Ukrainian Sunflower Oil Prices Rise by $60

Wholesale prices for Ukrainian sunflower oil have risen by $60–65/t

At the end of the current working week, prices for Ukrainian sunflower oil (for delivery in December–March to the market of six European ports) rose by $60–65/t. It is this market that has reacted most strongly to reports of the shutdown of Ukrainian oil extraction plants.

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Sergey Repetsky, a partner at Sunstone Brokers, spoke about this in a comment to Latifundist.com.

According to him, there was strong demand amongst traders. He attributes this reaction to the shutdown of, in his estimation, around 50 per cent of Ukraine’s sunflower processing capacity. However, the duration of the shutdown remains unknown. “This has not yet reached consumers in the physical market. We are likely to see a reaction on Monday or Tuesday, with demand emerging in the Italian and Spanish markets,” Repetsky predicts.

The situation in other key markets

Turkey has not responded with an increase in demand or oil prices. Turkish market operators are counting on an increase in supplies of Ukrainian sunflower seeds for their own processing. In particular, an offer of 40,000 tonnes appeared on the market on Friday, of which 21,000 tonnes were sold to Turkey at prices of $630–640/t (CIF depending on the port).

Against the backdrop of falling demand for Turkish refined oil, the broker expects that Turkey will import only 20,000–25,000 tonnes of crude oil per month in the near future. The remainder of its requirements until February will be met by local processing of imported sunflower seeds.

In India, trading activity has picked up, though there was no panic over the shutdown of Ukrainian plants. According to Repetsky’s assessment, Ukraine’s share of sunflower oil supplies to India currently does not exceed 15 per cent, and this volume can be replaced by Russian producers. Russian sellers were offering oil for delivery in December at $1,460/t and in January at $1,440/t. Buyers were quoting prices of $1,420–1,425/t; however, according to the broker, no deals were recorded. The Middle Eastern markets also showed little activity.

Repetskyy concluded that, so far, the shutdown of refineries has primarily affected prices on the domestic Ukrainian market and the market for six European ports.

“We have not seen any offers for oil from Ukraine — sellers are expecting prices to rise. I think that when prices on European markets rise next week, we will see offers from Ukraine,” the broker noted.

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