Sunflower prices in Ukraine continue to fall due to increasing supply and export problems

Dry and warm weather in Ukraine has allowed farmers to accelerate the harvest of sunflower and soybeans, which is rapidly increasing the supply of the new crop and continues to put pressure on sunflower prices in Ukraine.

 

As of October 6, sunflower in Ukraine has been harvested from 49% of the area, 5.38 million tons have been threshed with an average yield of 2.12 t/ha. At the same time, sunflower yields are gradually increasing as the harvest progresses, which further increases supply on the domestic market.

 

The constant shelling of ports and ships leaving Danube ports is putting significant pressure on the sunflower market in Ukraine, which is why exports of sunflower oil and meal remain limited.

In recent days, the oil extraction plant in Chornomorsk has been damaged again, causing oil tanks to catch fire and halting reception and processing. A ship transporting the oil was also hit, increasing losses for processors and exporters and further reducing the volume of sunflower processing in Ukraine.

 

Many processing plants have formed 5-7-day queues for receiving sunflower. The reason is the reduction in actual processing capacities and slower shipments of sunflower oil and meal for export without full use of Black Sea ports.

 

Purchase prices for sunflower seeds decreased by another 500–1,000 UAH/t over the week to 16,500–17,500 UAH/t including VAT, or $320–350/t excluding VAT, with delivery to the plant at an oil content of 48%.

Thus, purchase prices for sunflower in Ukraine continue to decline amid a rapid increase in the supply of the new crop and limited processing and export opportunities.

 

Export demand prices for sunflower for delivery to Bulgaria decreased by $10–20/t to $535–540/t due to a sharp drop in the euro exchange rate. At the same time, the price in euros remains at the level of €480–485/t.

Sunflower exports from Ukraine to Bulgaria actually remain limited due to the need to obtain licenses and the Ministry of Economy's increase in minimum export prices, which they promise to adjust only after October 10.

 

As we predicted, the cost of road and rail logistics to the EU continues to rise, so the pressure on domestic sunflower prices, prices for sunflower oil and meal is increasing.

No significant improvement in the logistical situation is expected in the coming months, so with a further increase in the supply of the new crop, purchase prices for sunflower in Ukraine may continue to decline.