Sunseed prices in Ukraine decline as crushing plants shut down following Russian attacks

Ukraine’s sunseed market is facing increasing pressure as massive Russian attacks on oilseed crushing facilities force production shutdowns and reduce demand for raw materials. Kernel, one of Ukraine’s largest sunflower oil producers, has announced the complete shutdown of all its crushing plants and suspended sunseed purchases. The decision followed Russian drone attacks that damaged production buildings, equipment and storage tanks. The company emphasized that the shutdown was necessary to protect employees and prevent large-scale fires.

Over the past week, oilseed crushing facilities in the Poltava, Vinnytsia, Chernihiv, Chernivtsi and Khmelnytskyi regions have also come under Russian attacks. Some plants have suspended operations to assess damage and determine when production can resume. The reduction in operating crushing capacity is weakening competition for raw materials and creating conditions for further declines in procurement prices. As of mid-November, sunseed with 48% oil content was priced at UAH 15,000–16,000/t including VAT, or $290–310/t excluding VAT, delivered to crushing plants. Meanwhile, as of November 10, Ukrainian farmers had harvested 10.711 mln tons of sunseed from 91.6% of the planned area, with an average yield of 2.23 t/ha.

Deteriorating conditions in the global edible oil market are adding further pressure on prices. Lower crude oil prices have contributed to a decline in palm oil prices, encouraging major importers, particularly India, to increase palm oil purchases. This is weakening demand for sunflower oil and limiting Ukrainian crushers’ ability to maintain previous sunseed procurement prices. At the same time, prolonged rainfall in October has left part of the sunflower crop unharvested, increasing the risks of crop losses and deterioration in seed quality.

Sunseed exports remain an alternative to domestic crushing, but opportunities are significantly constrained by high transportation costs. Bid prices for Ukrainian sunseed delivered to Turkey stand at $580–600/t, although the 50 thsd ton duty-free quota is likely already exhausted, meaning further shipments may be subject to a 10% export duty. Road transportation costs to Turkey have also increased to $160–180/t. On the Bulgarian market, bid prices remain at €480–485/t, equivalent to approximately $535–545/t, but logistics costs are also rising, while a shortage of trucks is limiting shipment growth.

Despite the complete shutdown of its crushing facilities, Kernel continues to ship existing stocks of finished products from warehouses and says it is fulfilling its commitments to farmers and partners. However, the suspension of purchases by one of Ukraine’s largest crushers, combined with shutdowns at other plants, could significantly weaken domestic sunseed demand. Without a rapid resumption of production and given limited export opportunities, Ukrainian farmers face the risk of further price declines and growing difficulties in marketing their harvest.

Tags: Ukraine, prices, sunseed