Wedoany.com Report-May 18, The seasonal increase in sunflower oil supplies from Argentina and Russia is impacting Ukrainian sunflower oil prices, leading to a reduction in sunseed purchase prices.

Argentina has achieved a record harvest of 4.7 million tons of sunseed this year, which has driven an uptick in sunflower oil imports from the country, especially by Indian buyers. Concurrently, Russian sunflower oil prices are also falling, influenced by reduced export duties and lower sunseed prices in Russia.

According to IKAR, between April 21 and May 11, sunflower seed prices in Russia decreased by 1%, reaching $400-420 per ton (excluding VAT). Sunflower oil prices in Russia also dropped by 0.5%, reaching $910-940 per ton (excluding VAT). However, the processing margin remains negative. The halving of the export duty on sunflower oil in Russia from March has further contributed to a decrease in export prices for Russian sunflower oil, with May delivery prices falling to $1,075-1,100 per ton (FOB).

In Ukraine, export prices for sunflower oil dropped to $1,110-1,115 per ton for delivery to Black Sea ports and $1,150-1,170 per ton for delivery to Germany and Macedonia. This price decline is driven by increased competition from Argentine and Russian sunflower oil in the Indian market and reduced demand from European buyers, who are turning to cheaper crude oil and rapeseed oil.

For sunseed with 50% oil content, prices remained stable during the week, at 26,000-26,700 UAH per ton ($550-565 per ton excluding VAT), with delivery to the plant. However, the number of offers from producers increased, while small processors continued to face challenges due to low or negative processing margins. As a result, some plants with processing capacities of 20-150 tons/day have been put up for sale.

Favorable precipitation in Eastern Europe, Ukraine, and Russia has improved sowing and crop development conditions, which could lead to a rise in sunflower planting area. This shift may result in reduced soy cultivation, which was less profitable this season, and further pressure on sunflower oil prices for the new crop.

Meanwhile, soybean oil prices have risen by 7% in the past week, offering some support for oil prices, but palm oil prices remain under pressure due to rising production and inventories. In the near term, the availability of cheaper palm oil will likely limit the increase in sunflower oil prices, as importers shift their purchases towards more affordable alternatives.