Argentina completes harvesting a good sunflower crop, which increases pressure on prices in Ukraine

Sunseed purchase prices in Ukraine remain high amid a shortage of offers from farmers who expect further price increases, but the completion of a much larger sunflower harvest in Argentina and a seasonal increase in palm oil production are putting pressure on sunflower oil quotes.

In the MY 2024/25, Argentina increased the area sown with sunflower due to excessively dry weather during the soybean planting period, and subsequent rains allowed for a significantly better harvest than in the previous season.

As of April 5, sunflower has been harvested on 75.6% of the area, and at the end of the harvest, experts from the Buenos Aires Grain Exchange increased the harvest forecast by 5% to 4.5 million tons, which will exceed the previous season’s production by 16%. The average yield will be 2.38 tons/hectare, which will exceed the 5-year and 10-year averages.

Recall that in the April report, the USDA increased the forecast for sunseed production in Argentina in the MY 2024/25 by 5% to 4.2 million tons, which will exceed the harvest of the previous season by 8%, as the average yield will increase by 2% compared to last year to 2.15 t/ha, and the area to be harvested will increase by 6% to 1.95 million hectares.

In Ukraine, purchase prices for sunflower seeds with 50% oil content remain at the level of 26,000-26,600 UAH/t delivered to the plant, but more and more plants are shutting down due to a shortage of raw materials and low processing margins, as export demand prices for Ukrainian sunflower oil are $1,120-1,135/t delivered to Black Sea ports, and demand continues to decline.

Ukrainian sunflower oil exports during April 1-9 increased by 10% compared to the corresponding period in March to 151 thousand tons, and in total in the MY 2024/25 (as of April 1) amounted to almost 2.8 million tons, which is 24% lower than last year’s rates and is the lowest indicator for this time since 2016/17 MY.

Palm oil futures on the Bursa exchange in Malaysia have been falling for 6 consecutive sessions and fell another 5.6% in a week to 3,910 ringgit/t or $895/t amid falling oil prices and a seasonal increase in palm oil production.

The pace of palm oil exports from Malaysia slowed in April compared to the beginning of the month. According to surveyors, exports increased by 11.89-18.5% in the first 20 days of April compared to the same period in March, although the growth was 29-50% in the first 10 days of April. Even the fall in palm oil prices is not increasing demand from importers, who expect further declines in quotations.

June Brent crude futures fell 2.7% to $66.2/barrel on Monday (-8.9% for the month), adding pressure on the prices of palm oil and other oils used in biodiesel production.

Tags: sunseed, harvesting, Argentina