A large harvest of sunflower in Russia puts pressure on world prices

After the abundant harvest caused a fall in the price of sunflower in Ukraine, began to fall the purchase price of sunflower seed in Russia, where it is also expecting a record collection.

According to the Agency SovEcon, in the course of a week the prices of sunflower seeds in Russia decreased by 1,500 rubles/ton to 16000-16500 tonne or 250-260 $/t, which is the lowest level since November 2014, when the sunflower seeds bought at 15550 RUB/t

As of 18 October in Russia, with 5.6 million ha or 65.7% of the acreage and produced 10.7 million tonnes of sunflower seed yield of 1.92 t/ha (1.64 t/ha in 2018). Dry weather and high productivity will allow to collect a minimum of 13.5-14 mln tonnes of sunflower, which will lead to increased production and export of sunflower oil.

increasing the supply of cheap Russian sunflower oil puts pressure on prices of Ukrainian oil decline despite the rise in prices of palm and soybean oil.

In Ukraine as of October 18, with 92.8% of the areas harvested 13,113 million tons of sunflower seeds with the yield of 2.42 t/ha. This means that the harvest will amount to 14.2-14.5 million tonnes compared with the earlier projected 15-15,4 million tons and last year's 15.2 million tons.

Despite the strengthening of the dollar on the interbank market last week 3%, procurement price of sunflower in Ukraine remain at the level of 8200-8800 UAH/t with delivery to the plant. Processors limit the price increase due to lower prices of sunflower oil and a possible increase in the supply of cheap Russian oil.

Prices demand for Ukrainian sunflower oil with delivery in the 1st quarter fell to 670-673 $/t FOB, while the bid prices for delivery in December remain at the same level 680-682 $/t FOB.

Prices supported the rise in prices of palm and soybean oil amid rising demand from India and China.

Futures on palm oil exchange in Malaysia on Friday rose by 1.3% to 546,5 $/t, and within a week they rose by 2.4%.

Futures soybean oil in Chicago for the week rose to the highest level since March - 670,8 $/ton amid strong export sales of soybeans  to China, which last week amounted to 1.6 million tons.

the Market expects the active purchases by China of U.S. soybeans because only the US can supply oil from November to January, while from February soybean new crop will begin to supply Brazil.