Prices for sunflower oil at Ukrainian ports are climbing due to lower crop forecasts, according to a Vesper report.
Forecasts for the Russian sunflower oil crop have also declined, according to the 15 October report.
Crude sunflower oil prices at Ukraine’s ports for November-December delivery had increased by US$10/tonne to US$1,360/tonnes, the report said.
Vesper’s partner, APK-Inform, had reduced its forecast for the Ukrainian sunflower crop from 13.5M tonnes in September to 12.45M tonnes in October – down from 12.68M tonnes in the same period the previous year.
In July, APK-Inform had projected the crop at 14.5M tonnes and the forecast had been reduced throughout the season, Vesper wrote.
“The weather remains bad and harvesting is progressing very slowly. Quality is not great, and farmers are likely to hold sales. All these factors are pushing seed and sunflower oil prices up. We see mainly supportive factors for Q4,” APK-Inform told Vesper.
Some analysts had projected even lower figures, with analytics firm Asap Agri estimating the Ukrainian crop at 11.5M tonnes, indicating further forecast reductions were possible, the report said.
Processing activity in Ukraine had also declined significantly in September, totalling around 560,000 tonnes, the lowest level since July 2022, Vesper wrote.
The Russian sunflower crop forecast has also been revised downward on a weekly basis, according to the report.
Initially expected to reach 17.9M tonnes this season (compared to 16.6M tonnes last year) excluding occupied territories, the forecast had now been reduced to 17.75M tonnes, with some sources estimating production could be even lower at 17.4M-17.5M tonnes.
Beyond the Black Sea region, other producing areas were also facing reduced harvests, Vesper wrote.
The European Union (EU)’s crop was expected to reach approximately 8.6M-8.7M tonnes compared to 8.7M tonnes last year.
Turkey, a large importer of sunflower and sunflower oil, would also have a lower crop at 1.2M tonnes compared to 1.33M tonnes last year.
The season was also starting with lower beginning stocks compared to the previous year, while import demand was expected to remain strong, the report said.
In interviews with 13 market participants from various companies, including buyers, sellers/producers and Black Sea analytical agencies, Vesper said that all but one had said they expected prices to remain strong or rise slightly in October and November, stay flat or slightly decrease in December, and weaken in the first quarter due to the arrival of the Argentinian crop.
