there are no indicators of a bad year. Of course, we’ll have to keep an eye on the weather in the coming months.” Farm Products typically produces around 7,000 MT annually.

Based on average estimated yields of about 1.7 MT to 2 MT per hectare, Goldaracena estimates total Argentine confection sunflower production at between 120,000 and 150,000 MT for the 2013-14 campaign.

Exports

Argentina averages 4,000 to 6,000 MT of confection sunflower exports per month, according to Goldaracena. As trading enters the final quarter of the calendar year, he notes, “These are the months of greatest demand.” As a result, export volumes may be closer to 7,000 MT, he says.

“We are coming out of a slow period,” says Maranessi. July and August, in his opinion, tend to be slow months for trading for two reasons. First, because they are the hottest months in the northern hemisphere and people tend to go on vacation, reducing their sunflower consumption. Second, the Muslim world observed Ramadan during those months. “Our hope is that in September through to the end of the year, demand will pick up again and we’ll return to the export volumes of earlier this year.” Like Goldaracena, he estimates monthly exports of 7,000 MT and expects total confection sunflower exports for 2013 to total 85,000 MT.

Casas cautions that the industry ought to keep an eye on China’s confection sunflower production this year, which is expected to enter the market in October. Last year, that nation’s domestic confection sunflower consumption increased significantly, says Casas, and so China did not have a surplus to export. “This has been reflected in the prices we’ve been seeing,” says Casas. “But that was last year. We’ll have to wait and see what happens this year.”