The Sunflower and Sunflower Oil market in Ukraine experienced an unprecedented price surge, with purchase prices reaching staggering new levels during May 2024. This striking development was reported by the agricultural industry and various market experts.

The escalating costs can be attributed to several factors, including seasonal stockouts and constrained supply, which have led most mills to raise their oil prices. Additionally, the weakening of the Ukrainian hryvnia against the U.S. dollar played a crucial role in driving prices upward, according to industry experts.

At the core of this price hike was a significant shortage of supply from Sunflower producers across the nation. This scarcity created an upward spiral in purchase prices as buyers competed for the limited available stock. The impact extended beyond domestic markets, with export prices for Sunflower Oil and meal products also increasing.

On the export front, Sunflower Oil prices rose significantly for deliveries to Black Sea ports, despite reduced demand from India and stable global palm oil prices. Soybean oil, a close substitute, also experienced a price increase, influencing broader market dynamics.

The Sunflower meal sector was not insulated either, with higher prices recorded for both granulated and non-granulated meal products bound for Black Sea ports. Rising feed grain costs were a driving force behind the meal price surge.

According to data from market experts, the average price for Sunflower Oil delivered to domestic buyers remained stable yet on the upper side from the past month, similar to the price rise witnessed in other vegetable oils including soybean oil. These international price movements compounded the strain on the Ukrainian market affecting the market sentiments for Sunflower Oil as well.

Despite the challenges, there was a glimmer of hope on the production front. Ukraine had already sown nearly around 4.6 million hectares of the projected by about more than 5 million hectares planned for Sunflower cultivation that season, surpassing the previous year's pace. Favorable weather conditions proved a boon, fostering optimism about future harvests.

As per the market experts, the National Sunflower Oil Association revealed that Sunflower Oil exports surpassed pre-war levels. In the 2023/24 marketing year, Sunflower Oil exports rose by around of more than 17% to approx. 4.4 million tons, while at the same time, Sunflower meal exports climbed by approx. more than 27% to nearly around 3.5 million tons. Conversely, raw Sunflower seed exports plummeted by about more than 83% to nearly 289.6 thousand tons, indicating a strategic shift towards value-added processing within Ukraine.

The U.S. Department of Agriculture projected that Ukraine would produce 6.1 million tons of Sunflower Oil that year, bolstered by the reduced seed exports and enhanced domestic processing capabilities.

As the Sunflower industry navigated these turbulent times, its resilience and ability to adapt were put to the test. With optimistic sowing figures, robust export growth, and a commitment to value addition, as per the Chem Analyst, Ukraine's Sunflower Oil market is further likely to remain affected in the near future with a perfect storm emerging from supply-demand imbalances.