Category Archives: market overview

Prices are rising, processing margins are falling

What’s happening on the market

The rise in oil seed prices has become a significant challenge for the agricultural sector, but at the same time, the decline in processing margins threatens the stability of this industry. The current situation shows that due to the high cost of raw materials, the profitability of processing is decreasing, and the financial burden on producers and processors is increasing. On the other hand, the oil seed market remains an important export direction for Ukraine, which reinforces the need for effective adaptation to new conditions.

The bulk sunflower oil market in Ukraine

The bulk sunflower oil market in Ukraine is one of the key ones for the country’s economy and agricultural sector.

The main aspects of this market:

1. Ukraine is a leader in world trade: In the 2023/24 marketing year, Ukraine’s share in world trade in sunflower oil is 41%, which makes it the leading exporter of this product. Russia takes second place with a share of 30%[3].

What about sunflower prices?

Farmers are in no hurry to sell large volumes of oil crops, waiting for even higher prices. Refineries are already willing to pay for sunflower with a base oil content of 46% – $520-$525 excluding VAT with delivery, depending on tonnage. This is at least $10 more than last week’s price. Sunflower oil in the ports of Odesa increased by about $40 during the week compared to last week’s prices.

Oil refineries are running out of stocks: sunflower prices are approaching record levels

The shortage of sunflower on the Ukrainian market continues to stimulate price growth. The decrease in the production of this oil crop compared to last year leads to a lack of raw materials for Ukrainian factories. According to analysts, sunflower prices have already exceeded UAH 23,000/t, and according to forecasts, it may reach UAH 24,000–24,500/t by the end of October. This is due to the high demand for sunflower oil with a shortage of raw materials.

Sunflower offers increased, prices stabilized at UAH 20.5-21 thousand/t

Analysts report that sunflower prices are kept at the level of UAH 20.5-21 thousand per ton, including VAT and delivery to factories. The price depends on the region of supply and the level of oiliness. The market is gradually filled with offers of sunflower, which contributes to the stabilization of prices.

Export of meal. July 2024

According to IA “APK-Inform”, in July 2024, the export of Ukrainian sunflower meal decreased to approximately 290 thousand tons, which is 28% less than in June, but 12% more compared to July 2023. This is the highest July indicator in the last 4 years.

In particular, supplies to China decreased by 16% to 179,000 tons, while exports to the European Union increased by 4% and reached 102,000 tons.

Demand for sunflowers of the new crop of 2024

The demand for new-crop sunflower continues to grow, which is accompanied by news about the state of sown areas and another decrease in the forecast for the production of this oil crop in Ukraine in 2024. This was reported by APC-Inform, according to data published on agronews.ua.

Currently, preliminary prices for sunflowers of the 2024 harvest range from UAH 18,500 to UAH 20,000/t. However, processing companies are refraining from making specific proposals regarding purchase prices due to the current market volatility.

Processing plants are ready to buy sunflowers of the old crop at higher prices

If earlier we wrote that Sunflower prices are unchanged, today the situation is changing and processing plants are ready to buy sunflowers at higher prices in the range of UAH 20,000..