Sunseed prices in Ukraine fall amid seasonal increase in supply

The seasonal increase in sunflower oil supplies from Argentina and Russia is putting pressure on the prices of Ukrainian sunflower oil, which has led to a decrease in purchase prices for sunseed.

Argentina harvested a record 4.7 million tons of sunseed this year, so Indian buyers have increased their imports of Argentine sunflower oil. At the same time, Russian oil has also started to fall in price amid a decrease in export duties and sunseed prices in Russia.

According to IKAR, from April 21 to May 11 in Russia, against the backdrop of a seasonal increase in offers from farmers and a strengthening of the ruble, prices for sunflower seeds fell by 1% to $400-420/t (excluding VAT), and for sunflower oil – by 0.5% to $910-940/t (excluding VAT), but the processing margin still remains negative.

The halving of the export duty on sunflower oil compared to March led to a drop in export demand prices for Russian sunflower oil for delivery in May to $1,075-1,100/t FOB.

In Ukraine, export prices for sunflower oil dropped to $1,110-1,115/t with delivery to Black Sea ports and to $1,150-1,170/t DAP Germany and Macedonia amid increased competition with Argentine and Russian oil in the Indian market and falling demand from European buyers due to lower prices for crude oil and rapeseed oil.

During the week, prices for sunseed with 50% oil content remained at the level of 26,000-26,700 UAH/t ($550-565/t excluding VAT) with delivery to the plant, but the number of offers from producers increased. The processing margin remains low or negative, so small processors continue to stand idle. In addition, the number of plants with a processing capacity of 20-150 tons/day put up for sale has increased.

Favorable precipitation in Eastern Europe, Ukraine and Russia is improving conditions for sowing and development of sunflower crops, which will allow for an increase in the area sown, reducing the area under soybeans, which was less profitable this season. This will also increase the pressure on prices of sunflower oil for the new crop.

A 7% increase in oil prices over the week has supported soybean oil prices, while palm oil prices remain under pressure from rising production and inventories. In the near future, importers will increase their purchases of cheap palm oil, which will limit the rise in sunflower oil prices.