Prices for Ukrainian sunflower are falling under the pressure of low demand for oil

Low demand for sunflower oil, as well as significant reserves of sunflower oil and sunflower on the eve of the new crop entering the markets, continue to lower purchase prices for sunflower in Ukraine. Egyptian GASC purchased 80 thousand tons of vegetable oils yesterday, but even the reduction in the price of sunflower oil to a level lower than that of soybeans did not increase the volume of purchases, which increased pressure on prices.

Supply prices of Ukrainian sunflower oil for delivery in Q3 and Q4 for the week decreased by another 2 200/ton to F 1100-1120/ton FOB, and demand prices – to.1050/ton FOB. Processors who cannot sell sunflower oil profitably are forced to lower the purchase prices for sunflower seeds to 14500-15500 UAH/ton with delivery to the plant.

According to the State Statistics Service, sunflower stocks in Ukraine as of June 1 decreased from 2.275 to 1.395 million tons compared to last year, in particular, agricultural enterprises – from 0.919 to 0.721 million tons, and storage and processing enterprises – from 1.356 to 0.673 million tons.

Traders expected that the Egyptian GASC against the background of lower prices for sunflower oil will increase the volume of its purchase at yesterday's tender. However, GASC purchased 70 thousand tons of soybean oil and only 10 thousand tons of sunflower oil, although the price of the latter for the first time this year was 5 50/ton lower than soybean oil.

In total GASC purchased the following batches of oil for delivery in September:

• 60 thousand tons of imported soybean oil at the price of 1 1184 / ton CFR, which is 1 115/ton CFR lower than at the auction on June 8,
• 10 thousand tons of Egyptian soybean oil at the price of 1 1200 / ton CFR,
• 10 thousand tons of sunflower oil at the price of 1 1133/ton CFR, which is 2 235/ton CFR lower than at the auction on June 8.

In total, in June, GASC purchased 180 thousand tons of vegetable oils due to a significant price reduction, which is the largest monthly purchase volume of the last two years.

On the Dalian stock exchange, palm oil futures rose 1.6% to.1,069/ton yesterday, and soybean futures rose 1.5% to. 1,242/ton, indicating increased demand.

The rise in oil prices supported the prices of vegetable oils, especially soybeans, which have recently been the leader of the decline, which can stop the fall in sunflower oil prices.