Sunflower prices in Ukraine are falling due to rapid supply growth

Dry and warm weather in Ukraine is accelerating the harvest of sunflower and soybeans, which is rapidly increasing supply on the domestic market and increasing pressure on purchase prices.

 

As of September 29, sunflower in Ukraine was harvested from 1.66 million hectares, or 32% of the area, 3.36 million tons were threshed with an average yield of 2 tons/hectare. The harvest forecast is estimated at 13–13.5 million tons compared to 10.5 million tons last season.

At the same time, due to damage, some processing plants will not operate, so an increase in the harvest may lead to an excess of supply over demand.

 

Purchase prices for sunflower decreased by another 500 UAH/t over the week to 17,000–19,000 UAH/t including VAT, or $335–370/t excluding VAT, with delivery to the factory.

 

At the beginning of the season, processors kept prices relatively high in order to quickly build up stocks and start processing. However, now many enterprises are already facing significant queues for unloading, so purchases are limited and prices continue to decline.

Additional pressure is created by the rapid increase in the cost of export logistics, which reduces the ability of traders to increase domestic purchase prices.

 

Prices for Russian sunflower oil continue to fall and lost another $40–50/t to $1,220–1,230/t FOB in a week under pressure from growing sunflower production and export restrictions through Black Sea ports.

 

In Ukraine, demand prices for sunflower oil remain low at $1,090–1,100/t with delivery to Danube ports due to increased shelling of port infrastructure and rising freight costs.

Demand prices on an FCA plant basis decreased to $1,050–1,100/t due to the increase in the cost of automobile logistics to buyers in the EU.

 

Export demand prices for sunflower with delivery to Bulgaria remain at $550–560/t, but actual deliveries are limited by bureaucratic obstacles - the need to obtain licenses and the Ministry of Economy's increase in minimum export prices, which they promise to adjust only on October 10.

 

Dry and warm weather over the next 7–10 days will allow producers in most regions to complete the sunflower harvest, further increasing supply and putting pressure on prices.

At the same time, a significant number of farmers plan to postpone the sale of sunflowers until the second half of the season, trying to sell other crops first.