Demand for sunseed in Ukraine remains high, although more and more factories are stopping processing

In Ukraine, demand for sunseed remains quite high, which supports purchase prices, but the increase in raw material prices against the background of stable prices for sunflower oil reduces processing margins, so some plants are stopping work in anticipation of the rapeseed processing season.

During the past week, purchase prices for sunseed (with 50% oil content) in Ukraine remained at the level of 31,300-33,500 UAH/t or 630-660 $/t excluding VAT, however, a strange situation arose when processors who had not formed sunseed stocks continued to raise purchase prices, while others reduced prices, having sufficient stocks before the start of rapeseed processing. For large batches of sunseed, processors paid even 34,000 UAH/t with delivery to the plant, but noted that in order to form stocks for the new season, it is necessary to purchase a small amount of raw materials.

Last week, Russian sunflower oil prices fell by $10/t to $1,290/t FOB as Russian sellers try to compete with Argentine oil, which has risen by $10-20/t to $1,340-1,380/t FOB amid increasing demand.

Demand prices for sunflower oil in India remained at $1,400-1,410/t CIF Mumbai during the week, which, against the backdrop of declining prices for Russian oil, indicates a fairly significant supply on the world market and increased competition for buyers.

At the same time, demand prices for Ukrainian sunflower oil increased by $10/t to $1,325-1,330/t for delivery to Black Sea ports during the week, amid a reduction in supply, as more and more plants are shutting down due to a lack of raw materials and preparations for the rapeseed receiving season.

Active supplies of sunseed from Argentina to Bulgaria and Turkey have led to an increase in the supply of sunflower oil, making it increasingly difficult for Ukrainian exporters to sell expensive domestic oil, especially given the constant shelling of ports and the increasing risks of damage to factories and terminals.

As of May 25, 4.342 million hectares of sunseed have been sown in Ukraine, or 87% of the planned 5 million hectares. Cool weather with periodic rains is conducive to the development of crops, so farmers are quickly completing sowing and may even increase the area under sunseed against the backdrop of high prices.

Tags: Ukraine, prices, sunseed