Sunflower prices in Ukraine rose amid supply shortages, but pressure on them increased as production forecast increased in USDA report

During the week in Ukraine, prices for sunflower with 50% oil content increased by 200-300 UAH/t to 25,800-26,300 UAH/t with delivery to the factory against the backdrop of producers restraining sales, but processors began to buy sunflower only for the sold volumes of oil, the demand prices for which dropped sharply.

In the December report, USDA experts unexpectedly for traders increased the forecast for global sunflower production in 2024/25 MY by 0.07 to 50.512 (56.03) million tons, in particular for Ukraine – by 0.4 to 12.9 (15.5) million tons, the Russian Federation – by 0.3 to 16.3 (17.1) million tons, while for Argentina the estimate was left at 4 (3.9) million tons. At the same time, according to official data, only 10.1 million tons of sunflower were threshed from 4.9 million hectares or 97% of the area, while in the Russian Federation local agencies estimate the harvest at 15.8 million tons. The forecast for global sunflower consumption has been increased by 0.1 to 51.313 (56.67) million tons, while the estimate of ending stocks has been reduced by 0.01 to 2.27 (3.2) million tons.

The USDA also increased the forecast for world sunflower oil production in 2024/25 MY by 0.55 to 19.96 (22.13) million tons, in particular for Ukraine - by 0.18 to 5.4 (6.75) million tons and the Russian Federation - by 0.13 to 6.61 (6.82) million tons. The forecast for world sunflower oil exports was increased by 0.3 to 12.33 (15.04) million tons, in particular for Ukraine - by 0.18 to 5 (6.26) million tons and the Russian Federation - by 0.13 to 4.08 (4.4) million tons, and the estimate of ending stocks - by 0.13 to 2.22 (2.95) million tons.

The decline in the price of palm oil and forecasts of increased sunflower oil production are increasing pressure on sunflower oil prices, which this week remained at $1,100-1,115/t with delivery to Black Sea ports and $1,150-1,160/t with delivery to Poland or Bulgaria.

According to the USDA report, January soybean oil futures on the Chicago Board of Trade fell by 1.7% to $936/t (-8.9% for the month), responding to an increase in the forecast for global soybean production.

Palm oil prices fell 5.4% in two sessions, despite lower forecasts for its production, exports and stocks, which will also increase pressure on sunflower oil prices.