Ukrainian sunflower oil prices rose following improved export conditions in May

Since Russia invaded Ukraine on the 24th of February 2022, the global sunflower oil supply has been constrained, as both countries account for over 70% of global sunflower oil exports. Sunflower oil exports from Ukraine have been limited so far in the 2022 calendar year (CY) due to blockages of ports in the Black Sea region arising from the ongoing conflict. Thus, in April, sunflower oil prices declined due to an oversupply in the domestic market because of reduced export capacity. The average Mintec Benchmark Prices (MBP) for Ukrainian sunflower oil fell to UAH 49,985/MT, down by 20% month-on-month (m-o-m) in April, after reaching a record high of UAH 77,844/MT on the 7th of March. However, after this decline, prices began to rise in May.

The Mintec Benchmark Prices for Ukrainian sunflower oil rose by 2.1% m-o-m and 21.2% year-on-year (y-o-y) to UAH 51,042/MT in May, attributable to improved export conditions for Ukrainian sunflower oil. While sunflower oil exports from the Black Sea region remain limited on damages to sea ports and infrastructures in Ukraine, supply from Ukraine is currently entering the market by land (rail and truck). Before the Russia-Ukraine war, most vegetable oil shipments were exported via the Black Sea, with only a small fraction supplied by rail, due to the significantly higher transport costs. European leaders agreed that efforts would be intensified to get more food out of Ukraine by land to improve food security. While global sunflower oil supply is likely to improve, increased demand and higher logistical costs will likely support sunflower oil prices.