Ukraine : Sunflower oil prices continue to rise speculatively
Sunflower prices in Ukraine continue to rise as lower harvest forecasts and limited farmer selling tighten supply. Processors benefit from strong demand for sunflower oil, with export prices increasing. However, global markets are becoming oversupplied, and falling palm oil prices may soon reduce speculative interest, potentially pressuring sunflower oil prices in the coming weeks.
Lower sunflower harvest forecasts in Ukraine and farmers holding back sales are leading to further increases in sunflower prices. Meanwhile, processors are taking advantage of the opportunity to sell sunflower oil at high prices amid surging demand. However, it’s important to note that global markets are beginning to become oversupplied, and palm oil prices are falling sharply due to declining demand, which will soon reduce speculative demand for expensive sunflower oil.
Over the past week, demand prices for sunflower oil in Ukraine have increased by another $20-30/t to $1,250-1,265/t for delivery to ports in November, but plant offer prices are around $1,250/t per FCA plant.
Bid prices for Ukrainian sunflower oil with delivery to the EU rose to $1,340-1,360/t DAP Italy, Greece, although bid prices for Ukrainian rapeseed and soybean oil remain at $1,220-1,260/t DAP Poland, Germany.
Bid prices for Russian sunflower oil rose by $10-20/t over the week to $1220-1230/t FOB, supported by a smaller-than-forecast sunflower harvest, especially in the south of Russia.
Prices for sunflower oil with delivery to India also rose by $20-30/t to $1,340-1,350/t CIF Mumbai during the week.
November palm oil prices fell 4.4% over the past seven days to 4,317 ringgit/tonne or $1,022/tonne, reflecting rising production in Malaysia and a slowdown in exports. The country’s palm oil exports for the first 25 days of October decreased by 0.5-1% compared to the same period in September, although exports for the first 10 days of October were 15-17% higher than in September, indicating a decline in demand.
December soybean oil futures on the Chicago Board of Trade fell 1% yesterday to $1,107/t (-0.7% over the week), despite a sharp speculative rise in soybean prices by 4.7% over the week in anticipation of an agreement with China.
Indonesia’s palm oil industry association, GAPKI, announced on Tuesday that the country’s palm oil production could rise to 56 million tonnes, exceeding previous forecasts and the USDA’s 47.5 million tonne forecast. This increase will be driven by good weather and high oil prices.
Brent crude oil prices fell 1.5% yesterday to $64.5 per barrel amid profit-taking after a sharp speculative rise of 7.6% over the week and expectations of talks between Trump and Xi.
This week, markets will remain anticipating the outcome of US-China negotiations and the possible signing of a trade agreement, which will drive prices higher. However, if no deal is reached, the speculative price rise will cease.
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Source : Ukr Agro Consult
