What problems do the Black Sea sunflower oil market expect in 2022?

In 2022, the Black Sea sunflower oil market will face problems, as against the background of forecasts of record oil production, producers are holding back seed sales, S&P Global reports.

India, the world's largest buyer of vegetable oils, plans to increase their imports to 14 million tons in 2021/22 MG, in particular sunflower – to 2.4 million tons compared to 1.88 million tons in 2020/21 MG, which will be facilitated by a reduction in import duties and an increase in world production. During 2021, India repeatedly lowered import duties on food oils to stop the rise in world prices.

The first forecasts of sunflower oil production in Ukraine in the current season were not too optimistic, as the heat could reduce the sunflower harvest. However, it is now expected that in 2021/22 MG the production of sunflower oil in Ukraine will grow by 23% compared to the previous season to a record 7.1 million tons. and the area of sunflower sowing will remain at a high level due to high prices, which will be resistant to "bearish" factors.

In the European palm oil market, where prices rose from. 1,045/ton to a record $1,377.5/ton in 2021, consistently high prices are expected in the first quarter of 2022 amid a labor shortage in Malaysia and high duties on palm oil in Indonesia. In addition, the European palm oil market will be affected by restrictions due to Covid-19 and weather conditions in Asia's main exporting countries.

Recall that purchase prices for sunflower seeds in Ukraine fell to a three-month low, as lower oil prices increase pressure on vegetable oil markets, and the spread of a new strain of coronavirus may lead to increased quarantine restrictions in Europe.