Processors have crashed prices for new crop sunflower in Ukraine

Powerful Russian missile and drone attacks on the Odessa region and Black Sea infrastructure continue, so all processing plants and export terminals have stopped work and do not plan to resume it yet, pending the resolution of issues with the safety of work and vessel calls to ports.

 

Processing and purchasing of old-crop sunflower in Ukraine has practically stopped, and only small factories continue to buy sunflower for delivery to the factory in August, lowering prices by 2,000-4,000 UAH/t to 25,000-27,000 UAH/t in a week. Export demand prices for sunflower oil for delivery in August to Danube ports remained at $1,320-1,335/t, but prices for sunflower oil for delivery to the EU decreased to $1,280-1,330/t against the backdrop of an increase in the supply of cheap Ukrainian rapeseed oil, which is offered at a price of about $1,200-1,250/t at the EU border.

 

Processors in southern Ukraine have stopped work, so all factories in the country have a huge supply of rapeseed at low prices (about 20,000-21,500 UAH/t with delivery to the factory), and have already formed rapeseed processing programs until the end of October - November with a fairly good processing margin. Logistical possibilities for exporting meal and oil across the western border to the EU and other countries are limited, so factories in their sunflower processing programs take into account high logistics costs and the possible lack of exports via the Black Sea.

 

Accordingly, processors declare forward prices for new harvest sunflower at a low level of 19,000-20,000 UAH/t including VAT ($370-390/t excluding VAT), not expecting a quick resumption of the Black Sea ports and exports through them.

 

The Ukrainian Armed Forces' strikes on the Russian Black Sea ports in response to attacks on Ukrainian infrastructure will also limit the export of grain and oil from the Russian Federation, which will increase world prices and increase demand for Ukrainian oil and grain, which can still be exported to the EU or sent in transit through the EU to third countries, even despite higher logistical costs than through the Black Sea ports.

 

Therefore, we do not expect a further sharp drop in prices for sunflower and rapeseed, especially given the prospects of the Russian Federation returning to negotiations on the restoration of safe navigation in the Black Sea under pressure from Turkey, which has a fairly large profit from trade in Ukrainian and Russian grain and oil.