Main points
- Sunflower prices are rising in Ukraine due to complicated logistics and farmers' restraint in sales.
- Growing demand for sunflower oil and falling palm oil prices are affecting the market, increasing sunflower purchase prices.
Sunflower prices are rising / Photo Pixabay
Cold weather and snowfall in Ukraine have slowed grain deliveries to ports, while sunflower prices continue to rise. Processors have stepped up sales of the oil, trying to secure favorable quotes amid an unstable global market.
Why are sunflower prices rising now?
A new wave of frost and snowfall in Ukraine has once again complicated logistics and slowed down grain deliveries to ports, GrainTrade reports. At the same time, processing plants have resumed work, expecting a seasonal increase in sunflower supply and trying to sell sunflower oil at favorable prices.
During the week, sunflower purchase prices increased by another 500 hryvnias per ton, to 30,000-31,000 hryvnias per ton ($610-630 per ton excluding VAT at 50 percent oil content) delivered to the plant. In ports, processors are willing to pay more for large batches, although domestic plants are operating stably and have sufficient stocks of raw materials.
The increase in demand for sunflower oil by 10-20 USD per ton – to 1285-1290 USD delivered to ports – allowed to increase the purchase prices for seeds. At the same time, prices delivered to India remained at 1400-1410 USD per ton on CIF Mumbai terms under the pressure of the decline in the price of palm oil.
Please note! May palm oil futures in Malaysia have fallen by about 5 percent in two weeks to $1,030 per ton due to reduced exports in the first half of February. Additional pressure on European prices was caused by information about the sale of about 300,000 tons of sunflower from Argentina to Bulgaria, which is stimulating Ukrainian processors to sell their products more actively.
During the period from February 1 to 11, Ukraine exported about 134 thousand tons of sunflower oil, mainly to the European Union countries, while in January the volume was about 393 thousand tons, and in December – 550 thousand tons.
The holiday season in China and seasonal demand slowdown in India could limit further price increases, so processors will be cautious in purchasing. At the same time, with rising temperatures, sunflower supplies to the market are expected to increase.
Important! In Argentina, as of mid-February, more than a third of the sown area has been threshed and more than 2 million tons of sunflower have been harvested with an average yield of about 2.2 tons per hectare. The main harvest in key regions will start in late February – early March.
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