Early August

Dear ladies and gents,

Please enjoy a fresh overview of the food oil market.

Sunflower Oil and Seeds

In the 2023/24 FY, Ukrainian sunflower oil maintains a 40% share of the world market, while sunflower meal increased from 43% to 47%.

Meanwhile, the old season crop is over, and the new crop is unpriced. September may see good demand, and new season prices could be higher. Crushers are awaiting more market offers, and refineries haven't bought seeds in months. Moreover, old crop oil seed stocks are limited. The SFS harvest starts early, 3 weeks ahead of schedule, with initial yields typically low.

Experts agree that sunflower oil below $1000 FOB Black Sea is attractive, potentially reaching $1200 FOB by July-August. However, major crushers haven't operated for the past 2 months, disrupting supply. Local seed demand remains high, and refineries struggle to find oil at $950-$960. Consequently, the crush margin will be low when the season starts. Until December, oil demand looks strong due to seasonal bookings from the EU, India, and China.

In addition, sunflower seed production in Bulgaria fell by 16% to 1.78 million tons. As a result, Ukraine expects good demand from Bulgaria and Romania. Moldova reports 70-100% compromised maize crops and 60-80% sunflower crops in the south. Ukrainian prices continue to rise, with CPT levels at $940-$950, and Turkey offers crossing $1010 CIF Mersin. European sunflower oil prices have increased to $1140 FOB, with limited supply. Offers for October-December loading are at $1085/mt against $1070/mt bids.

Furthermore, China has bought the new crop sunflower oil from Russia at $1010 CIF. Meanwhile, sunflower oil in Turkey is priced at $990 against $960 CIF Mersin. Ukraine CSFO offers are limited, with refined oil prices rising from $1000 to $1030 FCA.

Rapeseed

The new vegetable oil season begins with the rapeseed harvest, estimated at 4 million mt. Ukraine exported 278k tons of rapeseed in July 2024, 15% higher than in 2023. Experts predict that July-August exports will exceed 600-700k tons. Currently, CPT offers for rapeseed are at $485/mt. On the other hand, rapeseed buying has halted for major crushers due to negative margins. Rapeseed prices should be lower than SFO. Rapeseed is at UAH 23,000 (~$560) right now, with farmers aiming for UAH 25,000 (~$610).

In addition, local Egyptian prices have risen. Egypt's oil price shot up, with regular soy crude supplies to the GCC. However, forward-sold oil from Ukraine is scarce. Old-season Russian markets traded around zero.

Soybeans

The soy sector is currently impacted by the USA and Asian finance markets crash. China, the major bean importer, is seeing increasing port stock.

Furthermore, crude oil prices, which are tied to bean oil used for biodiesel, are under pressure. CBOT dropped below $900 FOB, and Argentina's offer to India fell to $980. Black Sea soy oil offers are limited, with the new season starting mid-September.

Forward offers for beans in Ukraine remain uncertain, with non-GMO at $470. Russia has reported a record bean crop, increasing pressure on soy. Additionally, EU oilseed production is expected to decrease by 1.0% in 2024, primarily due to a decline in rapeseed, though increases in sunflower and soybean production slightly offset this.

That’s all the news for now. 

Thank you for your attention and stay tuned in for new updates!