Crude sunflower oil prices fell by $60/mt to $1,510/mt for March delivery (6 ports) compared to the same time last week.
Last week’s peak was caused by Russian attacks on Ukrainian logistics, which led to disruptions and panic. However, refineries covered part of the shortage and market sentiment began to cool, according to a Dutch-based paper broker.
Russian attacks on Ukrainian ports and energy infrastructure forced some exporters to shift to inland logistics, for example via Poland. In January, ports operated at 20% capacity for at least two weeks. When generators are bombed, it takes one to two weeks to procure and install replacements. Exports are continuing, but at a slower pace than usual.
Insurance is very expensive at around 4%, and shipments only move when there are no air-raid alarms. Some market participants are now shipping through Poland and Romania.
Between September and December, Ukraine produced 1.561 mmt of sunflower oil, compared with 1.858 mmt in the same period last year. Sunflower seed stocks in December stood at 7.558 mmt versus 8.445 mmt a year earlier.
The EU has imposed zero duties on Ukrainian sunflower products, while Turkey has introduced zero-duty import quotas for sunflower seed through May 2026, allocating 1 mmt for seeds. This intensifies competition for supply.
A price correction is possible with the arrival of a record Argentine crop (5.75 mmt) and higher Black Sea supply following delayed sales. Russian attacks on Ukrainian logistics and energy infrastructure could continue to cause volatility. Prices are likely to struggle to move significantly above current levels.
This article is part of a more comprehensive vegetable oil analysis. For the full analysis, visit: https://app.vespertool.com/market-analysis/2610
