Sunflower Oil Prices Return to Pre-war levels On Higher Supply Yet Concerns Remain

November 25, 2022

1 mins read

The grain corridor deal’s resumption on 2nd November has led to an increased supply of sunflower oil to the open market. However, according to a Mintec source, “Sunflower quality is very poor, a lot is ruined due to bad weather conditions. I think around 20% will be bad quality, so much will go for industrial oil and not food production. There will be very few good-quality sunflowers. We can already see that the volumes of good sunflowers [which are not ruined] are priced at high premiums”.

According to the Ministry of Agrarian Policy and Food of Ukraine, as of 17th November, Ukrainian farmers had harvested 4.5 million (95%) hectares of sunflower seed area, and production volumes had reached 9.8 million metric tonnes, down 38% year-on-year (y-o-y). The average yield was reportedly around 2.17 tonnes per hectare, compared to 2.45 last year. Mintec sources report that lower-than-expected sunflower seed production will most likely lead to higher prices in the short term. Additionally, due to power outages in Ukraine resulting from the heavy Russian attack on Ukraine’s energy infrastructure, sunflower seed crushing in the oil mills has been slow. Thus, market participants expect there will be more sunflower seed exports rather than sunflower oil which in the coming weeks despite supply having improved could lead to additional shortages, particularly in the spot market.

Kyle Holland
Kyle Holland

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