1. Weekly News

Ukraine

Decreased Harvest Forecast Did Not Affect Prices in Ukraine

Ukraine’s sunflower seed production and oil supply in 2024 are forecasted to decline due to the effects of climate change. In addition, sunflower processing is also expected to decrease in the next two months due to low stocks. Despite the decline, sunflower seed and oil prices have not been impacted, as the market currently has an abundant supply of soybeans and their by-products

Kazakhstan

Sunflower Oil Production in Kazakhstan Increased by 31.5% YoY in Q1, 2024

Sunflower oil production in Kazakhstan reached 136.5 thousand metric tons (mt) in Q1-2024, increased by 31.4% year-over-year (YoY), compared to 103.9 thousand mt in 2023. A total of 83.7% of the production was supplied to the domestic market, while 16.3% was exported mainly to Uzbekistan, China, and Tajikistan. The average domestic selling price of sunflower oil in Kazakhstan was USD 1.22 per liter, fluctuating across regions, ranging from USD 1.22/liter to USD 1.99/liter.

United States

Vegetable Oil Price Index Reaches 13-Month High in Apr-24

The Vegetable Oil Price Index of the Food and Agriculture Organization (FAO) averaged 130.9 points in Apr-24, increasing by 0.3% (0.3 points) month-over-month (MoM) and reaching its highest level in 13 months. This rise in the index is attributed to higher sunflower and rapeseed oil prices, which more than offset slightly lower palm oil and soybean prices. The international prices for sunflower and rapeseed oil have been steadily increasing due to significant global import purchases and concerns about adverse weather conditions for winter oilseed rape in parts of Europe.

Global Oilseed Production Forecasted Reaching 687.1 mmt in 2024/25 Season

According to the United States Department of Agriculture (USDA), global oilseed production in the 2024/25 season is forecasted to increase by 28.9 million metric tons (mmt) to 687.1 mmt. This increase is mainly due to higher soybean production in South America and the United States (US). Sunflower seed and rapeseed production are projected to remain unchanged compared to the previous year, as higher production of sunflower seeds in the European Union (EU) and rapeseed in Canada and Australia is mostly offset by lower rapeseed production in the EU, Ukraine, India, and the United Kingdom (UK).

2. Weekly Pricing

Weekly Sunflower Oil Pricing Top Producers (USD/kg)

Yearly Change in Sunflower Oil Pricing Top Producers (W19 2023 to W19 2024)

Russia

The price of sunflower oil in Russia rose by 2.44% week-over-week (WoW), reaching USD 0.84 per kilogram (kg) in W19. This increase can be attributed to the growing prices of sunflower seeds. It is also fueled by the sustained high levels of imports globally and worries about adverse weather conditions affecting the growth of winter rapeseed crops in the EU.

Ukraine

In W19, Ukraine’s sunflower oil prices increased by 1.19% WoW to USD 0.85/kg. The increase is driven by growing sunflower seed prices and increased export prices. According to local analysts from the electronic grain exchange GrainTrade, the country’s sunflower seed prices increased by USD 7.5 to 12.5/mt to USD 417.5 to 425/mt with delivery to the plant in W19, which is the highest level since Mar-23.

Argentina

The sunflower oil price in Argentina increased to USD 0.86/kg, marking a 1.18% WoW rise in W19 due to solid exports and rising sunflower seed prices. Additionally, due to adverse weather, the United States Department of Agriculture (USDA) projects a decline in sunflower seed production for the 2024/25 season in Argentina. Despite lower production, sunflower exports are projected, with a significant portion of oil production destined for export

3. Other Outstanding Price Anomalies

Sunflower Oil Prices in Spain Dropped by 21.11% YoY Due to Supply Surplus

On May-24, the wholesale price of refined sunflower oil in Spain dropped by 21.11% YoY, amounting to USD 1.24/kg. Following a three-month consecutive decline from USD 1.57/kg in Jul-23, the price has stabilized since Oct-23.

The decrease in sunflower oil prices in Spain is primarily attributed to the surplus in global supply, especially from Russia and Ukraine. However, prices have begun to rebound since Mar-24 due to the decline in global inventories. Trading Economics, an application programming interface (API) states that sunflower oil prices have increased by 4.09% since the beginning of 2024. This, combined with recent price increases in major producing countries like Russia and Ukraine, suggests that prices in Spain are expected to rise in the short term.

4. Actionable Recommendation

Quality Control from Seed to Oil

Ensure strict quality control measures at every stage of the production process, from seed selection and cultivation to oil extraction and packaging. Maintaining high-quality standards is crucial for building customer trust and securing favorable trade deals. Due to the intense competition from palm oil and soybean oil, producers must guarantee superior quality to expand market share.

Monitor Supply and Demand Dynamics

Stay alert to global supply and demand dynamics, with a focus on key producing and consuming countries such as Russia, Argentina, and Ukraine. Keep an eye on production forecasts, trade policies, weather patterns, and market trends to anticipate potential disruptions, price fluctuations, and shifts in demand. It's important to develop risk management strategies, contingency plans, and market intelligence systems to respond promptly to changing market conditions and mitigate risks associated with oversupply, price volatility, and geopolitical uncertainties.