Sunflower oil prices have increased again, with crude sunflower oil for November-December delivery rising by $10/mt to $1360/mt at Ukrainian ports. The market has shifted to a more bullish stance compared to recent weeks, when a significant price correction was still anticipated.

Ukrainian crop estimates revised downward

Vesper’s partner APK-Inform reduced its forecast for the Ukrainian sunflower crop from 13.5 million metric tonnes (mmt) in September to 12.45 mmt in October. This latest estimate falls below last year’s harvest of 12.68 mmt. The forecast has been progressively lowered throughout the season, in July, APK-Inform had projected the crop at 14.5 mmt.

APK-Inform commented to Vesper: “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.”

Some analysts project even lower figures. Asap Agri estimates the Ukrainian crop could reach just 11.5 mmt, indicating potential room for further forecast reductions.

Processing activity in Ukraine also declined significantly in September, totaling only around 560,000 tons, the lowest level since July 2022.

Russian production outlook also weakening

The Russian sunflower crop forecast has also been revised downward on a weekly basis. Initially expected to reach 17.9 mmt this season (versus 16.6 mmt last year) excluding occupied territories, according to IKAR, the forecast has now been reduced to 17.75 mmt. Some sources estimate production could be even lower at 17.4-17.5 mmt.

Lower crops expected in EU and Turkey

Beyond the Black Sea region, other producing areas are facing reduced harvests. The EU crop is expected to reach approximately 8.6-8.7 mmt compared to 8.7 mmt last year. Turkey, a large importer of sunflower and sunflower oil, will also have a lower crop at 1.2 mmt versus 1.33 mmt last year.

The season is also starting with lower beginning stocks compared to the previous year, while import demand is expected to remain strong.

Market participants expect Q4 strength

Vesper interviewed 13 market participants from various companies, including buyers, sellers/producers, and Black Sea analytical agencies. All except one said they expect prices to remain strong or rise slightly in October and November, stay flat or slightly decrease in December, and weaken in Q1 due to the arrival of the Argentinian crop.

The forward curve reflects this market view, with November-December prices remaining well above January-February-March and April-May-June positions.

Vesper’s outlook: neutral to slightly bullish for the period under three months, and slightly bearish for the period beyond three months.

This analysis is part of a full market analysis on the global vegetable oils market. For the full analysis, go to: https://app.vespertool.com/market-analysis/2358?commodity=vegetable-oil