Rising vegetable oil prices support sunflower prices in Ukraine

The lack of progress in resolving the conflict in the Middle East is keeping oil prices high, leading to a gradual increase in vegetable oil prices due to increased demand from the biofuel industry.

 

Trump's televised address to the nation today, in which he promised to end the war with Iran within 2-3 weeks, did not meet the expectations of analysts who were expecting an announcement of a halt to attacks and a move to negotiations with Iran, which is why oil prices rose above $100/barrel again.

 

In Ukraine, purchase prices for sunflower increased by another 500 UAH/t during the week to 31,000-32,000 UAH/t or 620-640 $/t excluding VAT (for 50% oil content) with delivery to the plant, against the background of the fact that demand prices for Ukrainian sunflower oil increased by 5 $/t to 1,295-1,305 $/t with delivery to Black Sea ports.

 

Processors continue to actively build up sunflower stocks amid increased sales by farmers, expecting further increases in sunflower oil prices following other vegetable oils in the near future. On the other hand, demand for meals is not increasing yet, as feed grain prices remain stable at low levels and South America is increasing the supply of soybean meal.

 

It should be noted that due to the low rate of sunflower processing in the first half of the season , as of March 1, sunflower stocks in Ukraine amounted to 3.5 million tons, which is 1.4% higher than the corresponding figure last year. This will allow to increase the rate of processing and load the capacity before the start of rapeseed processing in July, and take advantage of high prices on the world market.

 

In April, competition between Ukrainian oil and South American soybean and sunflower oil will intensify as buyers will actively purchase the new crop.

 

As of March 27, Argentina had threshed 61% of its sunflower acreage and is increasing supplies of sunflower to the EU and sunflower oil to the world market, which is reducing demand for Ukrainian oil.

 

In Brazil, soybeans have already been harvested on 75% of the area (82% a year ago), and soybean exports are forecast to reach 16 million tons in March, compared to 10.7 million tons in February.