Black Sea sunoil prices fall 15% past two months to 2.5 year lows

Sunflower oil prices in the Black Sea region have fallen by 15% over the past two months, reaching their lowest level in the last two and a half years, as bearish sentiment in the vegetable oil market puts pressure on prices and the crisis in the banking system puts additional pressure.

Prices for sunflower oil in the world's largest exporter have dipped on all delivery bases and Thursday, according to Agricensus monitoring data, they crossed the $1,000/mt threshold to stand at $990/mt CIF Turkey and $980/mt CIF Varna, landing in April.

Not so long ago, European buyers could not compete on price with Turkish buyers, as Turkish buyers' prices were on average 4.5% higher.

Spot bids for sunoil in Ukrainian ports fell $125/mt in the last two months to $900/mt CPT Thursday, its lowest level since end-October 2020.

In addition, according to analysts, Black Sea sunflower oil prices were feeling pressure from the fall in soybean oil futures and in European rapeseed oil values across the vegoil complex.

Regarding future price developments, market sources suggest that the downtrend will continue in the short term, as high stocks of sunflower oil in China and sufficient supply of European buyers, as well as the abolition of export duties in India will continue to put pressure on the market.

In addition, the month of Ramadan from March 22 to April 21 will also slow down demand.

In the long term, market sources suggest a recovery in prices under the influence of bullish factors.

A recovery in demand from Chinese and Indian buyers, a decline in soybean crops in Argentina due to drought, and developments in the palm oil market are among the main factors influencing this.

In addition, a gradual decrease in the production and supply of sunflower oil from Ukraine, due to the reduction in sunflower stocks, will support prices for sunflower oil in the future.

At the beginning of the 2022/23 season, Ukraine exported 2.92 million mt of sunflower oil, which is lower than last year's figure for the same period by an average of 13%.

Analysts of Ukrainian companies expect a decline in sunflower oil production by an average of 7.5% to 4.15-4.5 million mt, and exports by 5-9% to 4.6-4.8 million mt.