Sunflower prices in Ukraine are rising, but further growth is limited by competition on world markets

Two weeks of prolonged rainfall in Ukraine have severely delayed the sunflower harvest, leading to an increase in purchase prices. The collapse in world oil prices and the resulting decline in palm and soybean oil quotes have had little impact on demand for sunflower oil, so its prices remain high.

As of October 9, 6.3 million tons of sunflower were harvested from 66.8% of the area in Ukraine with an average yield of 1.85 tons/ha, while last year on this date, 8.8 million tons of sunflower were harvested from 87% of the area with a yield of 2.05 tons/ha.

Dry, albeit cool, weather has set in this week, which will facilitate the harvest of sunflower and soybeans and possibly increase supply from farmers.

Over the week, the demand prices for sunflower in Ukraine increased by another 500 UAH/t to 28,000–28,500 UAH/t or $590–600/t excluding VAT (for 50% oil content) with delivery to the factory, which was also facilitated by the 1% increase in the dollar exchange rate against the hryvnia.

According to APK-Inform, in September, the volume of sunflower processing in Ukraine amounted to only 560 thousand tons, which is the lowest figure since July 2022.

Amid the delay in deliveries, demand prices for sunflower oil remain high at $1,200–1,220/t for delivery to ports in October, as prices for Russian oil increased by $10/t to $1,180–1,190/t FOB during the week.

The SovEcon company has lowered its forecast for the sunflower harvest in the Russian Federation from 17.4 million tons to 17.2 million tons, while the USDA estimates it at 17.5 million tons, and other experts estimate it at 18.5-19 million tons. The reduction in forecasts was a result of "record low sunflower yields in the south of the Russian Federation due to drought."

Quotes for sunflower oil for delivery to India increased by $10/t to $1,300–1,310/t CIF Mumbai in a week.

Rising palm oil inventories in Malaysia and a 3.5% drop in oil quotes over the week have led to palm oil quotes falling 2% over the past two sessions to $1,064/t, while December soybean oil futures fell 1% to $1,112/t.