Processors are trying to reduce sunseed prices, but this is hampered by the rise in sunflower oil prices
Last week, sunseed prices in Ukraine rose to 25500-26200 UAH/t with delivery to the plant amid limited supply and the need for plants to fulfill contracts for the supply of oil.
On Monday, the processors tried to lower prices to 24500-25000 UAH/t following the decline in vegetable oil prices caused by the fall in oil prices by 8% over the week. But the lower-than-expected harvest is forcing processors to keep prices high, especially when buying large quantities.
As of October 18, Ukraine harvested 9.3 mln tons of sunseed from 4.5 mln hectares or 91% of the area, yielding 2.07 t/ha, so the harvest forecasts were reduced to 10-10.5 mln tons, although USDA estimates it at 12.5 mln tons.
Growth of prices for sunflower oil supports the price of sunseed at a high level and helps to increase the processing margin.
During the week, the price of sunflower oil rose by another 20-30 $/t to 1050-1060 $/t, and for meal – by 5 $/t to 220-225 $/t with delivery to the ports of the black sea.
Sunflower oil has risen sharply after the tender in Egypt, where the purchase price reached 1185 $/t C&F amid high prices for palm oil in Malaysia.
December futures for palm oil on the stock exchange in Malaysia for two weeks traded at a high level of 4300 ringgit/t or 1000 $/t amid strong demand.
December futures for soybean oil on the Chicago stock exchange yesterday rose 1.4% to 934 $/t (+1.1% for the week, +1.4% for the month), but remain quite cheap compared to other vegetable oils, because they are under pressure from increased supply of soybeans in the United States and improved conditions for sowing in Brazil.
December futures for Brent crude oil for the week lost speculative growth caused by the conflict between Israel and Iran, and fell by 4.4% to 74.2 $/barrel, which is only 1.3% higher than last month.
After the decline in demand from China, India remained the main market that can support oil prices. Therefore, if it continues to reduce imports in October, oil prices will turn down.
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