After a short-term increase in demand, sunflower prices in Ukraine fell again

As we predicted earlier , after renewing the seasonal high, sunflower prices in Ukraine fell again under the pressure of the strengthening hryvnia exchange rate and falling prices for crude oil, palm oil, and soybean oil.

 

Due to difficulties with the sale of sunflower oil this year, the rate of sunflower processing in Ukraine remains at a record low. Some plants are standing by and stockpiling raw materials, hoping that oil prices will rise in the second half of the season.

 

According to the APK-Inform Agency, sunflower processing volumes have been decreasing for the second month in a row, and in January they decreased by 16% compared to December to 800-840 thousand tons, which was the lowest figure for this month since the 2011/12 MY.

 

Another problem for processors is the restraint of sunflower sales by farmers, especially at the beginning of the season. Due to the shortage of raw materials, many plants stopped processing sunflower in November-December and stopped or switched to processing soybeans.

 

During the week, purchase prices for sunflower with an oil content of 52% fell by 1,000-1,500 UAH/t to 26,000-26,400 UAH/t with delivery to the factory. Prices for seeds with an oil content below 52% have a discount of 300-400 UAH/t.

 

The main reason for the low demand for Ukrainian sunflower oil remains aggressive sales of oil from the Russian Federation at a price lower by $30-40/t against the backdrop of an increase in export duties.

 

In Ukraine, sunflower oil demand prices fell by $10-20/t to $1,050-1,080/t with delivery to Black Sea ports, but demand and supply volumes remain low.

 

According to Trading Economics, the average price for sunflower oil delivered to buyers in two days increased by 1.6% to $1,291/t (+1.6% per week).

 

March soybean oil futures on the Chicago Board of Trade rose 3.3% on Friday and Monday following Trump's decision to impose a 25% tariff on goods from Canada, but amid an agreement to postpone new tariffs for a month, quotes fell 3.8% to $987/t, in line with the previous week's level.

 

April palm oil futures on the Bursa exchange in Malaysia rose 2% yesterday to 4,373 ringgit/t or $978/t (+3.6% weekly) following soybean oil prices, but their growth is limited by low export demand.

 

China celebrates the Lunar New Year from January 29 to February 5, after which markets expect demand for vegetable oils to increase. In addition, the leaders of the United States and China are scheduled to discuss tariffs and mutual trade in a phone call today.