product-factsheet-sunflower-oil-europe-vegetable-oils-oilseeds-2014.pdf

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Source: CBI Market Information Database • URL: www.cbi.eu • Contact: [email protected] • www.cbi.eu/disclaimer

Source: Seed Oil Press

CBI Product Factsheet:Sunflower oil in the EUand EFTA‘Practical market insights into your product’

Sunflower oil consumption is increasing at a fast pace in Europe.

Although sunflower seeds are cultivated and crushed in Europe, alarge share of the sunflower oil imports comes from the Black Sea

area, with Russia and Ukraine as main supplying countries. A

growing segment in the European market is high oleic sunflower

oil, originating from hybrid sunflower seeds. Whereas demand for

high oleic sunflower oil is generally increasing in Europe, supplies

remain tight, which points toward an interesting opportunity for

exporters.

Product definition

The sunflower plant (Helianthus annuus) is native the North-American continent.

The seeds from the sun-shaped flower were originally taken to Europe duringthe Spanish colonisation of North-America. The crop can be cultivated at cooler

temperatures and has spread out through Europe and the Black Sea region.

Sunflower seeds are used for direct edible consumption as well as the crushing

of the seeds to extract oil. Sunflower oil is used as food ingredient for frying,

cooking, in salad dressings and as an ingredient in products such as margarines,due to its light colour and mild flavour.

HS code Description

1512 11 91 Sunflower seed oil

Product specification

Quality

General

Crude sunflower oil is obtained through crushing of the thin andsmaller black grade sunflower seeds (crushing grade). The black

sunflower seeds have a relatively high oil content (between 39-

49%).

Sunflower oil can be processed by three different methods. 1)

cold-pressing: (crude) light yellow oil, 2) hot-pressing: (crude)

brown-coloured oil, 3) refined sunflower oil: colourless liquid. Sunflower oil should have a maximum acid value of 0.9- 1.1%.

Excessive acid values can cause a sour taste and decolourisation

of the oil. Sunflower oil containing a high level of oleic acid is preferred in

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CBI Product Factsheet: Sunflower oil in the EU and EFTA


Source: Elburg Global

Source: Farinex

the food industry; the oil with a higher linoleic acid content is preferred bypaint or fuel industry. High-oleic sunflower oil is naturally stable and does

not need to be hydrogenated. The main quality problems associated with sunflower oil are contamination

and oxidation (rancidity). Sunflower oil has a relatively high oxidative

stability (i.e. long shelf life), but this stability is dependent on the extraction

method and seed pre-treatment. This makes it crucial that special care istaken in all steps of the production process, from harvesting to distribution.

High-oleic sunflower oil has a higher stability and resistance to rancidity due

to the high content of natural Tocopherol and the low level of

polyunsaturated fatty acids. Make sure that the raw material (i.e. sunflower seeds) is fresh and that

there are no long delays between harvesting and extraction. Sunflower

seeds should also be free from sand, stalk, plant debris and other foreign

materials.

Some of the most important quality factors concerning sunflower seeds are:

odour and flavour, oil content, and damaged/mouldy seeds. Sunflower seeds

should also be free from mycotoxins and harmful microbiological activity;

this will avoid contamination of the oil. Aflatoxin B1 and ochratoxin

contamination are known to be a problem for many producers, and buyersclosely monitor these aspects.

Prevent contamination by keeping facilities and equipment clean.

Ensure proper storage and transportation (see ‘Packaging’).

Organic (if relevant) Comply with organic standards for the production of sunflower seeds and

sunflower oil extraction. Refer to the section on ‘Niche requirements’ for

further details on organic production and labelling.

Labelling

Ensure traceability of individual batches.

Use English for labelling purposes, unless your buyer has

indicated otherwise. Labels must include the following:

o Product name

o Manufacturer’s lot or batch code

o Whether or not the product is destined for use in food

products

o Name and address of exporter

o Product’s country of origin

o Shelf life: Best-before date / use-by date

o Net weight / volume in metric unitso Recommended storage conditions

Packaging

Sunflower oil is commonly transported in liquid bulk (intank containers and flexi tanks) or in intermediate bulk

containers (IBC). Ensure preservation of quality by:

o Thoroughly cleaning the barrels or tanks beforeloading the oil.

o Filling up the tanks as much as possible to prevent

rancidity due to oxygen exposure. Take the possible

cubic expansion into consideration (indicated range:80-95%).

o Filtering out crystallizing substances out of untreated

sunflower oil; crystallization in cold conditions can greatly affect quality.

o

Ensuring the right temperature range (5-26°C) during transport; this isneeded to prevent solidification.

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o

Protecting the cargo from moisture and humidity to avoid rancidity.Prevent ventilation, rust particles, spoilage, seawater contamination

and self-heating due to contact with sawdust.

Requirements you must meet

Maximum level for erucic acid in oils and fats: EU legislation fixes a

maximum level of erucic acid in oils and fats intended for human consumption.

CFA1: Check out the maximum levels for erucic acid on EU legislation:Maximum level for erucic acid in oils and fats.

Extraction solvents for food: There are EU rules for the marketing and

application of extraction solvents used in the production of foodstuffs and food

ingredients.

CFA: Find out which Extraction solvents for food you can use and the conditions

for use.

Contaminants in food: The EU has laid down maximum levels of contaminants

in food, including ingredients such as vegetable oils.

CFA: For more information, read the CBI study on EU legislation: Contaminantsin food.

Maximum Residue Levels (MRLs) of pesticides in food: EU legislation hasbeen laid down to regulate the presence of pesticide residues (MRLs) in foodproducts.

CFA: If the agricultural raw material (sunflower seeds) for your oil has been

treated with pesticides, verify that residues remain within limits. For more

information, consult the specific EU legislation: CBI has a report on

Maximum

Residue Levels (MRLs) of pesticides in food.

Additives, enzymes and flavourings in food: The EU has set a list of

permitted flavourings and requirements for their use in foodstuffs intended for

human consumption, which includes vegetable oils. This is particularly relevantto food manufacturers. However, insight into this legislation can help you to

understand their requirements.

CFA: Familiarize yourself with the concerns of the end-users of your products by

checking EU legislation on Additives, enzymes and flavourings in food.

Hygiene of foodstuffs: Food business operators shall put in place, implement

and maintain a permanent procedure, or procedures, based on the HACCP

(Hazard Analysis and Critical Control Points) principles. This also applies to the

import of food to the EU and export from the EU.

CFA: Ensure compliance with EU legislation on Hygiene of foodstuffs (HACCP).

Labelling: In case you are supplying consumer labelled products (in for

example bottles and containers) you will have to take into account labelling

requirements laid down in EU Regulation 1169/2011.

CFA: Read more about food labelling in the EU Export Helpdesk.

1 Consideration for action

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Common requirements

Food safety management: Buyers commonly require their suppliers that they

have a quality/food safety management system in place. These systems require

companies to demonstrate their ability to control food safety hazards in order to

ensure that food is safe at the time of human consumption.

CFA: Suppliers can apply a basic HACCP system. However, if they aim to supply

food manufacturers more directly, it is necessary to have a certified food safety

management system recognised by the Global Food Safety Initiative, such as

ISO 22000, BRC or IFS. Visit the website of the Global Food Safety Initiative formore information.

Niche requirements

Regulation (EC) 834/2007 on organic agriculture: The EU has establishedrequirements on the production and labelling requirements with which an

organic product of agricultural origin must comply in order to be marketed in

the EU as “organic”.

CFA: In general, organic sunflower oil caters to a niche segment. However, it isa market which is growing alongside the overall organic food market in Europe.

If you do choose to obtain a certificate for organic production, find out more

about Organic production and labelling.

CFA: Make sure that your organic certification is harmonised with the EU/EFTA

legislation.

Trade statistics

Imports

Figure 1: Total imports of sunflower oil to the EU and EFTA, in 1,000

tonnes.

Source: Eurostat (2014)

Total imports of sunflower oil in the EU and EFTA reached 2.8 thousand

tonnes (€ 2.8 billion) in 2013. Since 2009, the total amount of imports

increased at an annual average rate of 3.3% in volume and 11% in value.

In the period 2009-2013, the Netherlands has become the largest importer

of sunflower oil in Europe (20% share in volume), recording an average

annual growth of 17% in volume and 26% in value. In 2013, Dutch imports

amounted to 550 thousand tonnes (€ 517 million). The port of Rotterdam is

an important trade hub for vegetable oils, re-exporting significant volumes

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Imports to EU and EFTAfrom DCs

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Since 2009, Ukraine recorded an average annual decline of 2.3% and agrowth of 7.8% in value. This annual volume decline significantly contributes

to the decrease in total share of imports from DC suppliers. In contrast, forinstance, Argentina (one of the world’s largest producers of sunflower oil)

recorded a rapid average annual decline of 22% in European import volume

and 16% in value in the period 2009-2013.

In 2008, the detection of mineral paraffin contamination in Ukrainiansunflower oil resulted in severe European import restrictions. The installed

requirements and random testing of Ukrainian sunflower oil has become less

strict over time, but the restrictions have only been lifted recently.

In addition, the EU approved a proposal (April 2014) to remove Ukrainianimport tariffs of certain agricultural commodities, among which crude and

refined sunflower oil, in the framework of the free trade agreement between

EU and Ukraine,. The new 0% tariff is expected to improve the position of

Ukraine as a supplier to the European Union, which represents a threat to

other possible DC suppliers. The production of high oleic sunflower oil in Ukraine, Russia and Argentina

remain largely linoleic, due to the costly supply chain segregation from

traditional crops. France has made headway in growing high-oleic hybrid

sunflower crops and is transitioning into a large acreage destined for thisniche segment.

CFA: The FAOSTAT is an interesting source to keep up-to-date on the statistics

of sunflower seed and sunflower oil-producing countries. Identify your potential

competitors and learn from them in terms of: Marketing: website, social media, trade fair participation, etc.

Product characteristics: origin, quality, taste, etc.

Value addition: certifications, processing techniques

Exports

Figure 3: Exports of sunflower oil from the EU and EFTA market; largestcountries exporting sunflower oil to the EU and EFTA (in termsof 2013 volume), 2009-2013 in 1,000 tonnes.

Source: Eurostat (2014)

In 2013, total European exports of sunflower oil reached 2.3 million tonnes

(€ 2.3 billion). Since 2009, the recorded average annual growth was 12% in

volume and 18% in value.

Hungary and the Netherlands are the largest exporters of sunflower oil in the

EU and EFTA. In the period 2009-2013, Hungary has seen a staggering

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annual increase in average volume of 123% and 140% in value, making itthe largest exporter in the EU and EFTA, with a respective share of 22% in

volume. The Netherlands recorded a slight average annual increase of 3.3%

in volume and a significant growth of 10% in value in the same period.

Other important exporters of sunflower oil in the EU and EFTA are France

(12% share in volume), Romania (8.3%) and Bulgaria (7.3%)

The largest destinations for European export are the Netherlands and

Belgium, marking 16% and 13% shares in volume. Other destinations for

sunflower oil exports are Germany (13%), the UK (7.9%) and Spain (5.7%).

Consumption

Figure 4: Consumption of sunflower oil in the EU, in 1,000 tonnes*

Source: FEDIOL (2014)

* Figures cover EU-27, excluding Luxembourg, Cyprus and Malta

Total consumption of sunflower oil in the EU amounted to almost 3.5 million

tonnes in 2012. In the period 2008-2012, consumption of sunflower oil

increased with an average rate of 2.6% annually.

In European countries, sunflower oil is used extensively as a cooking oil. In

many of the producing countries such as France, sunflower oil has become

the most commonly used oil in recent years. In addition, sunflower oil is

increasingly replacing palm oil in specific industrial applications (refer to the

‘Market Trends’ section).

The largest consumption market in Europe by far is Spain, reaching 660

thousand tonnes. Since 2012, Spanish sunflower oil consumption grew by an

average rate of 5.1% annually. Use of both sunflower and olive oil is high in

Spanish and other Mediterranean dishes.

In 2012, both Italy and France consumed the respectable amounts of 387

and 341 thousand tonnes of sunflower oil. Other large consumption markets

are UK (309 thousand tonnes) and the Netherlands (230 thousand tonnes).

Consumer preferences can vary between countries. In France, consumers

prefer a strong yellow colour with a medium to high sunflower-like taste,

where Italians and Germans favour a nutty and grain-like flavour to

accompany the taste. In comparison, Dutch consumers prefer their

sunflower oil with a neutral taste and odour.

CFA: Study your target market(s) in order to make an educated decision when

exporting sunflower oil. It is important to understand factors such as product

application, taste preferences, competing suppliers and potential buyers in thespecific destination countries. A general sources for learning more about specific

countries in Europe include CIA ‘s World Factbook.

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Production

Figure 5: Production of sunflower oil in the EU, in 1,000 tonnes*

Source: FEDIOL (2014)

* Figures cover EU-27, excluding Luxembourg, Cyprus and Malta

Total production of sunflower oil in the EU amounted to 2.7 million tonnes in

2012. In the period 2008-2010, production of sunflower oil increased at an

annual average rate of 7.6%, but experienced an annual average decline of

6.8% between 2010 and 2012.

The largest producer of sunflower oil in the EU is France, accounting for 20%

(550 tonnes) of total production. Spain, accounting for an 18% share (482

tonnes) of total production, is also a large producer of sunflower oil in the

EU. Other large sunflower oil producers in the EU are Hungary (14% share,at 390 tonnes) and Romania (12% share, at 339 tonnes).

CFA: Find out more about production of sunflower in Europe through thestatistics provided by FAOSTAT and Fediol (Federation of the European

Vegetable Oil and Protein Meal Industry).

Market trends

Healthy diets

The overall demand in EU for healthy ingredients in food processing is growingrapidly. According to the European Food Safety Authority (EFSA), the high

content of linoleic acid, essential fatty acids and vitamin E in sunflower oil

provides, have positively-assessed health claims that contribute to healthyblood cholesterol concentrations, children’s growth (omega 3 and 6), and other

protective qualities (FEDIOL). With the end-consumer becoming aware of these

characteristics, European food processors are increasingly opting for the use of

sunflower oil for frying and cooking purposes.

High oleic sunflower oil (HOSO)

The traditional sunflower oil seed has a 65% linoleic acid and 20% oleic acid

content, and can therefore be categorised with oilseeds such as soybean,

cottonseed corn and peanuts, containing 18-carbon fatty acids.

In the last 20 years, breeders have made progress in making hybrid sunflowers

that produce high-oleic seeds ranging from 60% to 90% in oleic acids,

increasing the oil’s oxidation stability. This has opened applications for high oleic

sunflower oil as a ‘stabilising’ food ingredient, increasing the shelf -life asingredient and spray oil. The lower concentration of saturated fats in high-oleic

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The importance of food safety

The database of EU’s Rapid Alert System for Food and Feed (RASSF) indicatesthat import of sunflower oil can be alerted and/or rejected for numerous reasons.

For example, because of improper health certificates, benzopyrene

contamination or the presence of mineral oil. Although a relatively limited

amount of notifications has been identified in the last years, food safety alertscan have severe consequences.

In 2008, French authorities discovered high mineral contaminated sunflower oil

in originating from Ukraine. The oil had been re-exported to different Europeanexport countries. In reaction, the EU blocked all imports from Ukraine until extra

sampling procedures had been installed.

CFA: On the website of the Rapid Alert System for Food and Feed (RASFF), you

can browse through various border rejections and alerts for ‘sunflower oil´

under category ‘fats and oils’. In this manner, you can learn about common

problems faced by suppliers during border controls and adopt appropriate

measures to avoid them.

Market channels and segments

Market channels

Figure 6: Trade channels for sunflower oil in the EU and EFTA

The trade channels for sunflower oil do not deviate from the general structure

for vegetable oils as described in CBI Market Channels and Segments for

Vegetable Oils.

In general, the following margins can be expected:

Brokers: ranging from approximately 0.5 to 2%, or fixed price per

tonne

Importers: will depend on whether the oil is simply being forwarded (5-10%), or whether the importer has to re-sell specific quantities (10-

20%).

Refiners charge a fixed amount per tonne of oil refined, approx. € 200 -

300/tonne. The margins charged by other industry players such as food

manufacturers, bottlers and retailers will highly depend on the nature

Producer/exporter of

vegetable oils

Refining

industry

Re-exports

Traders

Importers

Brokers

Retailers

Cateringindustry

Producer/

exporter of

oilseeds

Crushingindustry in

EU/EFTA(crude oil)

Food industry

Bottling

Food processing

Chemical industry

Developing country EU/EFTA market EU/EFTA market segments

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of the final product. Figure 7 provides an overview of the mainsegments for sunflower oil.

CFA: If you are able to supply directly to food processors or crushers in termsof volume, as well as consistent delivery and quality, make sure you have

adequate quality control systems. The different systems available are described

under ‘Common requirements’. Make sure to consult your (potential) buyer on

the certifications which are required by them.

CFA: If you are dealing with smaller volumes or specialised sunflower oil (e.g.

high-oleic, organic), importers are quite certainly the most suitable entry point.

CFA: If you are a starting exporter, brokers can be your entry point into Europe

as they are trusted by the European edible oil sector, which can make up the

lack of reputation of a starting DC exporter.

CFA: Comply with sustainability standards required by your specific segment

and stay up-to-date on developments in this respect. For information on thevarious sustainability standards visit the ITC website on the voluntary standardsthat are available for exporters.

Market segments

Sunflower oil is mostly used in the food industry, where it can be segmented

into:

Food processing industry: ingredient to manufacture semi-finished or

final food products Bottling industry: bottled as a final product

Figure 7 describes the main uses of sunflower oil in Europe within these two

segments.

Sunflower oil can be further segmented into commodity and speciality oil. The

main differences between commodity and speciality sunflower oil are described

in Figure 7, and further elaborated (at a more general level for vegetable oils) in

CBI Market Channels and Segments for Vegetable Oils.

Figure 7: Segmentation of sunflower oil in the EU and EFTA

Food industry segmentation

Bottling industry:

Multi-purpose cooking oil: frying, roasting, salad dressings, etc.

Food processing industry:

Margarine, sauces, mayonnaise, frying, spray oil on cereals and

biscuits, etc.

Conventional sunflower oil:

Futures market/international

prices

Standard quality: refined, heat

extracted

Commodity Speciality

Specialty sunflowert oil:

Premium quality: virgin, cold

pressed, high-oleic

Organic certification

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Price

Figure 8 shows export prices for sunflower oil sourced in the USA. Sunflower oil

prices from other origins are either incomplete or non-existent in the sources

consulted. For this reason, the prices presented below are discussed as

reference prices for exporters from other origins. Other supply-demanddynamics for sunflower oil, and their influences on prices, are presented in

textual form.

Figure 8: Sunflower Oil, US export price from Gulf of Mexico, 2009-2013,

annual averages in USD per tonne

Source: Index Mundi, 2014

Export prices of sunflower oil from the Ukraine, the largest supplier to the EU

and EFTA, have followed an upward trend in the last months. The prevailing

military crisis in Ukraine has escalated the prices of crude sunflower oil. Whilethe Russian troops have started tightening their grip over Ukraine, the import

shipments from the latter are getting delayed. In March 2014, prices of the

vegetable oil were pushed up by about 10-12 per cent in less than a month

(Hindu Business Line, 2014).

CFA: More information on developments in other supplying countries and their

effect on global prices, can be found on websites such as Index Mundi and

Public Ledger.

CFA: Develop sustainable, trust-based, relationships with new buyers in order

to profit from the current international scenario for groundnuts in the long run.

CFA: Develop good market information systems so as to be aware of market

movements in groundnuts worldwide.

Interesting Sources

The EU Vegetable Oil and Protein meal Industry - www.fediol.eu

The Food and Agriculture Organisation of the United Nations has a variety of

agricultural databases - faostat3.fao.org

For information on the latest market developments in the Oils and seeds

sector, visit The Public Ledger - publicledger.agra-net.com/oils

National Sunflower Association – Market News -

www.sunflowernsa.com/growers/marketing/daily-market-news

This survey was compiled for CBI by ProFound – Advisers In Development

in collaboration with CBI expert Joost Pierrot

Disclaimer CBI market information tools: http://www.cbi.eu/disclaimer

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