Late May

Dear Ladies and Gentlemen,

Please enjoy a fresh market update. 

Since the opening of the Ukrainian Grain Corridor in August 2023, around 1,600 vessels have exported 45M metric tons (MMT) of cargo from Big Odesa ports, with 67% being agri-food products.

Container movement is also on the rise. MSC has announced a ferry from Chernomorsk, while Maersk and CMA are operating from Chornomorsk and Danube. Experts foresee a promising outlook for container shipments from Odessa, with reduced logistics costs for 20-foot and 40-foot containers.

Meanwhile, Russian attacks on Odesa have targeted energy supply and port areas, raising concerns about the sufficiency of power supply in Ukraine. Experts predict a $50 increase in refined oil costs if current tariffs remain, posing challenges for producers as seed prices rise. Recently, we received a seed offer of UAH18,000 (approx. $453) with VAT in eastern Ukraine, Zaporizhzhia, marking a season record high.

Port CPT Ukraine acquired at $850-830, causing small and medium factories to halt operations until the market stabilizes. Medium and large factories may also end operations early due to seed shortages, electricity disruptions, and new workforce mobilization regulations.

MENA and Gulf countries are stockpiling oil, but weak summer demand and post-Ramadan stocks keep the demand low. Local prices are below the origin prices. Nonetheless, Ukraine’s sunflower oil market remains firm, driven by the EU demand. China and India anticipate supply drops in the next two months, with Chinese CSFO demands at $960+ and CRSO at $1,000+. Indian offers for Ukrainian CSFO are at $1,000 CIF, awaiting buyer confirmation.

Grain and sunflower seed prices in rubles have risen due to high demand from exporters and processors. Despite rainfalls in southern Russia, forecasts predict dry conditions. Oilseed prices remain high but lower than other origins. No export duty is expected in June or July. Russia's estimated vegetable oil exports for this year are at 2.48M tons, up 9% from last year. 

Meanwhile, APK-Inform reports that Ukraine's SFO exports in September-April 2023/24 MY surpassed 4.4M tons, 17% higher than the same period last season, and the second-highest in history.

South American floods and hot weather in Indonesia and Malaysia have influenced vegetable oil prices. Russian wheat crop deductions have also affected the prices. Looking at the stocks and carryover, as well as the hot weather, experts suggest waiting until mid-June before long booking booking. 

India's mustard seed production in 2023-24 is expected to hit 12M tons. Canada’s canola exports in 2023/24 are down 26% – to 5.1M tons. Ukraine's 2024 rapeseed production is forecasted at 4.3M tons – 7% lower than 2023, while 2024/25 MY exports are to be up 2% – to 3.6M tons.

We will continue monitoring market developments and provide updates accordingly.