Purchase prices for sunflower in Ukraine continue to fall amid increasing supply and falling oil prices

Sunflower oil demand prices in India fell by $30/t to $1,440/t CIF Mumbai during the week amid a sharp increase in supply from the Black Sea region and forecasts of a decline in demand from India after increasing supplies in recent months, especially of cheap soybean oil.

Demand prices for Russian sunflower oil for delivery in September-October decreased by another $30-40/t to $1,250-1,260/t FOB per week, which increased pressure on prices in Ukraine, where demand prices also fell by $30-40/t to $1,200-1,220/t per week for delivery to Danube ports.

In August, Ukraine exported only 147 thousand tons of sunflower oil and 110 thousand tons of sunflower meal, which indicates limited export opportunities by rail and road across the western borders.

The lack of hope for the start of ceasefire talks between the Russian Federation and Ukraine continues to block exports from Black Sea ports, and the threat of strikes on grain elevators and oil extraction plants limits the work of processing enterprises.

Purchase prices for new crop sunflower decreased by 500-1000 UAH/t over the week to 18700-19500 UAH/t with VAT ($370-385/t without VAT) with delivery to factories in central Ukraine, but processors warn that they will not accumulate large volumes, as they expect further price declines under supply pressure and difficulties with the export of meal and oil.

Export demand prices for sunflower for delivery to Bulgaria decreased by $10-15/t to $550-560/t during the week amid increasing supply from both local farmers and Ukraine. However, Ukrainian farmers need to obtain appropriate licenses to supply sunflower to Bulgaria, which slightly delays the shipment of the new crop.

Sunflower exports at the beginning of the season will support producers and contain further declines in prices for processors, but rising logistics costs in October-November will also lower exporters' prices.