Головна Analytics Oilseeds and processed products market (27.12.21‒07.01.22)

Oilseeds and processed products market (27.12.21‒07.01.22)

  • According to Agro Perspektyva, the export of sunflower from Ukraine for 11 months of 2021 amounted to 75.52 thousand tons with a total of $36.84 million worth against 153.68 thousand tons with $54.66 million for 11 months of 2020. Recall that the profitability of sunflower seed production in 2020 was 39.4%, in 2019 – 23.5%, in 2018 – 32.5%, in 2017 – 41.3%, and in 2016 – 63.0%;
  • Rapeseed prices on Paris-based EURONEXT hit another record high, while soybeans hit a 4-month high amid worries about a possible cut in South American yields due to rainfall shortages in Argentina and southern Brazil;
  • According to experts from S&P Global Platts, Brazilian soybean producers will receive record volumes in 2021/22 MY (142.8 million tons), which is likely to put pressure on the markets of their main competitors – the United States and Argentina. USDA analysts expect that soybean production in Brazil in 2021/22 MY will amount to 144 million tons against 138 million in 2020/21 MY;
  • Palm oil prices will remain high next year, according to a report from the Council of Palm Oil Producing Countries. This will be due to the fact that production remains limited due to the sharp rise in prices for mineral fertilizers and a lack of labor.

At the beginning of the new year, vegetable oils on the world market are becoming more expensive. One of the key factors behind this price movement is the rise in oil futures, while the relatively low demand from key importers is a powerful factor in restraining upward price trends.

The rise in oil prices is supported by news of dwindling stocks in the United States and information about a relatively mild disease from the Omicron strain.Palm oil futures have risen in recent weeks amid expectations for lower production in December due to harvest difficulties following floods in eight Malaysian states.

Sunflower oil of Ukrainian production rose in price, despite a decrease in demand from key importers. According to Ukroilprom, Ukraine during September-November reduced the export of sunflower oil compared to the same period last year by 15% to 1.35 million tons due to a drop in demand from China and India.

According to our price monitoring data, during the reporting period, mainly positive price adjustments were recorded on the domestic markets for key oilseeds and their derivatives. In the sunflower segment, prices grew moderately during the reporting week. On the EXW basis, sunflower seeds were traded within 8400-18800 UAH/t (+3.3%), while on the CPT enterprise basis within 18600-19000 UAH/t (+3.3%). The key driver of this movement is the rise in sunflower oil prices.

Sunflower oil of Ukrainian production on FOB basis in the Black Sea ports increased in price again and by the end of the reporting period was traded in the range of 1370-1385 $/t. As mentioned above, the current price trend is driven by the movement of oil prices and the rise in prices of other key vegetable oils.

At the same time, it is likely that the current situation will last no more than a few weeks, since key importers have accumulated significant domestic stocks, and the supply of new crop of soybeans and its processed products from South America in the near future will significantly affect the market balance.

The prices of soybeans on the domestic market were stable during the reporting week. On the EXW basis, they were traded in the range of 15500-15900 UAH/t. On CPT port terms, beans occupied the price range of 16300-16700 UAH/t.

In the rapeseed segment, prices were also mostly stable last week, holding strong positions on both domestic and export bases. On FOB terms, they fluctuated in the range of 765-775 $/t. It should be added that the value of the nearest futures contracts for rapeseed on the Euronext exchange almost daily resumes its historical maximum.


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