Exports of sunflower oil from Russia have increased by 30% in the first two months of 2024, reaching over 850,000 tons.

In the first two months of 2024, sunflower oil exports from Russia increased by more than 30% compared to the same period last year, exceeding 850,000 tons, according to Mikhail Maltsev, the executive director of the Fat-and-Oil Union, in an interview with "Agroinvestor". He predicts that oil production will remain at a high level until the end of the season, with a monthly supply volume to the world market of approximately 500,000 tons. Global sunflower oil prices are at a low level. Sales from Ukraine are growing very rapidly with significant discounts, putting pressure on prices in the Black Sea region. The average export price in February was around $780 per ton, slightly lower than in January when it exceeded $800 per ton. Export duty on sunflower oil from Russia in March, as in the previous nine months, will remain at zero level, according to the Ministry of Agriculture. The duty on sunflower meal will decrease from 4321.3 rubles in February to 4227 rubles per ton. The indicative prices, based on which the duties are determined, are $776 per ton of oil ($794.3 in the previous month), and $237.9 per ton of meal ($249.7). According to the analytical company OilWorld, a reduction in sunflower processing is expected in Ukraine and Argentina in the second half of the season, which will lead to a decrease in export volumes. This could potentially support the market, but currently, sunflower oil is significantly undervalued compared to other oils, as noted by Maltsev. Kirill Lozovoy, an analyst at OleoScope, highlighted that global sunflower oil prices are low and have generally been declining throughout February due to oversupply of the product. Production volumes in Russia have reached new records, while sales from Ukraine are massive and with significant discounts. However, sunflower oil stocks in the Black Sea region remain high. In light of this, Russian exporters have decided to lower prices to $750-770 per ton by the end of last month. In the near term, the market may find support in the expected reduction in sunflower processing in Ukraine in the second half of the season, but currently, sunflower oil continues to be sold with substantial discounts compared to other oils, according to Lozovoy. The low cost may contribute to increased demand and partial liquidation of accumulated stocks. Since the beginning of the 2023/24 season, Russia has already exported over 1.8 million tons of sunflower oil worldwide, compared to 1.48 million tons in the same period last year. The main volumes were shipped to India (460,000 tons), China (395,000 tons), and Egypt (253,000 tons). Maltsev previously noted that over the past 20 years, Russia has taken second place in global trade of sunflower oil and meal, as well as rapeseed oil. It ranks fourth in the export volume of soybean oil and rapeseed meal, and ninth in soybean meal. Vladimir Petrichenko, the CEO of the analytical company ProZerno, pointed out that export duties in Russia create obstacles to the development of shipments of fat-and-oil products and raw materials. He mentioned that there are currently no mechanisms or conditions to stimulate exports, except for the temporary absence of duties on sunflower oil exports. Petrichenko also indicated that accelerating shipment rates at this stage could lead to increased duties. According to the expert, the imposition of duties is the main factor limiting the development of fat-and-oil product exports.