The Vesper West EU Forward Price Index for crude sunflower oil increased to €877 | $955 per metric ton (FOB 6Ports, FOSFA 52) on March 18, 2024, climbing from €868 | $950 per MT on March 11.

Multiple factors are driving the increase in sunflower oil prices. Firstly, rival oils are lending support: Global palm oil prices are increasing due to worries about supply and rising energy costs. Similarly, the soy complex is facing upward pressure, driven by short covering and reduced soybean production forecasts for Brazil by CONAB.

Black Sea brokers report that strong import demand from Turkey and India is further supporting sunflower oil prices. Turkey import sunflower oil vessel line up for Mar 1-16 2024 vs. Feb 1-16 2024 (mt): 112,249 vs. 89,525. In Feb 2023, India imported 297,000 mt of SFO vs. 220,000 mt in Jan, according to the Solvent Extractor’s Association of India.

Recent news of Russia’s attacks on Ukrainian ports, namely Odesa and Mykolaiv, is contributing to the price increase as Ukrainian shipments slow down in March while Russian exports increase.

Ukraine export sunflower oil vessel line up for Mar 1-13 2024 vs. Feb 1-13 2024 vs. Mar 1- 13 last MY (mt): 113,700 vs. 149,600 vs. 92,700.  Russia export sunflower oil vessel line up for Mar 1-13 2024 vs. Feb 1-13 2024 vs. Mar 1- 13 last MY (mt): 174,600 vs. 88,600 vs. 104,000 mt

In other news, ongoing protests in Poland, with border blockades extending into March, add to the market’s uncertainties.

Looking ahead, while the establishment of a new Ukrainian humanitarian corridor provides some relief to logistics, recent Russian attacks and transit issues through neighboring countries, particularly Poland, pose challenges. Additionally, Putin’s reelection signals continued geopolitical tensions in the Black Sea region, contributing to an increased upward risk in sunflower oil prices. Given these dynamics and the trends in other oils, our outlook is neutral – cautiously bullish.

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