Ukrainian Sunflower Oil Exports in Jeopardy as Export Agreement Expires in November

The Ukrainian sunflower oil market has shown mixed reactions to Russian President Vladimir Putin’s 21 September speech. Some commercial sources have expressed uncertainty about what will happen and what to expect as the export corridor agreement expires on 20 November, 2022. However, others have said they will continue to export agricultural commodities and products as long as possible or even increase the number of exports as quickly as possible to take advantage of the remaining time under the agreement.

Ultimately, Exports from Ukraine will continue, with or without guarantees. The amount of sunflower oil exports could however decrease substantially should the export corridor through the Black Sea close. The FOB Black Sea prices of crude sunflower oil have remained mostly unchanged towards the end of W38. On the other hand, operators in the sector are concerned about the high increases in the freight rates of ships due to the risks they run when heading to Ukraine.

Some analysts believe that Ukraine still has about two months to increase exports of cereals and vegetable oil because they believe that sending new troops from Russia will take roughly two months to train the new soldiers. A worsening of the situation is not to be excluded and an escalation probably means further sanctions, which will potentially decrease export volumes and raise prices in final destination markets.