Sunseed in Ukraine continues to rise in price amid rising oil and vegetable oil prices

Prices of sunseed in Ukraine last week resumed growth amid the devaluation of the hryvnia and a significant rise in price of soybean oil due to lower production forecasts in the United States, which supported the quotes of sunflower oil on the world market.

During the week, the processors raised prices for sunseed with an oil content of 50% by 300-500 UAH/t to 24500-25200 UAH/t with delivery to the plant, but farmers continue to hold back sales.

After an unexpected decline in the January USDA report forecast soybean production in the United States by 2.58 million tons of March futures for soybeans on the Chicago stock exchange for two sessions rose 5% to 385,8 $/t, and soybean oil – by 7.5% to 1012 $/t (+9.5% for the month).

According to Trading Economics, the average price of sunflower oil for delivery to buyers after the release of the USDA report increased by 4% to 1305 $/t (+1.8% for the month).

On the Bursa exchange in Malaysia, the March futures for palm oil for two sessions increased by 4.8% to 4504 ringgit/t or 999 $/t, although analysts expected a greater increase amid a significant reduction in production and stocks in December, especially given the rise in price of oil and soybean oil.

March futures for Brent crude oil for two sessions rose by 5.2% to a 4-month high of 81 $/barrel (+10% for the month) after the tightening of US sanctions on oil and the shadow fleet of the Russian Federation.

Rise in prices for the cheapest soybean oil on the world market and the rise in price of palm oil will contribute to the increase in the premium for sunflower oil. Therefore, in the near future, the prices for Ukrainian sunflower oil with delivery to the Black Sea ports may return to the December level of $1100/t. However, they remain under pressure from the forecasts of increased sunflower production in Russia.

In the January report, the USDA experts raised the forecast of world sunflower production in MY 2024/25 by 0.18 to 50.69 (56.03) million tons, in particular for Russia – by 0.25 to 16.55 (17.1) million tons. The forecast of world sunflower oil production was increased by 0.09 to 20.05 (22.14) million tons, in particular for Russia – by 0.1 to 6.71 (6.82) million tons, and the export forecast – by 0.13 to 12.43 (15.04) million tons, in particular for Russia – by 0.1 to 4.17 (4.4) million tons. At the same time, the estimate of ending stocks was left at 2.25 (2.95) million tons.

Tags: Ukraine, prices, sunseed