Activation of the sunseed market is accompanied by risks of falling prices

After the winter break, the Ukrainian sunseed market is experiencing a new stage – a sharp increase in supply and the restart of processing plants are bringing export figures to a record level, but this may result in a further decline in prices. This was reported by the analytical department of the agricultural cooperative PUSK, created within the VAR.

“As of April 14, 234 thousand tons of oil have already been shipped, about 480 thousand tons have been contracted for the month. That is, we are moving very quickly, and by the end of April we can reach record volumes,” analysts note.

The launch of new processing facilities and greater availability of raw materials have led to an increase in sunflower seed processing. After several months of decline, the figures have returned to last year’s levels: in December-February, 800-900 thousand tons were processed, in March – over 1 million tons, and in April 1.2-1.3 million tons are expected.

“We have significantly decreased in the last few months: processing has been within 900 thousand – a million tons. But now we see a recovery: the supply of sunseed has gone up, and processing has come to life. This allows Ukraine to increase oil exports to the world market,” the PUSK comments.

However, the positive dynamics of export volumes is restrained by the volatility of the world market, in particular the situation with American tariffs. Donald Trump’s recent statements about the possibility of introducing restrictions have forced the EU to prepare for mirror steps – in particular regarding soybean oil, which is a competitor to sunflower. This news caused short-term fluctuations: soybean oil became cheaper, and then sunflower oil.

“As soon as the postponement of tariffs for 90 days was announced, the European oil market instantly reacted – prices dropped by $20-30. The decrease affected both FOB and CPT markets. That is, the pressure is tangible, and it is transmitted to the domestic market,” analysts explain.

An additional factor of pressure is the accumulated stocks of seeds. Due to the decrease in the pace of processing in the winter, Ukrainian farmers have saved significant volumes of sunseed. Now they are gradually entering the market, creating an excess supply.

Analysts believe that the main trend in the coming weeks is a decrease in prices, and by the end of May the cost of sunseed will probably drop to 24–25 thousand UAH/t.

“If someone still has sunseed, we need to look at the second half of April. Perhaps we will see a temporary small increase — by 200–400 UAH/t — and this will be the moment to record a profit. Because prices will most likely decrease further,” experts believe.

Tags: Ukraine, sunflower oil, prices, sunseed