Purchase prices for soybeans and sunflowers in Ukraine continue to fall

The Russian invasion almost paralyzed Ukraine's oilseeds market, as most processing plants were shut down. But in April, they began to resume work, boosting demand for sunflower and soybeans, especially as European processors intensified their purchases of sunflowers.

Increased supply of oil and meal has increased pressure on the markets of neighboring Poland, Romania and Bulgaria, which are forced to lower prices due to low export rates.

In Ukraine, prices for sunflower meal fell on an ex-works basis from 7-8 thousand UAH / t to 4-4.5 thousand UAH / t, and for sunflower oil - up to 1250-1300 $ / t FCA. Delivery to the ports of Romania and Bulgaria is difficult as transportation is by road and the railroad is filled with corn trains, some of which have been waiting more than a month for wheelsets to be replaced at queues at border crossings at the Romanian border.

During the week, exporters reduced the purchase prices for sunflower by $ 30-40 / t to $ 640-660 / t DAP, and for sunflower oil - by $ 100-150 / t to $ 1550-1650 / t DAP Romania, Bulgaria. Accordingly, on the basis of the FCA, purchase prices decreased by UAH 500-1000 / t to UAH 13,500-14,000 / t, and processors subsequently lowered them by UAH 500 / t to UAH 14,500-15500 / t ($ 495-530 / t) with delivery to plant.

Poland has simplified vet control of vehicles to reduce queues at the border, which has increased supplies and reduced demand for soybean meal to $ 350-400 / t and oil to $ 1350-1450 / t DAP Poland.

In most regions of Ukraine soybeans with delivery to the plant are bought at 12000-13000 UAH / t, but producers are in no hurry to sell in anticipation of a possible resumption of exports.

Exporters are hardly interested in GMO soybeans due to the complexity of supplies to the EU, as the ports of Reni and Ishmael are mostly transshipped by corn. There is also virtually no GMO-free soy premium, which is currently of no interest to buyers from the EU, where markets are crowded with soybean and sunflower meal previously supplied from Ukraine.

At the same time, the factors of price support in the form of high cost of logistics and restraint of sales by producers, which consider the current low price level unacceptable, remain. However, support factors offset significant stocks of previously purchased soybeans from processors and low purchasing activity. At the same time, the demand for GMO-free soybeans would be lower than for GMOs, which would lead to a greater reduction in prices.

According to the IPA of Ukraine, no more than 2 million tons of agricultural products can be exported per month across the western borders and Danube ports, so without unblocking the ports of Odessa and the Black Sea, a significant increase in export demand should not be expected.