The Mintec Benchmark Prices [MBP] for Sunflower Oil FOB Northwest Europe (6 ports option) Rotterdam [Mintec Code: SFOR] was assessed at $1,254.50/mt on 8 December the lowest price seen since 20 July 2021. The decrease was driven by key buyers, such as India, favouring purchases of far cheaper palm oil over sunflower oil, thereby greatly reducing demand for the commodity.
A trader commented to Mintec, “Sunflower oil is lacking demand in a similar way to rapeseed oil. Many players panicked when the Russia-Ukraine war started and bought significant volumes of sunflower oil for 12 months or more. The problem now for the sunflower oil market is that these buyers need to use the material before they can think about buying more sunflower oil, or anything else for that matter. Also, supply isn't quite as bad as some were expecting it to be, even with the Russia/Ukraine conflict”.
Despite the issues within Ukraine and slower crushing rates year-on-year, other nations, such as Bulgaria, Romania and France, have increased their crush rates by circa 10%. The crush rate increase was due to large stocks of sunflower seeds, combined with the buying of Ukrainian sunflower seeds. This has meant that there is likely enough supply already in Europe to service the fuel and food sectors. Thus, prices could be pressured if European crushers do not need to buy more sunflower seed volumes in December, according to market players.
A sunflower oil bottler added, “Stocks are very high across the EU and it's hard to see fresh buying coming from there for some months yet. This is likely to mean that the regular EU demand isn't there to draw down stock levels. If the EU already has enough supply, it doesn't matter how much Ukraine or Russia has or doesn’t have. Unless prices sink further or palm oil prices move up, I can’t see where demand will come from”.
