Sunflower prices in Ukraine are falling following the fall in world prices for vegetable oils

Sunflower harvesting in Ukraine has been completed, and processing plants should receive 16.5-17 million tons of seeds. But against the background of restraining sales by farmers, processors were forced to raise the purchase prices for sunflower to 21000-21500 UAH/ton (775-790 $/ton with VAT) for 50% oil content. At the same time, in some places processors worked with negative margins to load capacity.

However, the collapse in oil prices led to lower prices for palm and soybean oil, which negatively affected the prices of sunflower oil and seeds. During the week, prices for sunflower seeds delivered to the plant fell by 400-800 UAH/ton to 19300-20300 UAH/Ton ( 7 710-745/ton with VAT) for oil content of 48-50%. But if the dollar price during this period decreased by 10%, then the hryvnia price due to the strengthening of the dollar exchange rate – only by 3.4%.

In Ukraine, out of 6.476 million hectares or 99% of the area, 16.2 million tons of sunflower were threshed with a yield of 2.5 t/ha. According to the state statistics service, as of November 1, sunflower reserves in the country increased by 1.519 million tons to 8.761 million tons compared to last year, and soybeans – by 369.8 thousand tons to 1.76 million tons.

Supply prices of Ukrainian sunflower oil for delivery in December decreased to 1 1380-1410/ton FOB, but demand prices fell to 1 1350-1360/ton FOB, and continue to fall after soybean oil prices.

December soybean oil futures on the Chicago Stock Exchange for the week fell by 9.5% to the lowest level since mid – September - - 1,208/ton under pressure from the collapse in oil prices, and they were supported even by an increase in the volume of soybean processing in the United States in October to a record 5.36 million tons.

February palm oil futures on the Malaysian stock exchange fell 3.6% to 4,684 ringgit/ton or.1,111/ton over the week, losing 6.7% since mid-November, but they were slightly supported by an increase in export rates.

According to surveyor Societe Generale de Surveillance, Malaysia in November increased palm oil exports by 13.8% compared to October to 1.68 million tons.

However, it should be borne in mind that sales of soybean and sunflower oil will increase from January – February, which will increase pressure on prices against the background of increased palm oil production in Malaysia and Indonesia.

The Brazilian government decided to keep the mandatory share of biodiesel in motor fuel at 10% (B10) in 2022, although earlier it was planned to increase it to 13% from January, and to 14% from February. This will further increase the supply of soybean oil for food use.