1. Weekly News

United States

Jun-24 FAO Vegetable Oil Price Index Update

The Food and Agriculture Organization (FAO) of the United States (US) Vegetable Oil Price Index rose by 3.1% month-on-month (MoM) in Jun-24, the highest level since Mar-23. International sunflower oil prices began to increase in May-24 due to tighter Black Sea supplies. A similar trend was also observed in palm oil and soybean oil. However, international rapeseed oil prices remained almost unchanged compared to May-24 but were noticeably higher than Jun-23 due to an expected reduction in global supplies in the 2024/25 season.

India

India’s Sunflower Oil Imports Surged by 14% MoM in Jun-24

India’s sunflower oil imports rose 14% MoM to 467 thousand metric tons (mt) in Jun-24 due to competitive prices. Sunflower oil usually holds a premium of more than USD 100/mt over soybean oil and palm oil, but since it was trading at a discount in Apr-24, Indian refiners placed massive orders for Jun-24 shipments. The increase in sunflower imports boosted the country’s total edible oil imports by 2% MoM to 1.53 million metric tons (mmt), marking the highest level in 10 months. India sources its sunflower oil mainly from Argentina, Brazil, Russia, and Ukraine. Despite the increase in Jun-24, India's sunflower oil imports in Jul-24 are forecasted to decline due to the cessation of discounted pricing relative to competing oils.

Ukarine

Ukraine’s Sunflower Oil Exports Increased by 22.8% YoY in MY 2023/24

Ukraine's gain, oil and oil seeds exports reached 69.86 mmt in the 2023/24 marketing year (MY). In particular, the sunflower oil exports increased by 22.8% year-on-year (YoY) to 6.54 mmt, while sunflower seed exports declined significantly by 86.3% YoY to 324 thousand mt due to the price war with Russia.

2. Weekly Pricing

Weekly Sunflower Oil Pricing Top Producers (USD/kg)

Yearly Change in Sunflower Oil Pricing Top Producers (W27 2023 to W27 2024)

Russia

Russia’s sunflower oil prices remained unchanged at USD 0.93 per kilogram (kg) in W27. Based on a yearly comparison, the price increased by 12.05% YoY. Global sunflower oil prices increased in May-24 as Russia exported most of its products to China, which made the other buyer switch to Ukraine to fulfill their demand. Russia’s sunflower oil exports are projected to rise by 14.3% YoY to 4.59 mmt. The price war between Russia and Ukraine will continue to influence global sunflower oil trade

Ukraine

In W27, Ukraine's sunflower oil prices decreased by 1.06% WoW to USD 0.93/kg, bringing the cost to the same level as Russia's. The price decline can be attributed to reducing export demand and competition from other rival oils. Ukraine's sunflower oil exports surged in May-24 due to a supply shortage in Russia, which also led to surging sunflower seed prices. However, the price stabilized as the export demand went down in Jun-24.

Argentia

In W27, Argentina’s sunflower oil price remained stable at USD 0.97/kg, still the highest compared to prices in Russia and Ukraine. The ongoing price war between Russia and Ukraine has made global sunflower oil more attractive than palm and soybean oil, boosting global demand. However, Argentina's sunflower oil price is expected to receive support due to the rebounded global prices in May-24, driven by surging demand from the biofuel sector.

3.Actionable Recommendations

Enhancing Export Competitiveness

Enhancing trade relations with existing buyers and exploring new markets can mitigate risks posed by price wars with Russia through trade agreements and marketing campaigns highlighting the quality of Ukrainian sunflower oil. Improving export logistics and reducing bottlenecks will ensure timely and efficient delivery to international markets. Exploring the production and export of value-added products, such as refined and organic sunflower oil, can differentiate Ukrainian offerings and command higher prices.

Strengthening Market Presence

Targeting the rising global biofuel market by promoting sunflower oil as a viable feedstock will benefit Argentine producers. Focusing on cost-reduction strategies to make Argentine sunflower oil more price-competitive in the global market, including optimizing production processes and reducing logistical costs, will enhance competitiveness. Obtaining sustainability certifications for sunflower oil will appeal to environmentally conscious consumers and markets, potentially commanding premium prices.

Strategy for Biofuel Demand Surge

With increased biofuel demand driving up soybean oil prices, producers and exporters should focus on securing long-term contracts with biofuel companies to ensure stable demand and better pricing. Investing in robust storage and logistics solutions will help mitigate supply chain disruptions caused by events like hurricanes. Additionally, keeping an eye on global vegetable oil price indices, particularly for sunflower oil, can provide early warnings about shifts in demand and supply, allowing for better strategic planning.

Sources: UkrAgroConsult, Elevatorist, FAO,