End of August

Dear Ladies and Gentlemen,

Please enjoy a fresh overview of the food oil market carefully prepared for you. 

Sunflower Harvests and Seeds Prices

The sunflower harvest in Ukraine this year is expected to reach 13.7 million tons (14.2 million tons in 2023), with potential exports amounting to .25 million tons (~0.4 million tons in the current season). Of that, oil processing could account for nearly 13.6 million tons, slightly above this season’s mark of  13.5 million tons.

In Russia, this year’s sunflower harvest may decline by 6-8% year-on-year due to decreased yields in the South, where weather damaged the crops. The country’s seed market is currently at ₽35,000 (~$380) per metric ton.

Meanwhile, Romania is suffering the results of July’s heatwave, which destroyed up to 90% of many farmers’ crops. Consequently, sunflower seed prices in Romania have jumped up, reaching $460 per ton at the port of Constanța.

In Serbia, the sunflower harvest has started with yields lower than expected and an anticipated overall harvest decline of 10-30% compared to 2023. 

In Moldova, significant problems with seed quality have appeared upon harvests from some 6,000 hectares, leading to seed prices reaching $425 per metric ton. Trans Oil Moldova says that farmers are expecting a $500 price, but are currently unable to buy anything, producing only 300 tons per day.

On the other hand, in Bulgaria, prices have already reached $500.

Sunflower Oil – Global

The global sunflower crushing this year is forecasted at 48.7 million metric tons.

In Ukraine, farmers are still holding back on supplying seeds to the market, with prices reaching ₴19,500 (~$475) with VAT DAP and a minimum cash market offer of $370. This represents a record price since February 2022, with no farming sales occurring. Furthermore, the buying bid for Yuzhne is $920 CPT while the region is under income tax scrutiny, putting additional pressure on exports. As a result, refined oil offers surpass $1,000 FCA.

In the EU, sunflower oil prices are high, reaching $1,105 FOB vs $1,077.5 for FM, and $1,135 versus $1,080 for AMJ. Unfortunately, these high prices make the EU’s sunflower oil less competitive for export.

In India, sunflower oil prices have increased to $1,030-1,040 CIF. 

Chinese buyers have also become active, with bids for crude sunflower oil reaching $970 per metric ton. 

Meanwhile, in Turkey, the Mersin buying level has come to $990 per metric ton. 

Soybean

The soybean market is currently experiencing strong demand, particularly from China, with U.S. export sales bumping up the prices. Soybean prices in Chicago have risen, driven by short-covering and strong export momentum, as part of a broader commodity rally where funds are buying into soybean futures.

In Ukraine, there is a potential to harvest a record soybean crop of 5.7 million tons this year. With offers for non-GMO beans coming in at $410, GMO beans in the eastern part of Ukraine start at $310 without VAT. 

At the Polish border, some 1,500 metric tons were traded this week at €835 DAP Izov, indicating high demand. 

Argentina’s FOB price is $950 per metric ton. 

And over in Egypt, oil supply appears to be high compared to previous months, with local demand increasing.

General Market Trends and Future Outlook

The current market trend involves one vegetable oil supporting another, with soy oil supporting palm oil, and palm oil supporting sunflower oil. Fundamentally, there is no significant increase in demand, as buyers continue to wait for new season prices and are expecting discounts at the beginning of the season.

Looking ahead, the sunflower market situation has to stabilize in October, once half of the harvests are complete. Meanwhile, for soy oil, limited supply from Argentina is pushing prices up. As the new season begins, speculation is likely to increase, and buyers will need to decide whether to purchase or wait for potential discounts.

That’s all the news for now. As always, feel free to leave comments or questions. Thank you for your attention!