Tender results in Turkey increase pressure on sunflower oil prices

On March 20, the Turkish Grain Agency (TMA) purchased the following batches of oil in an international tender for the purchase of 18,000 tons of unrefined sunflower oil with delivery on April 2-21 on a CFR basis:

• 6 thousand tons from Yayla with delivery to the port of Mersin/Iskenderun at a price of $1208.9/ton,
• 6 thousand tons from Aves with delivery to the port of Mersin/Iskenderun at a price of $1,209/ton,
• 6 thousand tons from Aves with delivery to the port of Tekirdag at a price of $1,195/ton.

Traders expected purchase prices to be higher, as in recent weeks, sunflower oil offer prices from Ukraine and the Russian Federation have increased by $20-30/t to $1,140-1,160/t FOB, although further growth was limited by a sharp drop in soybean and palm oil quotes.

According to Trading Economics, the average price of sunflower oil delivered to customers fell by 1% to $1,333/tonne in a week, losing 3.5% since the beginning of March amid a decrease in May soybean oil futures in Chicago by 3.2% to $938/tonne and palm oil from Malaysia by 2.2% to $998/tonne.

In the first six months of the MY 2024/25, Russia increased its exports of sunflower oil compared to the previous season by 9% to 2.51 million tons, of which India purchased 1.07 million tons, and Turkey – 511 thousand tons. According to forecasts, in the MY 2024/25, the Russian Federation will export 5.5 million tons of sunflower oil, so in the second half of the season, competition between Russian and Ukrainian oil sellers will intensify, especially in the main market – India.

In the MY 2024/2025 (as of March 1), Ukraine reduced its exports of sunflower oil compared to the same period of the previous season by 24% to 2.4 million tons, which was the lowest figure for this period since MY 2016/2017. The main buyers of Ukrainian oil remained the EU countries (54% of total exports). In addition, for the first time in the last three seasons, India became the leader among importers, purchasing 417 thousand tons of oil, which is five times higher than the previous season.

By the end of the season, Ukraine could still export about 2 million tons of sunflower oil, but farmers’ restraint in sunflower sales in anticipation of higher prices is limiting processing volumes. In March-April, soybean and soybean oil from Argentina will enter the markets, and a seasonal increase in palm oil production will begin in Malaysia and Indonesia.