1. Weekly News

Russia

Declined Sunflower Oil Supply Forecast in MY 2024/25

The 2024/25 marketing year (MY) is expected to see a decline in global sunflower oil supply due to decreased sunflower seed production in Russia and Ukraine. In particular, sunflower seed production in Ukraine is projected to decrease from 14.6 million metric tons (mmt) in MY 2023/24 to approximately 14 mmt in MY 2024/25. Similarly, Russia's production is expected to fall from 17.44 mmt in MY 2023/24 to 17.03 mmt in MY 2024/25. In addition, the global oilseeds supply is forecasted to be 60.55 mmt in MY 2024/25, down from 61.57 mmt in MY 2023/24.

Russian Scientists Develop Sulfur-Containing Fertilizer to Boost Sunflower Yields

Russian scientists have created a sulfur-containing fertilizer that can increase sunflower yields by nearly 1.5 times. Field tests in Tatarstan showed that applying sulfur bentonite at 150 kilograms per hectare (kg/ha) increased the seed weight per sunflower basket by 43%. This fertilizer enhances yields and improves product quality by supporting chlorophyll formation, nitrogen and carbohydrate metabolism, and stress resistance.

Egypt

Egypt Purchased 5.5 thousand mt of Sunflower Oil in an International Auction

Egypt's General Raw Materials Supply Agency (GASC) secured 22.5 thousand mt of vegetable oils in an international auction, falling short of the planned 40 thousand mt. This included 5.5 thousand mt of crude sunflower oil, compared to the planned 10 thousand mt. Mahsul Trading won with a bid of USD 1,073.9/mt Cost, Insurance, and Freight (CIF). In the previous auction, Egypt purchased 73 thousand mt of crude sunflower oil at USD 1,000/mt (CIF). Payment for the current quantities will be immediate, unlike the previous auction, where payments were made within 180 days.

Ukraine

Ukraine's Sunflower Oil Exports Reach Record High in May-24

In May-24, Ukraine achieved a 14% month-on-month (MoM) increase in sunflower oil exports, reaching 714 thousand mt, the highest monthly volume since Jan-21. This makes it the third-largest monthly shipment in the country's history. In addition, the accumulative exports from Sep-23 to May-24 reached a record of 5.14 mmt. The high demand for sunflower oil can be due to competitive pricing compared to other vegetable oils and the stable operation of Ukrainian ports. The European Union (EU) continues to be the primary market for Ukrainian sunflower oil, with a 60% market share. Despite an anticipated decrease in processing and supply from Jun-24 to Aug-24, the EU remains optimistic about the potential increase in Ukraine's sunflower production for the 2024/25 season.

Ukrainian Sunflower Oil Prices Reach Record High

Since early Mar-24, the price of sunflower oil in the Ukrainian export market has been steadily rising, hitting a record high of USD 900/mt on June 12, 2024. This marks an increase of USD 5 to 15/mt from the previous week and represents a significant peak for the 2023/24 season, a level not seen since Mar-23.

2. Weekly Pricing

Weekly Sunflower Oil Pricing Top Producers (USD/kg)

Yearly Change in Sunflower Oil Pricing Top Producers (W24 2023 to W24 2024)

Russia

In W24, sunflower oil prices in Russia increased by 3.26% week-on-week (WoW), reaching USD 0.95 per kilogram (kg) compared to USD 0.92/kg in W23. This marks the third consecutive week of growth, supported by intense demand from the export market and decreased production forecasts for the 2024/25 season. Exports are expected to remain robust with competitive prices compared to other vegetable oils.

Ukraine

In W24, Ukraine's sunflower oil prices increased by 4.2% WoW to USD 0.97/kg. The strong export demand for sunflower oil led to a rise in sunflower seed prices in the country. In May-24, Ukraine’s sunflower oil exports increased by 14% MoM, reaching 714 thousand mt, the highest monthly volume since Jan-21 and the third-largest monthly shipment in the country's history. Additionally, Ukraine achieved a record-high sunflower oil export price of USD 900/mt on June 12, 2024, underscoring promising market prospects.

Argentia

Sunflower oil prices in Argentina increased by 1.05% WoW to USD 0.96/kg in W24, compared to USD 0.95/kg in W23. This increase aligns with global trends. The International Grain Council reports that global sunflower production is expected to dip slightly to 57.1 mmt in the 2024/25 season, down from the previous year's production of 57.4 mmt. This decline in production is due to a reduction in the acreage dedicated to the crop, despite higher yields

3.Actionable Recommendations

Monitor and Respond to Market Trends

Regularly monitoring global market trends and consumer preferences can provide insights for strategic decision-making. Understanding price fluctuations, demand-supply dynamics, and regulatory changes in key markets will enable producers to adapt their strategies proactively. Utilizing market intelligence tools and engaging with industry associations can facilitate informed decision-making.

Mitigate Price Volatility Risks

Developing hedging strategies and risk management tools can help mitigate price volatility risks associated with fluctuations in global commodity markets. Collaborating with financial institutions to access risk management products and futures markets can provide revenue stability and minimize financial uncertainties.

Strengthen Supply Chain Resilience

Given the volatility in production due to weather conditions, maintaining a resilient supply chain is crucial. Improving transportation infrastructure, storage facilities, and logistics management can streamline operations and ensure the timely delivery of sunflower oil to international markets. Collaborating with logistics providers to optimize routes and reduce costs can enhance efficiency.

Sources: AgroPortal, Sinor, OilWorld, Agri, Agropolit