Geopolitical Tensions Drive Up Sunflower Oil Demand and Prices in Ukraine

Last week, global soybean and palm oil prices surged amid speculation over potential escalations between Iran and Israel. This has boosted prices for sunflower oil, with Ukraine’s limited sunflower supply pushing domestic purchase prices higher to meet demand.

Rising Sunflower Prices in Ukraine

In Ukraine, constrained sunflower supply has led to increased prices, with purchase rates for sunflower seeds (50% oil content) reaching €563-581 per ton by week’s end, and processors offering €594 per ton for seeds with over 52% oil content. As of October 24, Ukrainian farmers have harvested 9.54 million tons from 4.63 million hectares (94% of the area) with yields at 2.06 tons per hectare. To secure raw material, some factories have switched to soybean processing, slightly reducing competition in the soybean market.

Price Trends for Sunflower Oil and Related Products

Sunflower oil prices at Black Sea ports climbed by €20-30 per ton to €1,080-1,100 per ton, while meal prices dropped by €3-5 per ton to €215-222 per ton. Declines in corn prices and an increased supply of soybean meal contributed to this trend.

Market Impact on Soybean and Palm Oil Futures

Yesterday, December Brent oil futures dropped by 6.3% to €65.78 per barrel, impacting soybean and palm oil prices; December soybean oil futures on the Chicago Stock Exchange fell by 3.5% to €864 per ton, while December palm oil futures on the Malaysian exchange decreased by 1.6% to €219.34 per ton ($1,043 per ton), even after reaching a 2.5-year high.

Outlook for Sunflower and Vegetable Oil Markets

With oil prices likely to decline, a corresponding drop in vegetable oil quotes could follow. Farmers may benefit from selling sunflowers at current high prices, as mills could reduce processing due to negative margins affected by lower oil prices.





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