In the second half of the season, the global supply of sunflower seeds will be 7 million tons more than last year

Farmers continue to restrain sunflower sales in anticipation of rising prices to record levels of the previous season, but analysts believe that this may lead to a collapse in prices against the background of a spring increase in oilseed supplies, including from South America. In addition, an increase in the area of sunflower sowing in Ukraine and Russia due to a reduction in corn crops will lead to lower prices for soybean oil from the new crop.

In Ukraine, purchase prices for sunflower seeds remain at the level of 20400-22500 UAH/ton with delivery to the plant, depending on the oil content. However, they are under pressure from the strengthening of the hryvnia exchange rate and stable prices for sunflower oil at the level of F 1380-1400/ton FOB, while prices for palm and soybean oil reached 1 1360/ton and.1420/ton, respectively.

In my 2021/22, Ukraine and Russia collected good sunflower harvests. Compared to the previous season, the harvest in Ukraine increased from 13.8 million tons to a record 16.5 million tons, while in Russia it amounted to 15.6 million tons, which is only 50 thousand tons lower than last year’s record. However, the markets have not yet seen the projected increase in the production and export of sunflower oil.

According to Oil world experts, against the background of the expected increase in the sunflower crop in the Southern Hemisphere, which will enter the market in the coming months, and increased sales of seeds by producers of the Northern Hemisphere with significant reserves, the volume of sunflower offers on the world market in January-August 2022 will reach 41.2 million tons, which is 7.2 million tons higher than the corresponding indicator of 2020/21 MG. The main reasons for this are the low rate of sales of raw materials by farmers and low demand from importers of sunflower oil at the beginning of the season, as they expected lower prices for it due to record sunflower harvests in the Black Sea region.

Currently, sunflower processing volumes in Ukraine and Russia are lower than expected, while raw material reserves continue to increase.

The main question for the Sunflower market is how long farmers will hold back sales. Oil World experts believe that we should not expect a better price, given the significant reserves of sunflower seeds, the start of harvesting in Argentina and forecasts of an increase in global production of vegetable oils in the coming months.