QUARTERLY SUNFLOWER MARKET ANALYSIS & OUTLOOK
BULLETIN 1 OF 2015
INTRODUCTION
The following discussion is a review of Sunflower Seed market environment. The analysis is
updated on a quarterly basis1 and the interval covered in the current issue is from October 2013 to
December 2014. This period is divided into five 3 month long quarters. The key issues discussed in
the review are trends in production, prices, trade, growth and volatility.
1. PRODUCTION TRENDS
Source: Statistics and Economic Analysis
Quarter 1 (January to March), Quarter 2 (April to June), Quarter 3 (July to September), Quarter 4 (October to
December)
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Figure 1 shows the sunflower seed production and GVP from October 2013 to December 2014.
The figure indicates that the period under review opened with relatively lower volumes of sunflower
seed production and gross value. Both production volume and GVP were low from October 2013 to
February 2014 and this was followed by dramatic increase in both production volume and gross
value of sunflower production in April 2014. Sunflower seed production in September 2014 was
about 3.76% higher compared to the volumes that were available in the local market during the
corresponding month in 2013. It is also clear from Figure 1 that the GVP followed a similar trend
with production volumes over the period under analysis. The largest volume of sunflower seed
production was recorded in May 2014 (351035 tons) while the lowest harvests were recorded in
February 2014 (487 tons).
2.
PRICING TRENDS
2.1.
Domestic Sunflower Seed Producer Prices
Source: Statistics and Economic Analysis
Figure 2 shows the average producer prices of sunflower seed from October 2013 to December
2014. The figure indicates that the period under review opened with high producer prices in
October 2013 and that the price fluctuated slightly at moderate levels between October 2013 and
December 2014. In general, the producer price for sunflower seed during the period under review
ranged from R4 026/ton to R5 956/ton. The price during the closing month of the period under
analysis (December 2014) experienced a decrease of about 0.06% compared to the price of the
same product during the corresponding month in 2013.
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2.2.
Domestic Future Prices
Table 1
Commodity
Future Prices (as on 2015/02/27)
March 2014
May 2015
Sunflower Seed
R5115.00/t
R5105.00/t
Source: South African Grain Information Services (SAGIS)
July 2015
R5180.00/t
Table 1 indicates that as of 27 February 2014, the sunflower seed contracts in March 2014 are
expected to be trading at an average price of R5 115.00/ton and expected to decline in May 2015
to an average price of R5 105.00/ton. The prices are expected to increase and reach R5180/ton in
July 2015.
3. SUNFLOWER SEED IMPORTS AND EXPORTS
The exports of sunflower seed for the period October 2013 to December 2014 are presented in
Figure 3 below.
Source: Statistics and Economic Analysis
Figure 3 shows that exports of sunflower seed were highly volatile throughout the period under
analysis. The figure indicates that the period under analysis opened with high volumes of sunflower
seed exports in October 2013. The highest volume of sunflower seed exports were recorded in
June 2014 (151 tons) while the lowest were recorded in April 2014(1 ton). In general the volume
and value of sunflower seed exports were very inconsistent throughout the period under analysis.
The period under review closed with relatively moderate volume of sunflower seed exports in
December 2014.
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Source: Statistics and Economic Analysis
Figure 4 depicts the monthly imports of sunflower seed by South Africa from October 2013 to
December 2014. The period under review opened moderate imports volumes of sunflower seed in
October 2013. The volume and value of sunflower seed maintained an irregular trend between
October 2013 and December 2014. The highest increase in the volume and value of imports was
recorded in January 2014 (61 800 tons) while the lowest were recorded in August 2014 (40 tons).
The period under analysis closed with moderate volumes of imports of 29 6200 tons in December
2014.
4.
PARITY PRICES
According to this market analysis bulletin the export parity price is defined as the price that farmers
receive if they sell their Sunflower Seed on the international market. These prices are calculated by
adjusting the international commodity price by a factor to account for the difference between the
location and the quality of Sunflower Seed, as well as the costs that are incurred to export the
Sunflower from Durban or Cape Town. The import parity price reflects the price that Sunflower
crushers, traders and feed manufacturers would pay if they had to buy imported sunflower seed.
4.1 Indicative Import Parity Prices
For traders and feed manufacturers who would like to import sunflower seed from the European
Union, Table 2 gives the indicative import parity price that they are likely to pay.
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Table 2: Indicative Import Parity Prices (2015/03/13)
Country
Import Parity Price
FOB Value ($/ton)
Freight rate ($/ton)
Insurance ($/ton)
Cost, Insurance and freight ($/ton)
Cost, Insurance and freight (R/ton)
Financing Costs (R/ton)
Cost, Insurance, Freight and Financing
Costs (R/ton)
Discharging costs (R/ton) at:
 Cape Town Harbor
 Durban Harbor
Import Tariff
F.O.R (R/ton) at:
 Cape Town Harbor
 Durban Harbor
Delivered Price: Durban – Randfontein
 Railage (R400.09/ton)
Delivered price (R/ton)
Exchange rate (1$=)
Source: SAGIS
France
398.00
22.00
1.19
421.19
5121.92
38.94
5160.86
N/A
225.09
0.00
N/A
5385.95
400.09
5786.04
12.16
The table 2 indicates that a ton of sunflower seed from the European Union costs US$398.00. The
cost of moving the product (sunflower seed) from the EU to South Africa is estimated at US$22.00
per ton and the insurance costs US$1.19/ton. Sum of the above makes up the CIF price, which is
US$421.19 for a ton of sunflower seed. This is equivalent to R5121.92. When financing costs of
R38.94/ton, discharging costs of R225.09/ton and an import tariff of R0.00/ton are added, a ton of
sunflower seed would cost R5385.95/ton at the Durban harbour. After taking into account the cost
of moving the product from Durban to Randfontein (R400.09/ton), a ton of sunflower seed would
cost the inland importers about R5786.04, taking into account an exchange rate of R12.16 to a US
Dollar.
5. GROWTH, VOLATILITY AND STABILITY
Sunflower industry growth was calculated from the regression analysis results. The volatility and
stability measures were determined by calculating the coefficient of variation for the various
sunflower industry statistical series. The formula for these values is as follows:
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Growth Rate
where:
G = [(B – A)/A]*100
G
B
= Growth Rate
= Values of Variables during the closing month of
the duration under analysis
= Values of Variables during the corresponding
month of the previous year.
A
Volatility and stability analysis
V
    xi     
 
 
N
 
 
where:
V


xi
N
= Coefficient of Variation
= Standard deviation
= mean
= observation in months i
= Number of months
The results or the outcomes of these calculations are presented in Table 3. They are calculated
using monthly statistics and covered the same five quarter period under review starting from
October 2013 to December 2014.
Table 3: Sunflower Seed Industry Growth Rates and Variation Coefficients (October 2013 to
December 2014)
Category
Subcategory
Growth Rate (%)
Coefficient of variation
Production Volume
Gross Value
Volume
Value
375.74
346.24
1.86
1.86
Producer Prices
Value
-6.20
0.12
Exports
Volume
Value
-45.30
-39.40
0.98
0.93
Imports
Volume
13224.38
1.83
Value
1631.75
1.78
Source: Calculated from Statistics and Economic Analysis data
Table 3 indicates that domestic sunflower seed production volume increased by 375.4% while the
gross value increased by about 346.24% in September 2014 compared to the corresponding
month in 2013. The producer prices for sunflower seed decreased by 6.20% over the same period.
On the other hand, exports of sunflower seed decreased by 45.30% in volume and -39.40% in
value while imports decreased by 13224.38% and 1631.75% in volume and value respectively.
Table 3 also indicates that producer prices, exports volume and value were relatively stable over
the period under review while all other variables were considerably volatile.
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6. ACKNOWLEDGEMENT
Acknowledgement is given to the following information sources:
1. Directorate: Statistics and Economic Analysis
www.daff.gov.za
2. South African Grain Information Services
www.sagis.org.za
For more information contact:
Director: Marketing
Tel: (012) 319 8455
Fax: (012) 319 8131
E-mail: [email protected]
Deputy Director: Commodity
Marketing
Tel: (012) 319 8081
Fax: (012) 319 8077
E-mail: [email protected]
Senior
Agricultural
Economist: Field Crops
Marketing
Tel: (012) 319 8080
Fax: (012) 319 8077
E-mail: [email protected]
_____________________________
Disclaimer: This document and its contents have been compiled by the Department of Agriculture,
Forestry and Fisheries for the purposes of detailing the sunflower seed industry. Anyone who uses
this information does so at their own risk. The views expressed in this document are those of the
Department with regard to the industry, unless otherwise stated. The Department therefore,
accepts no liability for losses incurred resulting from the use of this information.
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