Ukrainian Sunflower Prices See Modest Gains

Sunflower prices in Ukraine rose during the week as producers withheld sales, causing a supply shortage. Prices for sunflower seeds with 50% oil content increased by 200-300 UAH per tonne. Ans its reaching 25,800-26,300 UAH per tonne with delivery to factories. However, processors have begun purchasing sunflower seeds only for pre-sold volumes of sunflower oil, as demand prices for oil saw a significant decline.

USDA Increases Global Production Forecasts

The USDA's December report surprised traders by increasing the forecast for global sunflower production in the 2024/25 marketing year by 70,000 tonnes, now estimated at 50.512 million tonnes. For Ukraine, production forecasts rose by 400,000 tonnes, reaching 12.9 million tonnes, while Russia's estimate increased by 300,000 tonnes to 16.3 million tonnes.

In contrast, official data shows that Ukraine has threshed only 10.1 million tonnes of sunflower seeds from 4.9 million hectares, covering 97% of the area. Russian agencies estimate their sunflower harvest at 15.8 million tonnes. Meanwhile, global sunflower consumption forecasts rose by 100,000 tonnes to 51.313 million tonnes, while ending stocks decreased slightly to 2.27 million tonnes.

Rising Sunflower Oil Production Pressure Prices

The USDA increased its forecast for global sunflower oil production in the 2024/25 marketing year by 550,000 tonnes to 19.96 million tonnes. Ukraine's sunflower oil production estimate rose by 180,000 tonnes, reaching 5.4 million tonnes, while Russia's increased by 130,000 tonnes to 6.61 million tonnes.

Global sunflower oil export forecasts also saw an increase of 300,000 tonnes. With Ukraine projected to export 5 million tonnes and Russia 4.08 million tonnes. Ending stocks for sunflower oil rose by 130,000 tonnes to 2.22 million tonnes.

Despite these adjustments, sunflower oil prices faced downward pressure:

• Prices at Black Sea ports remained at $1,10-$1,12 per kg.
• Prices for delivery to Poland or Bulgaria hovered around $1,15-$1,16 per kg.

Conclusion: Balancing Supply and Demand

While sunflower prices in Ukraine showed modest gains due to restrained sales, increased production forecasts and declining global oil prices are creating significant headwinds for the sunflower oil market. The market will likely remain under pressure in the coming months.





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