by PressWhat global factors influence the oilseeds market
Oilseeds market after 2020: trends
Last year, the market of oilseeds presented a lot of surprises to its participants. The processes here developed so unexpectedly that traditional trading approaches were no longer effective. Just in 4 months the price of sunflower oil has grown by one thousand dollars, other products have also demonstrated a record rise in price. In this regard, experts have given their forecast for the Ukrainian market, which takes into account various factors that can change the segment.
It is impossible to analyze the industry without reviewing macroeconomic trends, primarily issues of food security. The latter depends on climatic factors, political processes and inflation. The influence of weather conditions is extremely important, which can be seen in the dynamics of the Ukrainian market. 2019 was a successful year for local farmers, but in 2020 they were faced with drought and declining yields. 2021 brought high rates of both grains and oilseeds. In this case, Brazil expected the volume of grain in the range of 108 million tons, but because of adverse weather harvested only 85 million tons.
As for political processes, they can be seen in the example of the European Union. In 2023 new rules will come into effect, which exclude the use of market interventions. And the latter have been a key tool of the European market for about 60 years. In addition, in the EU, in order to get help from the government, agricultural enterprises must implement green technologies. These factors significantly affect the development of the market and its participants. 
When analyzing the situation with oilseeds and grains, we should also consider the impact of food inflation. The pandemic has created pent-up demand from consumers, which is estimated at $4 trillion. The threat in this case is the risk that if the global economy continues to recover, this money could be diverted to the market. In this case the imbalance between supply and demand is likely to have an impact on the further growth of inflation. In its turn, an increase in demand should stimulate the inflow of investments into the segment, however for the last 10-12 years a great deal of investments have been channeled into the stock market rather than the real economy. Thus, capital is growing on the stock exchanges, while production is suffering, and such tendencies are observed all over the world, and Ukraine is not an exception. The local market needs investments, which allows the agrarian sector to actively develop and resist the difficulties. So far, funds in the sector are coming from the participants themselves rather than outside investors.
A positive shift for farmers has been the rise in oilseed prices, which has increased the profitability of production. It had a particularly positive impact on soybeans and wheat, which in 2020 and 2021 surpassed corn and sunflower in profitability.