Suspension of purchases by processors brought down sunflower prices in Ukraine

Surprises continue on the Sunflower market in Ukraine. At the end of the season, it suddenly turned out that no one needed expensive sunflower, and almost all processors stopped buying it, because they could not sell stocks of sunflower oil at a high price. As a result, in May, purchase prices for sunflower with delivery to the plant fell by 20-25% to 20000-20500 UAH/ton. if the demand for sunflower oil does not recover, prices may decrease to 18000-19000 UAH/ton.

At the end of the season, producers still have small reserves of sunflower, and processors have large reserves of unrealized sunflower oil, so only after its sale will they be able to continue purchasing sunflower, when they understand what is the highest price for it to pay in order to have a positive processing margin. At the same time, most plants plan to first process rapeseed of the new crop, and only then start processing sunflower of the old and new crops.

Supply prices of Ukrainian sunflower oil for delivery in June – July decreased to 1 1450-1480/ton FOB, but demand prices are not declared, although some buyers voice the level of 1 1270-1300/ton FOB. The greatest demand of buyers is observed for the supply of oil from the new crop, prices for which are 1150-1200 f/ton FOB.

In the neighboring markets of palm and soybean oil, exchange prices stabilized.

Malaysia's August palm oil futures fell 2.3% to 3,919 ringgit/ton, or 9 948/ton, yesterday, losing Friday's gains.

Chicago SWOT didn't work yesterday because it was a day off in the US. But according to news from Argentina, in the physical market, prices for soybean oil fell to F 1,300/ton FOB up River, as sellers are ready to significantly reduce prices against the background of a sharp drop in the price of sunflower oil.

Within a week, demand for oil may increase due to the improvement of the coronavirus situation in India. Perhaps this will stop the fall in sunflower prices, especially given that prices for rapeseed of the new crop in the port remain at a high level of 6 600-630/ton.