To understand the situation – a little bit of background. In February-March of this year, the Black Sea countries signed 14 contracts for the supply of sunflower from Argentina to the region for processing with a total volume of 565 thousand tons. According to traders’ estimates, about 400 thousand tons of this raw material should arrive in Bulgaria.
Within the framework of the “Argentine flow” of oilseeds to the Black Sea region, as Logos Press reported earlier, 55 thousand tons of sunflower from Argentina, belonging to the Trans Oil group of companies, were delivered to Romania on two ships. According to the representative of this group, the cargo of one ship – 27.5 thousand tons of raw materials – was envisaged for delivery to Moldova and processing at the enterprise of the mentioned group of companies in the free economic zone Giurgiulesti. Sunflower oil and sunflower meal obtained from this raw material should be fully exported. The cargo from the second vessel was to be delivered to the Trans Oil plant in Romania. There are no details about the realization of these plans at the moment.
But problems with the quality of Argentine sunflower, which arrived in Bulgarian ports on the first four ships, became known. In the process of laboratory tests of samples of this product, taken from its consignments totaling 160 thousand tons, a high content of pesticides was detected. In particular, the residual content of deltamethrin in the products was 2-5 times higher than the EU norm. This created a big problem – such raw materials and processed products cannot be included in the European trade turnover.
How the contradiction will be resolved
If the trend continues, then, according to expert forecasts, about 30-50% of the estimated volume of sunflower imports from Argentina to the Black Sea countries in the period before the arrival of local oilseed raw materials of the new harvest to the market may not meet European requirements. In this case, what can be the options for the development of the situation?
There are only two of them. The first – the cargo is redirected to markets outside the European Union. The second is that the problematic Argentine sunflower is used not in the food segment, but, for example, for the production of biodiesel.
“From a commercial point of view, the reduction of available supply of goods acts as a factor of price support,” says Yuri Rizha, an expert in agro-marketing. – If we take the average market price for sunflower in the region of about $450/t as a reference level, then a significant reduction in raw material supply, which market operators have already taken for granted, in the short term may lead to an upward adjustment of the price level by $10-30/t”.
Of course, the projected range of price correction is wide, but in fact it will depend on the elasticity of demand and availability of alternative supply of raw materials. Demand is likely to be there – at least because of the sharp rise in energy prices due to the ongoing war in the Middle East. But sufficient supply is not a certainty.
An additional factor supporting prices for oilseeds and vegetable oils is likely to be the uncertainty of the situation with the spring sowing campaign. Of course, the area under sunflower sowing for the crop-2026 in the Black Sea region is unlikely to be significantly reduced, even taking into account the great difficulties in providing agriculture with production resources in March of this year. However, there is and will be pressure on the market for this reason.
Near-term market prospects
According to expert estimates, every 10 thousand tons of imported sunflower “withdrawn” from the oilseed market of the Black Sea region due to non-compliance with EU regulations, increases demand and adds $0.5-1/t to the average regional price.
As this trend grows, the “demand price” for Moldovan sunflower, as Yuriy Rizha believes, will potentially be in the range of $460-480/t (delivery basis CPT). This is equivalent to a purchase price on the Moldovan market of around 8.5-9.0 lei/kg, depending on the exchange rate and logistics costs. Both are currently “highly variable”.
