Sunflower prices in Ukraine continue to decline, despite increased exports of sunflower and oil

In Ukraine, export demand for sunflower is increasing, which is preventing further declines in purchase prices for domestic processors, who continue to suffer from low oil and meal exports and rising transportation costs.

As of October 30, 10.339 million tons of sunflower were harvested in Ukraine from 89% or 4.65 million hectares of area with an average yield of 2.22 tons/hectare (1.84 tons/hectare last year), so the supply continues to grow, but one part of the processing plants is idle, and the other remains overloaded with both raw materials and finished products, so it is almost not making purchases.

During October 1-29, Ukraine increased its exports of sunflower seeds compared to the same period in September by 3.5 times from 16.3 to 57.3 thousand tons, of which 23.5 thousand tons were shipped to Turkey, 12.0 thousand tons to Italy, and 5.5 thousand tons to Egypt. Deliveries to Bulgaria are currently delayed due to the slow processing of export licenses.

Exports of sunflower oil in October increased by 84.9% compared to September, from 131.7 to 243.5 thousand tons, of which 37.5 thousand tons were shipped to Romania, 33.8 thousand tons to Turkey, and 32.1 thousand tons to the Netherlands. Exports of oilcake during the same period increased by 14.5% to 310.4 thousand tons.

In Ukraine, the cost of delivering oil and meal by road and rail across the western border continues to grow rapidly, so prices for sunflower oil have already dropped to $900-950/t FCA - plant, and some plants that do not have warehouse capacity to store products are ready to reduce prices to speed up shipments.

During the week, purchase prices for sunflower in Ukraine decreased by another 500 UAH/t to 15,000–16,000 UAH/t with VAT or $280–340/t without VAT with delivery to the factory at an oil content of 48%.

Export demand prices for sunflower with delivery to Turkey remain at the level of $580-600/t, but due to the increase in the cost of road freight, demand prices on ex-works terms have decreased to $350-380/t loaded into a big bag and cleared by customs, which corresponds to the level of 18,000-19,000 UAH/t including VAT and significantly supports domestic prices in Ukraine.

Falling oil prices are putting pressure on palm, rapeseed and soybean oil prices, which are used to produce biofuels. This will continue to put pressure on sunflower oil prices, which will remain under pressure from falling demand until the end of the year.