Lang
The pronounced downturn in purchase prices for new-crop sunflower seed in Ukraine is directly attributable to the prevailing uncertainty within the sunflower oil market. According to Serhiy Repetskyi, co-founder and partner at Sunstone Brokers, crushing operations are hesitant to acquire raw materials at elevated prices and absorb substantial price risks, as they lack clarity on the autumn selling prices for sunflower oil.
Demand for sunflower seed remains subdued presently. Some Ukrainian processing facilities are continuing to crush rapeseed, a practice expected to persist until at least October 1. Concurrently, large crushing plants located at ports are not anticipated to fully recommence operations in the immediate future. In response to these market dynamics, crushers are reducing sunflower seed purchase prices to mitigate the potential risk of declining sunflower oil values.
Compounding the situation are increased logistics costs and war-related risks, which exert additional downward pressure. Recently, domestic sunflower oil prices in Ukraine have seen a decrease of approximately $20–25 per metric ton, while destination market prices have concurrently risen by $15–20 per metric ton. This divergence has expanded the spread between domestic and destination prices to roughly $40–45 per metric ton, effectively compensating for higher freight, insurance, and traders' risk premiums.
The Danube River continues to serve as the primary export conduit for Ukrainian sunflower oil, facilitating shipments to Europe and Türkiye, including transit via Romania and Bulgaria. The oil is predominantly transported by barges in smaller consignments, typically ranging from 1,000 to 1,500 metric tons, occasionally reaching 2,000 metric tons. The broker indicates that a resumption of large seaborne shipments is improbable over the next two months.
Paradoxically, the Ukrainian sunflower oil market could face a supply deficit as early as September. Existing stocks of old-crop oil are almost entirely depleted, and significant volumes of new-crop oil are not expected to enter the market until October, primarily because some plants are still processing rapeseed. Türkiye is already actively seeking to secure its required September volumes. Demand could strengthen further once European buyers re-engage with the market; however, these buyers are already anticipating lower prices for deliveries scheduled for October through December. Source: UkrAgroConsult