Ukraine. Sunflowerseeds stocks ample yet not traded in second half of 2021/22 – opinion

In the second half of the 2021/22 season, a non-standard situation occurs when sunflower is in stock but unavailable for purchase, as the producers will keep it for the next season. In their opinion, “let it wait in the storage.” Moreover, the physical availability of the raw material (sunflowerseeds) does not determine the price of sunflower oil, Commercial Director at Poseidon Tradewaves Konstantin Bugera told Latifundist.com.

“Despite a record harvest, in the first half of the season, which is traditionally more intensive and profitable, plants processed less raw material than at the start of the previous season. This is due to the fact that processors have a pretty low crushing margin [the difference between the income from the sale of finished products and the costs of purchasing and processing raw material – ed.]. Agricultural producers were holding back the sales of sunflowerseeds and the plants had nothing to process,” the trader stressed.

Vegetable oil industry in Ukraine (click for higher resolution)

By and large, it does not matter what the balance between the production of sunflower and the availability of sunflower oil is. Much more important is the cost of alternative products (palm oil, soybean oil) and the situation in the oil market, Konstantin Bugera states.

According to experts, the price situation in the export market of unrefined sunflower oil is evolving in various directions. On the one hand, rising prices for palm oil and crude oil support prices, on the other hand, lower prices for soybean oil and limited demand contribute to a reduction in the price of sunflower oil. Such price movements will persist in 2022, although there will not be a dramatic increase in the price of sunflower oil this year like it was in 2021.

Previously reported that 99% of sunflower crop in Ukraine is processed.

Crude sunflower oil production in Ukraine in 2020/21 totalled 4.7 mln t. Refined sunflower oil output by crushers in Ukraine made up 745.3 thou. t.

In late December, the Government of Ukraine imposed price regulation on sunflower oil having added it to the list of goods of significant social importance.

Latifundist.com

Tags: Ukraine, sunflower oil, sunflower, soybean oil, prices, palm oil