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According to the Central Bank report "Regional Economy" for October, sunflower prices from producers have risen due to deteriorating crop forecasts in central and southern regions of Russia, as well as increased demand from processors. Experts predict that the oilseed harvest will be 4-6% lower than last year's level, but higher than the average of the last five years. Sunflower collection is expected to be significantly lower than last year.
According to the report, farmers note a decrease in the yield and quality of sunflowers: the seeds are too small and contain less oil, especially in regions that faced frost and drought - the Central and Southern Russia, as noted by analysts from the Central Bank. In connection with this, sunflower producers are raising prices, as they have increased demand from processors.
According to analysts from the agency of Lilia Varygina, the company "OleoScope" does not expect further sharp price increases for sunflower. She notes that the sharp rise in oil prices due to reduced yields in the South caused a temporary price hike, which could lead to speculation in a growing market. The cost of sunflower should stabilize according to real demand, and the situation in the foreign market helps to set the oil price at just over $1,000 per ton FOB. Varygina also adds that the current market conditions have exhausted the price growth reserves, and storage losses due to deferred revenue will not be justified.
Varygina notes that the final cost will be influenced by raw material and harvest levels. The Ministry of Agriculture of Russia and the American agricultural department maintain their forecasts for sunflower harvest. Analyst Varygina also notes that according to "OleoScope" forecasts, sunflower production this year will be around 15.4 million tons excluding new territories. Sunflower harvesting is currently underway in the South of the country, in regions most affected by prolonged drought, therefore yield indicators are currently significantly lower than last year's, while there is no shortage of raw materials.
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