For the Quarter Ending March 2024
North America
In Q1 2024, the Sunflower Oil market in North America experienced a significant decline in prices with mixed trajectory. The price rose considerably in January while plummet suddenly in February and rebounded steadily as march concludes the quarter.
Starting with January, the the notable rise in Sunflower Oil prices in January 2024 stems from increased downstream demand, driven by efforts to replenish inventories amid growing advocacy for biofuels sectors. Furthermore, in response to increased demand, market participants raised prices to boost profitability thereby selling the goods relatively at a higher cost than projected. Also, Geopolitical tensions and trade disruptions complicated market sentiment, causing export challenges and increased shipping costs. In February, prices sharply declined due to weaker trade quotations from neighbouring markets and a shift towards competitively priced products from other countries, especially in the European market. Furthermore, the FAO Food Price Index averaged 117.3 points in February, down 0.7 percent from January and 10.5 percent from the same month last year. The FAO Vegetable Oil Price Index decreased by 1.3 percent from January, standing 11 percent below its February 2023 value. International Sunflower oil prices notably dropped due to expectations of ample global export supplies.
Lastly, with march ending the quarter, prices rebounded modestly, driven by rising costs of other vegetable oils globally. However, merchants grappled with surplus Sunflower oil supply, sufficient to meet demand downstream. With this strategic price adjustments to maximize profits amidst a strong US dollar, concerns linger about potential price increases due to Mississippi River bottlenecks caused by weather conditions. Addressing potential delays and associated costs is crucial to avoiding trade disruptions and export delivery halts. As a result, market participants in the US have escalated inquiries to exporting nations, further amplifying the upward pressure on prices. In conclusion, The latest quarter-ending price for Crude Sunflower Oil FOB Houston in the USA was USD 840/MT.
Asia Pacific
The pricing environment for Sunflower Oil in the APAC region during Q1 2024 has experienced a downward trend, with prices declining by more than 1 percent compared to the previous quarter of the last year. However, there has been a slight increase in prices towards the end of the quarter. Initially until the middle of the Q1 the price demonstrated an overall downward trend. The decline stemmed from various factors, including reduced demand for vegetable oil, particularly in major markets like China, and an oversupply of Sunflower Oil. China’s significant imports of competing oils from Ukraine and Russia, coupled with lower exporting costs from these regions, also played a significant role. Ukrainian and Russian suppliers deliberately lowered prices, enabling Chinese market players to adjust their pricing strategies to stay competitive within the market. Furthermore, the Red Sea trade dispute has disrupted supply chains, causing delayed deliveries and port congestion, which affected Sunflower Oil (SFO) prices. Chinese buyers hesitated to procure SFO from affected regions due to higher freight costs despite lower trading prices.
Additionally, the strengthening US dollar made import opportunities more expensive for Chinese buyers, contributing to price fluctuations and a downturn in the market trajectory. However, as quarter progressed towards the end of the quarter, the sunflower oil market has displayed steady rise in its prices. This was supported by the prices rise in revival oils including the soybean and palm oil. Furthermore, with reduced freight costs and increased downstream consumption of Sunflower oil, traders in the region actively recoverd previous losses by selling off their inventories at higher prices, aided by the devaluation of the Yuan against the dollar. Overall, the pricing environment for Sunflower Oil in the APAC region during Q1 2024 has been challenging, marked by a downward trend influenced by weak demand, oversupply, currency fluctuations, and logistical challenges. Consequently, the quarter-ending price for Crude Sunflower Oil CFR Shanghai in China at the end of March was recorded at USD 893/MT.
Europe
The Sunflower Oil market in Europe experienced a challenging first quarter of 2024, with prices declining significantly. Several factors contributed to this downward trend. The global market conditions, including the decreasing prices of other edible oils such as palm and soybean oil, played a crucial role in the decline of Sunflower Oil prices. These oils serve as substitutes for Russian sunflower Oil, and their abundant availability put competitive pressure on Sunflower oil prices. Additionally, Reduced demand from key importers like India, China, and Turkey, alongside decreased biofuel consumption and weakened purchasing sentiment, led to a negative pricing environment for Sunflower Oil. Similarly in Ukraine, the largest producer in Europe, prices steadily declined from the previous quarter. Producers across the Black Sea region faced considerable pressure as prices for processed products sharply declined until February. This decline was attributed to light demand from major destinations, particularly in the Asia-Pacific (APAC) region. In response to these market dynamics, sellers have been compelled to adjust prices accordingly in order to be competitive within the market as prices from neighbouring nations such as Russia also declined.
However, as March commenced, Ukrainian Sunflower oil exports surged due to a modest regional consumption rebound and heightened interest from importers seeking cost-effective alternatives amid rising palm oil prices. Additionally, Egypt’s notable increase in Sunflower oil imports signals a potential shift in global vegetable oil consumption patterns, boosting demand and potentially impacting prices. The increased exports of oil to Egypt from Ukraine and Russia stand to benefit their respective economies as Euro devaluated against the dollar by 0.57 percent thereby benefitting the Ukraine and Russian trades to clear their stocks at max. profits. Overall,
In Q1 2024, Sunflower Oil prices in Russia and Ukraine saw a negative trend, declining consistently due to global market factors and weakened demand. Crude Sunflower Oil prices ended the quarter at USD 813/MT FOB Chornomorsk in Ukraine and USD 800/MT FOB Novorossiysk in Russia, reflecting the persistent downward trend.
