Prices for sunflower seeds and oil continue to rise, but analysts predict a change in the near future.

Last week, sunflower and oil prices continued to rise. In the European part of Russia, the purchase price of oil increased by 1-2 thousand rubles to 90.4-92.4 thousand rubles per ton in different regions, while the selling price rose by 1-3 thousand rubles, to 92-93.8 thousand rubles per ton, according to OilWorld portal data. Export offers for December stand at 1.12 thousand US dollars per ton (up by 5 dollars), with demand at 1.1 thousand dollars (up by 15 dollars). The purchase price of sunflower seeds increased by 2-3 thousand rubles to 40.1-41.1 thousand rubles per ton in different regions, while the selling price rose by 1-3 thousand rubles to 40.5-42.1 thousand rubles per ton.

According to the analytical company "ProZerno," last week the price of sunflower per ton averaged 44.125 thousand rubles (including VAT, up by 270 rubles per week). The General Director of "ProZerno," Vladimir Petrichenko, noted a slowing pace of price growth. He believes that if the ruble exchange rate were more stable, the price increase would have been insignificant. Due to the weakening of the ruble exchange rate, prices on export markets have remained at approximately the same level for the second week - 1120 US dollars per ton with slight variation, while domestically prices are at 105-108 thousand rubles per ton. Petrichenko also stated that the ruble price of oil is showing a slight upward trend, which would not have been observed with a stable ruble exchange rate.

Indeed, internal prices of sunflower and sunflower oil are at their highest levels. The head of the Fat-and-Oil Union, Mikhail Maltsev, confirms that oil prices are starting to decrease in line with global trends and the increase in export duty on sunflower oil. He also notes a decrease in export prices of sunflower oil in the Black Sea basin and European ports by 20-30 dollars per week, as well as a decrease in prices of rapeseed oil in China by 70 dollars over two weeks and soybean oil in India by 15 dollars per week.

According to Maltsev, at the beginning of the week, sunflower prices in Ukraine decreased for the first time since the beginning of the season. Ukrainian processors expect further price reductions for sunflower seeds and are stocking up for a short period of time. Maltsev also predicts a massive drop in vegetable oil prices in Russia.

However, Maltsev continues by stating that the price of sunflower domestically will decrease faster and more significantly. Along with the decline in global vegetable oil prices, the export duty on sunflower oil is increasing. It is projected that in January the duty will be around 15 thousand rubles per ton, and in February, after the revision of the duty determination procedure, it will increase to 23 thousand rubles per ton. Considering that the purchase of seeds occurs 1.5-2 months before the export of sunflower oil, the purchase prices for sunflowers may drop to below 37 thousand rubles per ton without VAT by the New Year.

According to analysts at OleoScope, domestic prices for sunflower oil still remain high, but they expect a change in trend soon due to global market changes. Over the past week, export prices in the Black Sea basin decreased by $50 per ton from 1.16 to 1.11 thousand dollars per ton, and contracts for delivery in December were fixed at a maximum price of about 1.255 thousand dollars per ton. Ukrainian analytical agencies also report a decrease in sunflower oil prices in European ports by 20-30 dollars per ton.

Analyst at OleoScope, Liliya Varygina, notes that the cost of other vegetable oils is decreasing. For example, December futures for soybean oil on the Chicago exchange fell by 5% over two sessions. Palm oil prices dropped by 1.3% over the week, and the price of CPO futures in December on the Chinese exchange reached a three-week low. An increase in export duty on sunflower oil is expected in December.

A source from "Agroinvestor" in the oilseed market reports that sunflower prices continue to rise. They claim that in the southern regions of Russia, some plants are buying sunflower at a price of around 50 thousand rubles per ton (including VAT), although most enterprises with a good raw material base do not purchase raw materials at this level. However, sunflower seeds continue to remain expensive, including in the Central Federal District. The situation is slightly better in the Volga region.

“Oil, of course, supports price growth, as does the exchange rate situation, but the main obstacle is the export duty in December. Processors expect a significant increase, let's say, up to 10 thousand rubles per ton, and believe that this will affect sunflower prices. However, in conditions of reduced raw material supply in the current season and strong competition for raw materials, the situation is unlikely to change drastically and quickly,” says the source from "Agroinvestor." However, he continues that a decrease in oil prices is currently observed in the global market, which could also affect the sunflower complex in Russia.