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Favourable weather for completing planting in Ukraine, combined with the end of the sowing season, is pushing farmers to step up sunflower seed sales without waiting for their target price of 30,000 hryvnia per tonne. This is adding to the supply of Ukrainian sunflower oil on the global market, which remains under pressure from large stocks and weak demand from importers, according to the website agronews.ua.
In Ukraine, sunflower oil export prices fell by $10 per tonne to $1,110-1,115 per tonne delivered to Black Sea ports, and to $1,120-1,150 per tonne on a DAP basis to Germany and Macedonia, amid rising supplies of rapeseed oil and soybean oil in the European Union and a continued broad decline in vegetable oil prices. By contrast, Russian sunflower oil prices held steady at $1,120-1,125 per tonne FOB and $1,200 per tonne CIF Mumbai.
Sunflower meal export prices at Black Sea ports also fell by $5 per tonne over the week to $215-220 per tonne, while May delivery prices to France on a CIF basis stood at around $248-250 per tonne. Declining feed wheat and corn prices are adding further pressure on meal prices, which will soon be reflected in sunflower seed prices during June.
Over the course of the week, prices for sunflower seed with a 50% oil content held steady at 26,000-26,700 hryvnia per tonne (equivalent to $550-565 per tonne excluding VAT) delivered to processing plants. Plants have already purchased substantial volumes of seed sufficient to cover their needs until the start of the rapeseed crushing season.
According to Ukraine's Ministry of Agrarian Policy and Food, as of 16 May sunflower had been planted on 3.9 million hectares, or 77% of the planned area (compared with 4.6 million hectares last year). The weather is helping farmers complete planting, and rain expected next week is likely to improve crop conditions and harvest prospects, adding further downward pressure on prices.
It is worth noting that land where winter crop plantings failed in Ukraine, Kazakhstan and Russia is mainly being re-sown with sunflower. As a result, by early June data may show a 10-15% increase in sunflower planted area across the main producing countries, which would further intensify pressure on future sunflower oil prices.
Source: Al Mal Forum