Sharp Increase in Sunflower Prices

Sunflower prices in Ukraine have surged to 21,000 UAH per ton with delivery to the plant, marking a three-year high. This 25% increase over the past month is attributed to the sharp rise in export prices for sunflower oil and meal, as well as the depreciation of the hryvnia to a record low of 40.5 UAH per dollar.

Weekly Price Trends

During the past week, purchase prices for sunflower further increased by 500-1000 UAH per ton, reaching 20,300-21,000 UAH per ton (including VAT) or $440-460 per ton. This rise comes amid limited supply from farmers at the end of the season. Large volume purchases were recorded at prices around 20,300-20,600 UAH per ton under FCA-farm and EXW-elevator terms.

Export Market Dynamics

Export prices for sunflower oil delivered to Black Sea ports jumped by $100 per ton over the month, reaching $890-900 per ton. This increase is driven by a significant rise in exports in May, totaling 720,000 tons compared to 626,000 tons in April, with strong demand from India. Last week, demand prices hit $920 per ton in Ukrainian ports, surpassing the prices for delivery to Bulgaria, which remain at $880-890 per ton.

Sunflower Meal Prices

Demand prices for sunflower meal delivered to Black Sea ports rose to $225-230 per ton, a monthly increase of 15-18%. However, these prices have slightly decreased to $220-225 per ton due to falling soybean meal prices on exchanges.

Price Trends for Sunflower Oil

According to Trading Economics, the average price of sunflower oil with delivery to buyers decreased by 2% to $912 per ton during the week but gained 7.2% overall for the month. Export demand prices for sunflower delivered to DAP Bulgaria remain at $450-460 per ton, indicating that the price increase in Ukraine is driven by the minimal supply of raw materials at the end of the season.

Current Planting Progress and Weather Conditions

As of June 5, 5.19 million hectares of sunflower have been sown in Ukraine, representing 98% of the planned area, nearly matching the sowing level on June 9, 2023 (5.3 million hectares). Weather conditions generally favor crop development, although central and eastern Ukraine continue to experience a lack of rainfall.

Future Market Projections

Forecasts for a significant increase in sunflower and soybean planting areas instead of corn have not yet materialized, keeping the sunflower yield forecast at last year's level. August futures for palm oil on the Bursa exchange in Malaysia remain stable at 3960 ringgit per ton ($844 per ton), as exporters aim to maximize shipments to India amid rising sunflower oil prices and falling soybean oil prices.

Soybean Oil Market Trends

July soybean oil futures on the Chicago exchange fell by 5.3% at the beginning of the week but recovered 2.7% yesterday, trading at the same level as a month ago, $978 per ton. Argentina is completing its soybean harvest, which will increase the supply of soybean oil and meal, already impacting Ukrainian soybean meal sellers due to decreased demand from Europe.

Comment

The Ukrainian sunflower market is currently experiencing significant volatility, driven by export demands and currency fluctuations. With the season drawing to a close, stakeholders must navigate these challenges carefully. The potential for continued high prices remains, but market participants should stay alert to changes in global supply dynamics and local weather conditions that could impact future trends.