Global drivers push sunflower oil prices up. When is it going to cease climbing?
Caio Alves
Published 2021년 1월 20일
The year started with an unthinkable SFO price level when observed from three or four months ago. With a greater demand from China all commodities reacted on a bullish manner. But what make sunflower oil and seed any different?
The Chinese importers anticipated their purchasing, about six or seven months ago. Buying wheat, corn, soybeans, flour, oils, proteins, vegetables at steady prices or even at lower rates since most of the global consumption markets were restriced by quarantine and/or shifting their behavior to a lesser appetite. Coupling onto this the Black Sea has been affected by climate where the sunflower and wheat harvest had a diminished yielding, of which it cost 35 million tons of European wheat and reduced significantly sunflower seed output. In South America the climate of Argentina had also imposed its toll, largely impacted by droughts losing 5 million real tons of this crop.
The already higher demand saw emerging with an improvement in purchasing power, by the rise from the middle or lower class to the upper middle class, implying in better food habits and supply. Above all, in the countries of Asia Pacific and the Black Sea region.
On the side the shortfall on inventories in the United States, referenced by USDA stirred prices up and fundamentally because the climate in South America has not yet calmed down too, meaning that producing regions are still suffering from drought related to the La Niña, and prices cannot hold themselves on any of the loose ends.
That is why today price support scenario is closely related to the South American climate.
Sunflower seed prices broke the $ 430-450 barrier levels and getting almost at $ 500 with further premiums. From the farm to the crushing industry, oil prices are also sky-rocketing, and even with a tested good oleic content, it reached to an unimagined and extraordinary $ 1,480/ton average, FOB Buenos Aires. 50% higher than some prices observed last year. Crude oil rates lie on $ 1,200/ton mark.
If climate situation remains affecting sunflower seed and its correlative crops in Brazil & Argentina prices may continue to rise up to March at least.
The Chinese importers anticipated their purchasing, about six or seven months ago. Buying wheat, corn, soybeans, flour, oils, proteins, vegetables at steady prices or even at lower rates since most of the global consumption markets were restriced by quarantine and/or shifting their behavior to a lesser appetite. Coupling onto this the Black Sea has been affected by climate where the sunflower and wheat harvest had a diminished yielding, of which it cost 35 million tons of European wheat and reduced significantly sunflower seed output. In South America the climate of Argentina had also imposed its toll, largely impacted by droughts losing 5 million real tons of this crop.
The already higher demand saw emerging with an improvement in purchasing power, by the rise from the middle or lower class to the upper middle class, implying in better food habits and supply. Above all, in the countries of Asia Pacific and the Black Sea region.
On the side the shortfall on inventories in the United States, referenced by USDA stirred prices up and fundamentally because the climate in South America has not yet calmed down too, meaning that producing regions are still suffering from drought related to the La Niña, and prices cannot hold themselves on any of the loose ends.
That is why today price support scenario is closely related to the South American climate.
Sunflower seed prices broke the $ 430-450 barrier levels and getting almost at $ 500 with further premiums. From the farm to the crushing industry, oil prices are also sky-rocketing, and even with a tested good oleic content, it reached to an unimagined and extraordinary $ 1,480/ton average, FOB Buenos Aires. 50% higher than some prices observed last year. Crude oil rates lie on $ 1,200/ton mark.
If climate situation remains affecting sunflower seed and its correlative crops in Brazil & Argentina prices may continue to rise up to March at least.
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