Sunseed prices in Ukraine hit new highs amid rising oil prices and a strengthening dollar

The war with Iran has led to a sharp increase in oil prices by 36% in 2 weeks, which should have contributed to a similar increase in vegetable oil prices, but biofuel producers are not in a hurry to raise prices yet, expecting that oil will soon become cheaper. Therefore, palm oil quotes, which are most correlated with oil prices, have increased by only 12% since the start of the war.

May soybean oil futures on the Chicago have risen by 8.7% since the start of the war with Iran, but prices for sunflower oil for delivery to India have risen by only $10/t to $1,420-1,425/t CIF Mumbai in a week , as importers are actively buying cheap palm oil, which is now worth about $1,200/t CIF Mumbai.

Demand prices for Ukrainian sunflower oil increased by $10-15/t to $1,280-1,290/t for delivery to Black Sea ports during the week, which led to a further increase in sunseed prices in Ukraine.

As a result of Hungary and Slovakia blocking the allocation of 90 billion euros in aid to Ukraine from the EU, the dollar exchange rate on the interbank market in Ukraine increased by 1.4% to 44.3 UAH/$ (+2.8% per month), which significantly supported purchase prices tied to export contracts.

During the week, purchase prices for sunflower seeds in Ukraine increased by 500-900 UAH/t to 29,800-31,200 UAH/t (for 50% oil content) with delivery to the factory, but dollar prices remained unchanged or decreased to the level of 590-620 $/t excluding VAT.

Therefore, processors received an additional 300-400 UAH/t from the increase in the dollar exchange rate, which they can pay extra for larger batches of sunseed. Farmers continue to sell sunseed in small batches in anticipation of further price increases, but they should take into account that oil prices may fall at any time, which will lead to a corresponding decrease in prices for the oilseed.

In the March report, USDA FAS experts unexpectedly sharply increased the forecast for world sunseed production in MY 2025/26 by 2 million tons to 54.12 (52.8 in MY 2024/25) million tons, in particular for Argentina – by 1.5 million tons to 7 (5.1) million tons and Ukraine – by 0.5 million tons to 11 (13) million tons, which slightly restrains the growth of world prices for sunflower oil.

Argentina will intensify sunflower harvesting in the central regions in March, where the main areas of crops are located, so the supply of sunflower oil will increase, especially against the backdrop of rising world prices.

Tags: prices, sunseed