European sunflower oil prices rise by $60–65/ton after Ukrainian plants halt operations

Sunflower oil prices for December–March delivery across the six European ports market rose by $60–65/ton on Friday. This market showed the strongest reaction to reports that Ukrainian oilseed processing plants had halted operations.

Serhii Repetskyi, partner at Sunstone Brokers, told Latifundist.com.

According to him, traders showed active demand. He attributed this reaction to the shutdown of around 50% of Ukraine’s sunflower processing capacity, by his estimate. However, the duration of the downtime remains unknown.

“This has not yet reached consumers on the physical market. Most likely, we will see a reaction on Monday–Tuesday and demand from the Italian and Spanish markets,” Repetskyi said.

Turkey did not respond with higher demand or sunflower oil prices. According to the broker, local market participants are counting on increased supplies of Ukrainian sunflower seeds for domestic processing. In particular, an offer of 40 thsd tons appeared on the market on Friday, of which 21 thsd tons were traded to Turkey at $630–640/ton CIF, depending on the port.

Against the backdrop of weaker demand for Turkish refined oil, the broker expects Turkey to import only 20–25 thsd tons of crude sunflower oil per month in the near term. Local processing of imported sunflower seeds is expected to cover the remaining needs through February.

In India, trading activity picked up after Diwali, one of the major Hindu festivals, but there was no panic over the shutdown of Ukrainian plants. According to Repetskyi, Ukraine’s share of India’s sunflower oil supplies currently does not exceed 15%, and Russian producers could replace this volume.

Russian sellers offered sunflower oil at $1,460/ton for December delivery and $1,440/ton for January. Buyers quoted $1,420–1,425/ton, but no deals were reported, according to the broker. Middle Eastern markets also showed little activity.

Repetskyi concluded that the shutdowns have so far mainly affected prices on Ukraine’s domestic market and across the six European ports market.

“We have not seen any offers of Ukrainian oil — sellers are waiting for prices to rise. I think we will see offers from Ukraine when prices in European markets move higher next week,” he said.

Tags: Ukraine, sunflower oil, EU, prices, war