Analysts predict a decline in prices for sunflower seeds in Ukraine

Referring to the data of the State Statistics Service of Ukraine, experts note that agricultural enterprises store 5 million tons of sunflower (this is 30% more than in January 2021), and processing enterprises – 3.2 million tons (7% more than In the past year). At the same time, the sunflower harvest in 2021 is 3.2 million tons more than the previous one.

That is, the farms growing sunflower do not intend to sell it at the prices of the current season, expecting higher offers from processors.

Oilseed extraction plants are not provided with raw materials to load capacities throughout the year, and are unable to offer products on the foreign market at prices that buyers (importers) are willing to pay. By the way, the consumption of sunflower oil in Ukraine is 400-500 thousand tons per year, and the potential production and supply is about 7 million tons. Therefore, the demand for the products of Ukrainian factories is decreasing. The ability of processors to pay high prices for sunflower seeds is also diminishing. Therefore, the most significant factor influencing the cost of sunflower in the country is the cost of sunflower oil and other vegetable oils on the world market. This was reported by the analytics and monitoring department of Prometheus in a comment for Latifundist.com.

From December 2020 to the spring of 2021, sunflower prices have increased up to UAH 25 thousand, along with a rapid rise in the cost of sunflower oil. The result was the refusal of the main consumers to buy Ukrainian oil, prices for both vegetable oil and sunflower fell. The world consumes about 200 million tons of vegetable oil annually, sunflower oil accounts for 10% of world consumption. Apart from Ukraine, sunflower oil producers and exporters are Russia, the EU, Turkey, Argentina and other countries of the world.

“The current tendency of the formation of the demand price is completely opposite to the last year one. Oil buyers reduce their purchases, limit product inventories, immediately respond to price increases, choose cheaper alternatives to sunflower oil (soybean, palm), ”analysts comment.

In December 2021, sunflower oil has already lost about $ 100 in value, but has not yet become cheaper than in December 2020. At the same time, buyers remain passive and are not ready to buy Ukrainian-made products at the available price, having the opportunity to choose cheaper vegetable oils. Oil extraction plants are physically unable to sell their own products.

Analysts point out that if the situation on the world market for oilseeds does not change, buyers will wait for a decrease in the cost of sunflower oil at least to the last year’s level of $ 1100-1200 per ton. In this case, factories will not be able to pay more than UAH 15-16 thousand for seeds. Considering the volume of the potential supply of sunflower and the lack of demand for sunflower oil, and hence the demand for sunflower from the factories, the cost of raw materials for processing may fall even below the specified price range.

As for the domestic market, experts say that as a result of the accumulation of raw materials in anticipation of an increase in the cost of sunflower seeds, a potential (deferred) supply is formed, which remains high. This always leads to lower purchase prices. At the beginning of spring agricultural work, in order to obtain working capital, farmers will have to sell their products. Given the gradual decline in the cost of cereals and the potential volume of sunflower that may enter the market, the price of the latter will begin to decline rapidly.

“If farms decide to hold back sunflower until next year, expecting the risk of crop failure or a decrease in yield due to a lack of fertilizers and drought, a situation will arise when the potential supply doubles – a new one will be added to the old harvest. Accordingly, a super supply is formed, which will bring down the cost of sunflower “, – analysts comment.

According to the experts of the Prometey company, the growth of demand for sunflower oil, an increase in its consumption in the world and, at the same time, a significant rise in the price of other vegetable oils can significantly change the situation for the better. However, in the long term, such changes are not envisaged.

SuperAgronom.com

Tags: Ukraine, Russia, sunflower, Turkey, price, EU, Argentina