Sunseed prices in Ukraine continue to rise despite increased supply on the market

Improved weather conditions in Ukraine allowed for an increase in sunflower seeds harvest rates last week, slightly alleviating concerns among processors about seed volumes and quality. At the same time, purchase prices remained high due to strong demand for sunflower oil.

As of October 16, 7.19 million tons of sunflower were harvested from 76% of the area (+10% per week) or 3.91 million hectares in Ukraine, with an average yield of 1.84 tons/hectare, while last year on this date, 9.3 million tons of sunflower were harvested from 91% of the area, with a yield of 2.07 tons/hectare.

Dry, albeit cool, weather this week will help complete the sunflower and soybean harvest, but producers are reporting lower yields. At the same time, sunflower quality in the west is better than previously expected.

The sunflower seeds harvest in Ukraine is forecast at 10-10.5 million tons compared to 11 million tons last season, so processors are actively buying up all the proposed volumes in order to load production for the maximum period.

Over the week, the demand prices for sunseed in Ukraine increased by another 300-500 UAH/t to 27,800-28,800 UAH/t or $590-610/t excluding VAT (for 50% oil content) with delivery to the factory, but at the same time, some processors lowered the price and stopped accepting due to the lack of free warehouses, while others continue to buy and raise prices.

Against the backdrop of delayed deliveries, spot demand prices for sunflower oil in Ukraine increased by another $20-30/t to $1,230-1,245/t with delivery to ports in October-November, as prices for Russian oil increased by $10-20/t to $1,200-1,210/t FOB per week.

It should be noted that the sunflower meal market is experiencing a price collapse caused by the increasing supply of rapeseed and soybean meal in the EU, which will put pressure on sunseed prices, even despite the increase in oil prices.

Demand prices for sunflower meal fell by $5/t to $205-210/t delivered to ports in a week, and demand from the EU is practically absent, as rapeseed meal prices in the EU fell to 185-200 €/t due to large supply and pressure from low prices for feed corn and wheat on the world market.

Kazakhstan and Russia are finishing their sunseed harvests, estimated at 2.5 and 17.5 million tons respectively, which will significantly exceed last year’s 1.8 and 16 million tons and will continue to increase the supply of sunflower oil from the new crop, especially in the markets of China and India. Therefore, Ukrainian exporters will focus mainly on the EU markets.

Tags: prices, sunseed, Ukraine