Market Dynamics: Surge in Sunflower Purchase Prices

In Ukraine, the sunflower market witnesses a notable surge as domestic processors raise their purchase prices for sunflower seeds. This uptick in prices follows an increase in export prices for sunflower oil and meal, prompting processors to intensify their procurement activities. The restrained sales by producers further contribute to the upward pressure on purchase prices.

Impact of Export Prices and Processor Strategies

Over the week, sunflower purchase prices saw a significant increase, climbing by UAH 300-500 per ton to reach UAH 16,700-17,000 per ton (including VAT) with delivery to the plant. This marks the highest level since March 2023. Processors are offering premiums for large batches to accumulate raw material volumes while minimizing processing margins. Consequently, the trajectory suggests a continued rise in sunflower prices, even amidst potential decreases in oil export prices.

Price Trends: Sunflower Oil and Meal

Export prices for sunflower oil, delivered to Black Sea ports, maintain stability at $780-790 per ton due to reduced demand from key markets like China and India, alongside heightened competition with Russian oil. Meanwhile, demand prices for sunflower meal with delivery to Black Sea ports have risen to $195-205 per ton, further bolstering sunflower prices.

Export Market Insights and Competition

The average price of sunflower oil delivered to buyers experienced a marginal 0.7% decline to $851 per ton over the week, contrasting with rising prices of soybean and palm oil. Export demand prices for sunflower remain steady at $325-340 per ton with delivery to Black Sea and Danube ports, and $430-440 per ton at DAP Bulgaria.

Weather and Agricultural Outlook

Sunflower sowing rates surpass those of the previous year, with favorable weather conditions favoring crop development. The potential increase in sowing area, potentially at the expense of corn, could further impact market dynamics. Additionally, early ripening canola may prompt processors to initiate processing earlier, potentially reducing demand for old-crop sunflowers in June and July.

The surge in sunflower purchase prices in Ukraine reflects a complex interplay of factors including export dynamics, processor strategies, and agricultural outlook. Continued monitoring of export demand, weather patterns, and crop development will be crucial in determining the trajectory of sunflower prices. Additionally, competition with other oils in the export market and shifts in agricultural practices may further influence price trends in the coming months.