Sunflower oil prices jumped to $1,420/mt in early January, marking their highest level since the Russia-Ukraine war began in 2022. The sharp increase from $1,355/mt just a week earlier reflects mounting supply concerns from damaged Ukrainian production facilities and limited Russian export activity during extended holidays.

Two major crushing facilities in Ukraine suffered damage from Russian airstrikes over recent weeks. Bunge Dnipro and a Kernel facility in Odessa Oblast, both operated by large-scale producers, were hit, disrupting processing capacity in the region. Port operations in Odessa also faced logistical challenges due to the ongoing conflict.

Meanwhile, Russia’s official holiday period from December 31 through January 11 has kept export activity subdued, further tightening available supplies in the global market.

The supply constraints have prompted increased buying activity from major importers. India’s sunflower oil imports more than doubled in December to 350,000 mt, reaching a 17-month high. Overall edible oil imports to India climbed 19% month-on-month to 1.37 million mt, according to Reuters.

This year’s sunflower crop has also disappointed, adding to the supply-side pressures. The combination of damaged Ukrainian facilities, extended Russian holidays, and a weaker harvest has pushed prices to levels not seen since the early months of the 2022 conflict.

Russia-Ukraine peace negotiations have shown limited progress, leaving uncertainty around production and export outlooks in both major sunflower oil producing regions.

Market outlook

Industry participants expect sunflower oil prices to ease in the first quarter with the arrival of Argentina’s record-strong crop. Russian exporters are scheduled to return from holidays on January 12, which should increase export activity.

The impact of recent strikes on Ukrainian facilities is expected to fade over time, potentially helping prices soften in Q1.

However, sunflower oil prices are likely to remain above last year’s levels throughout 2025. Support is expected from a poor sunflower harvest this season, potentially slower palm oil production in Indonesia and Malaysia, and lower expected soybean oil exports.

For the full market analysis, visit: https://app.vespertool.com/market-analysis/2566.