1. Weekly News

Bulgaria

Bulgaria's Sunflower Production Hit by Unfavorable Weather

Unfavorable climatic conditions in Jun-24 and Jul-24 have negatively impacted Bulgaria's sunflower production, resulting in low yields and smaller seed sizes. This has supported sunflower seeds and oil prices in the domestic market. However, competing oils, including soybean, rapeseed, and palm oil, will also influence prices. According to the chief analyst for the online agricultural platform AgroPortal, there is no reason to expect significant and lasting price increases for vegetable oils in the country except for the escalation of the war in the Middle East.

Russia

Russia's Sunflower Oil Exports Increased 27% YoY in the 2023/24 Season

Despite logistical problems and mutual settlement issues with critical buyers, Russia's sunflower oil exports are estimated to reach 5.2 million metric tons (mmt) in the 2023/24 season due to production issues in Ukraine, reflectings a 27% year-on-year (YoY) increase compared to 4.1 mmt in the 2022/23 season, solidifying Russia's position as the world’s second-largest sunflower oil supplier. Export prices ranged from USD 800 to USD 950 per metric ton (mt) during this period. However, Iran's temporary restriction on vegetable oil imports at the end of 2023 negatively affected the country's exports, leading to oil price reductions.

Spain

Increased Sunflower Oil Consumption in Spain

Spain's sunflower oil consumption has increased in 2024 due to competitive pricing. In the first half (H1) of 2024, consumers purchased 179 million liters (L) of sunflower oil, compared to 107 million L of olive oil. Despite olive oil being the most popular cooking oil in Spanish households — accounting for 62% of sales by volume in 2023 compared to sunflower oil's 34% — its consumption has declined in 2024 due to rising prices. Middle and upper-class households in Spain primarily consumed olive oil.In response to this trend, the Spanish government reduced the Value-Added Tax (VAT) on olive oil in Jun-24 to make it more affordable.

Ukraine

Ukraine's Sunflower Prices Remained Stable Despite Low Yield

Ukraine's dry and hot weather led to an early sunflower harvest in the 2024/25 season, with low yields and oil content. Despite this, processors have yet to raise prices, with newly-harvest sunflowers being offered at USD 456 to USD 480/mt. Global sunflower oil and meal prices are decreasing due to an oversupply of soybean meal and other rival oils. In addition, the European Commission (EC) has reduced its sunflower production forecast for the European Union (EU) due to unfavorable weather. Bulgaria and Hungary also see reductions in their production estimates.

2. Weekly Pricing

Weekly Sunflower Oil Pricing Top Producers (USD/kg)

Yearly Change in Sunflower Oil Pricing Top Producers (W34 2023 to W34 2024)

Russia

In W34, Russia's sunflower oil prices remained unchanged week-on-week (WoW) at USD 0.92 per kilogram (kg). However, the month-on-month (MoM) price decreased slightly by 1.08%, while the YoY price increased by 4.55%. Despite declining production forecasts for the 2024/25 season, Russia's sunflower oil market remained stable. The rising soybean and rapeseed oil supply has pressured global vegetable oil prices downwards, negatively affecting sunflower seed prices. Future pricing will largely depend on the worldwide demand dynamics and the price trends of competing oils.

Ukraine

In W34, sunflower oil prices in Ukraine remained steady at USD 0.94/kg due to ample supply. However, prices decreased by 1.05% MoM and increased by 5.62% YoY. Ukraine’s sunflower processing from Sep-23 to Jul-24 reached a four-year high of 14.4 mmt. The forecast for the total sunflower processing in the 2023/24 season was raised to 15.2 mmt in Aug-24, reflecting a 7% increase from the previous estimate in Jun-24 and a 9% YoY increase compared to the 2022/23 season. However, due to hot and dry weather the accelerated sunflower harvest in the 2024/25 season has led to lower yields, which may exert upward pressure on prices.

Argentina

Argentina's sunflower oil prices remained stable at USD 0.93/kg in W34. However, compared to the previous year, prices rose by 3.33%. Despite intense competition from soybean oil, Argentina's sunflower oil market remained stable, supported by robust biofuel demand. Additionally, global production challenges for the 2024/25 season due to climate change are expected to support prices. As a result, the country's sunflower oil prices are likely to remain resilient, influenced by global supply disruptions and local production dynamics.

3.Actionable Recommendations

Focus on Yield Improvement

With the forecasted decline in sunflower yields due to adverse weather conditions, Ukrainian producers should prioritize research and development to develop heat-resistant and drought-tolerant sunflower varieties, such as Helianthus annuus ‘Mammoth’, Helianthus annuus ‘Russian Mammoth’, and Helianthus annuus ‘Autumn Beauty’. Collaborating with agricultural research institutions and investing in advanced breeding programs can help create more resilient crops better suited to changing climatic conditions.

Monitor Market Dynamics

Bulgarian sunflower oil producers should closely monitor competing oil prices, such as soybean, rapeseed, and palm oil. Understanding global and regional price trends will help producers adjust their pricing strategies to remain competitive. Regular market analysis can provide valuable insights into price fluctuations and help make informed decisions regarding production and marketing.

Enhance Biofuel Integration

To leverage the stability of solid biofuel demand, Argentine sunflower oil producers should strengthen their integration with the biofuel sector. This involves investing in technologies that enhance the efficiency of biofuel production and exploring opportunities for collaboration with biofuel companies. By aligning production processes with biofuel requirements, producers can ensure a steady demand for sunflower oil and support price stability.

Sources: Tridge, Milk News, Agronews, Graintrade, Agroportal