Sunflower oil supply concerns intensify as major producers halt operations
The global sunflower oil market continues to face significant pressure as supply constraints tighten and production challenges mount across key producing regions.
Industry reports confirm that EFKO, one of Russia’s largest crushing operations, has temporarily suspended activities at two of its crushing plants due to negative profit margins. Market sources indicate this isn’t an isolated incident, with similar production halts reportedly occurring across Ukraine’s processing sector as well.
The primary driver behind these operational suspensions is the persistently high sunflower seed prices throughout the Black Sea region. A combination of poor harvest yields and reluctance among farmers to sell existing stocks has pushed seed prices to levels that have effectively eliminated crush margins for processors.
Market correction needed to restore production viability
Industry analysts suggest that current sunflower seed prices, hovering around $515 (EXW Russia) per metric ton, need to decrease substantially to approximately $450 per metric ton to restore operational viability for crushers. Without this price correction, there are growing concerns that production volumes could decline even further in the coming months.
The market is closely monitoring farmer planting intentions, with confirmation of sunflower planting areas expected within the next 1-2 months. Initial indications suggest farmers may increase sunflower acreage in response to current market conditions, which could eventually provide some relief to the strained supply situation.
For more detailed analysis and comprehensive market insights on the oils and fats sector, please refer to our full weekly report here: https://app.vespertool.com/market-analysis/1814
