Increasing Costs and Tight Supply Shape Russia’s Sunflower Oil Market in March 2025
Increasing Costs and Tight Supply Shape Russia’s Sunflower Oil Market in March 2025

Increasing Costs and Tight Supply Shape Russia’s Sunflower Oil Market in March 2025

  • 26-Mar-2025 8:00 PM
  • Journalist: Benjamin Franklin

The Russian sunflower oil market continued its upward trend in the first half of March 2025, after a steady price hike since the start of the year. Prices are likely to increase further in the second half of the month, as per Chem Analyst. The sustained price hike is mainly caused by a consistent supply-demand mismatch, which is further fueled by increasing production expenses and inflationary forces in the local market.

In February, the FAO Vegetable Oil Price Index rose to 156.0 points, up 2.0% from January and a significant 29.1% from the same time last year. This rise was brought about by a general upsurge in key vegetable oils like palm, rapeseed, soybean, and sunflower oils. In Russia, the market was also significantly impacted as forecasts showed a reduction in sunflower seed production for the 2024/25 marketing year, further limiting the constraints on supply availability. The combination of reduced output and increasing operational costs further added to financial pressures on producers, thereby continuing the trend in sunflower oil prices.

Building on the total price momentum, Russia's inflationary pressures picked up pace during February, resulting in increased cost of production and distribution. Since production were confronted with the issue of increased cost, the cost was passed on to customers, thus exerting constant upward pressure on the price of sunflower oil. Also, policy changes injected new dynamics into the market forces. The Russian Agriculture Ministry announced that the export duty imposed on sunflower oil would fall by 47.7% per ton in March. This move is likely to stimulate foreign demand and sustain elevated sunflower oil prices in the global market.

Market expected high demand from both domestic and overseas purchasers, with each contributing to the sustained trade volume growth. Russia's Manufacturing PMI picked up in February which shows a strong industrial activity. Such expanding manufacturing activity propelling the overall economic forecast and underpinning market mood. Suppliers reacted by adjusting their pricing strategy, taking advantage of the strong demand. Russia increased its exports of sunflower oil in the first half of the 2024/25 marketing year, with India and Turkey being the largest importers. India's proposal for hike in import duties on vegetable oils, added uncertainty to the equation, raising concerns about slowing speculative demand.

Despite such uncertainty, overall sunflower oil market direction continued to exhibit optimism, as prices maintained their growth in early March. The overriding trend suggested this momentum could extend into the second half of the month; specifically, as worldwide buyers respond positively to reduced export tariffs. With current supply constraints and steady demand in place, the Russian sunflower oil market stands ready to continue its positive trend in the short term.

Related News

Increasing Costs and Tight Supply Shape Russia Sunflower Oil Market in March 2025
  • 26-Mar-2025 8:00 PM
  • Journalist: Benjamin Franklin
Global Sunflower Oil Market Faces Supply Constraints and Price Hikes
  • 12-Feb-2025 3:15 PM
  • Journalist: Patrick Knight
Sunflower Oil Prices Tumble as Market Dynamics Shift in Black Sea Region
  • 19-Dec-2024 7:00 PM
  • Journalist: Alexander Hamilton
Bangladesh Exempts Edible Oils from Duties Taxes to Stabilize Prices Ahead
  • 17-Dec-2024 8:00 PM
  • Journalist: Alexander Pushkin

We use cookies to deliver the best possible experience on our website. To learn more, visit our Privacy Policy. By continuing to use this site or by closing this box, you consent to our use of cookies. More info.