Sunflower oil prices in the Black Sea region have fallen by 15% over the past two months, hitting their lowest level in two-and-a-half years, AgriCensus reports.

The crisis in the banking system had put additional pressure on the sector, the 16 March report added.

According to AgriCensus monitoring data, prices for sunflower oil in the region have dipped on all delivery bases and, on the day of the report, fell below the US$1,000/tonne threshold to stand at US$990/tonne CIF Turkey and US$980/tonne CIF Varna, landing in April.

At one time, European buyers could not compete with Turkish buyers on price, as the latter’s prices were on average 4.5% higher, the report said.

Over the past two months, spot bids for sunflower oil in Ukrainian ports had dropped by US$125/tonne to US$900/tonne CPT, their lowest level since the end of October 2020, AgriCensus wrote.

According to analysts, Black Sea sunflower oil prices were also feeling pressure from the fall in soyabean oil futures and European rapeseed oil values across the vegetable oil complex.

Looking ahead, market sources expected the downtrend in prices to continue in the short term, due to high stocks of sunflower oil in China, sufficient supply of European buyers and the abolition of export duties in India continuing to put pressure on the market.

In addition, the month of Ramadan from 22 March to 21 April was also expected to slow down demand, the report said.

In the long term, market sources expected prices to increase due to a recovery in demand from Chinese and Indian buyers, a decline in soyabean crops in Argentina due to drought conditions and developments in the palm oil market.

A gradual decrease in the production and supply of sunflower oil from Ukraine, due to reduced sunflower stocks, was also expected to lead to higher sunflower oil prices.

At the beginning of the 2022/23 season, Ukraine exported 2.92M tonnes of sunflower oil, which was lower than last year’s volume for the same period by an average of 13%, AgriCensus wrote.

Analysts of Ukrainian companies expected a decline in sunflower oil production by an average of 7.5% to 4.15-4.5M tonnes, and exports by 5-9% to 4.6-4.8M tonnes, the report said.