Sunflower prices in Ukraine are falling on forecasts of further declines in sunflower oil prices.
Sunflower prices in Ukraine have dropped sharply due to falling processor demand, rising Black Sea freight costs from attacks on civilian vessels, and declining global oil and feed grain prices. Sunflower oil prices fell to $1,220/t, with seed prices at UAH 28,000–28,600/t. Harvest delays and power outages further pressured the market.
Sunflower prices in Ukraine have fallen sharply as a result of reduced demand from processors, who anticipate a further decline in prices and demand for vegetable oils, given attacks on civilian vessels and tankers in the Black Sea, which have led to an increase in freight rates.
Demand prices for sunflower oil in Ukraine (with delivery to ports in December) fell by $10/t to $1,220/t over the course of the week amid rising supply and falling demand, as well as a fall in prices for Russian sunflower oil by $10-15/t to $1,190-1,195/t FOB (with delivery in December).
Drone attacks on civilian ships carrying sunflower oil from Russia and Ukraine shocked the market, as civilian vessels have rarely been targeted since the war began.
Sunflower purchase prices fell by UAH 500-1,000/t over the week to UAH 28,000-28,600/t or $580-593/t excluding VAT (for oilseeds 50%) with delivery to the plant, partly due to constant air raids and increased shelling in the Odessa region, which led to a three-day power outage.
Factories have largely stocked up sunflower seeds for two to three months of operation, but if sunflower oil prices continue to decline, processing margins will again become negative.
The weather in Ukraine in December prevented the sunflower harvest from being completed, resulting in losses. According to current data, 9.064 million tons of sunflower have been harvested from 93% of the area, with a yield of 1.88 tons per hectare.
Further pressure on sunflower prices will come from declining global prices for feed grains and meals. Sunflower meal bid prices in Ukraine remained unchanged over the week, at $210-215 per tonne, with port delivery.
Falling oil prices are increasing pressure on palm oil prices, which will reduce demand for sunflower oil from Ukraine and Russia, especially given the increased risks for vessels in the Black Sea.
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Source : Ukr Agro Consult
