Updated prices for sunflower oil: what you should know

Amid intensive supplies of sunflower oil to the European Union, prices in EU ports fell to a three-year low, but this did not lead to an increase in demand. Meanwhile, the prices for rapeseed oil exceeded the prices for sunflower oil for the first time due to the high demand for biofuels. It is reported by GrainTrade.

Restrictions on the activities of the Black Sea ports in Ukraine, tensions in the Black Sea and difficulties with alternative routes led to large supplies of sunflower oil to the EU at very low prices. However, this did not increase demand for the oil, as the EU market is already oversupplied.

Another consequence of the supply of cheap sunflower oil from Ukraine to the EU was a reduction in imports of soybean and palm oil. According to the European Commission, since July 2023, the imports of sunflower oil to the EU increased by 30% compared to the same period of the previous season to 1.6 mln tonnes, while the share of Ukraine's supplies in these imports increased from 89.7% in 2023 to 92.6% in 2024.

According to Agricensus, the prices for sunflower oil for delivery in Q2 2024 in six EU ports decreased from 845 €/t or 915 $/t to 831 €/t or 900 $/t FOB, the lowest level since September 2020, when the price was 855 $/t FOB.

Despite the low demand for sunflower oil caused by excessive supply, sunflower prices in the EU remain quite high. According to the FEDIOL Association, within 5 months of 2023/24 marketing year, the transshipment of sunflower in the EU increased by 9% compared to the previous season to 2.4 mln tonnes, in particular, in January the figure was the highest since October 2021 - 571 thsd tonnes.

According to USDA forecasts, in 2023/24 marketing year, the import of sunflower oil to the EU will reach the 10-year high of 2.35 mln tonnes.

Prices for rapeseed oil remain high despite the decline in sunflower oil prices. They are supported by stable demand from biodiesel producers, reduction of rapeseed processing in favor of soybeans, and restrictions on rapeseed sales by farmers.

According to FEDIOL, the average monthly volume of rapeseed processing in the EU from November to January reached almost a record 1.73-1.79 mln tons.

Rapeseed oil for delivery in March is offered at 890 €/t FOB Rotterdam, and in April - at 875 €/t FOB, while demand prices are 855 and 850 €/t, respectively, Agricensus reports.

Soybean oil has lost its value compared to other oils due to the active processing of soybeans for biodiesel in the United States. The volume of soybean processing in the EU in December-January reached the 5-month high of 1.17 mln tonnes. At the same time, soybean oil prices have fallen by more than 25% to 850 €/t FCA Hamburg since October 2023.