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Trade4go
Mar 28th, 2025
Original content
Brazil’s government has reduced the import tax to zero on 11 food products–including sunflower oil– as part of an effort to ease inflation and improve food security. Taking effect immediately, this measure aims to reduce consumer costs and increase the availability of essential items. In addition to sunflower oil, other products benefiting from the tariff reduction include olive oil, palm oil, meat, and sugar. This initiative is expected to stabilize prices, support domestic industries, enhance access to essential goods, improve purchasing power, and mitigate inflationary pressures.
Kazakhstan's production of unrefined sunflower oil reached 272 thousand metric tons (mt) in the first six months of the 2024/25 marketing year (MY), a 12% increase from the previous season and a record for this period, according to the National Association of Oilseed Processors (NAPMC). Refined sunflower oil production rose by 18% to 83.2 thousand mt. Rapeseed and soybean oils output also grew significantly, increasing by 83% and 160%, respectively. This growth reflects a shift from wheat to oilseed cultivation, with sown areas rising by 34% between 2021 and 2024 and further expansion expected in 2025. Strong domestic and international demand for oilseeds and high-protein by-products, essential for poultry and livestock farming, is expected to sustain production growth, potentially increasing sunflower oil supply and stabilizing prices in regional markets.
Türkiye’s State Grain Board (TMO) has purchased 18,000 mt of unrefined sunflower oil in its first auction for this commodity in two years. Aves, a Turkish conglomerate specializing in vegetable oil production, won the auction, securing contracts to deliver 12,000 mt to Tekirdağ, Mersin, or Iskenderun at prices ranging from USD 1,195 to USD 1,209/mt Cost and Freight (CFR). Yayla Agro Gıda, a Turkish company specializing in the production and distribution of food products, will supply the remaining 6,000 mt to Mersin or Iskenderun at USD 1,208.90/mt CFR. These prices are higher than the USD 1,159 to USD 1,173.80/mt range from Türkiye’s Feb-23 auction and Egypt’s Sep-23 purchase at USD 1,045 to USD 1,047/mt Cost, Insurance and Freight (CIF). Delivery is scheduled between April 2 and 21, 2025. This price increase may signal rising demand or tighter supply in the regional sunflower oil market.
Due to strong global demand, Ukrainian farmers are advancing with the sowing campaign, prioritizing sunflower, soybeans, and corn. Sunflower remains a key crop amid the global vegetable oil shortage, reinforcing Ukraine’s position as a leading oil supplier. However, farmers in war-affected regions face challenges due to equipment shortages and high input costs, which could reduce yields. Despite these difficulties, efforts to shorten supply chains aim to stabilize domestic food prices and ensure food security. This situation may impact sunflower oil production volumes and prices, particularly in the European market.
In W12, Russia's sunflower oil prices rose to USD 1.12 per kilogram (kg), reflecting a 0.90% weekly increase and a 34.94% year-on-year (YoY) rise. This price surge is largely driven by robust demand from key importing countries like India and Türkiye, which has led to a 26% increase in exports for the 2024/25 season. However, adverse weather conditions, particularly drought, have reduced local and global sunflower oil production, resulting in lower-than-expected harvests and tighter supply. Although profitability for sunflower cultivation remains strong at 60%, concerns over a potential reduction in acreage for 2025 could further strain supply, potentially maintaining upward pressure on prices in both domestic and international markets., Compounded by fluctuating exchange rates, the ongoing supply constraints suggest that sunflower oil prices may continue to face upward pressure in the near term.
Ukraine's sunflower oil prices rose to USD 1.16/kg in W12, reflecting a 1.75% week-on-week (WoW) rise and a 39.76% YoY increase. This rise is driven by higher sunflower seed prices, which increased by USD 4.80 to 11.99/mt (UAH 200 to 500/mt), reaching USD 623.50 to 654.67/mt (UAH 26,000 to 27,300/mt) Carriage Paid To (CPT). Despite this, processors remain cautious due to limited raw material availability, which restricts oilseed processing to historically low levels. This reduced processing capacity constrains sunflower oil exports, potentially sustaining or increasing prices in the near term. If supply remains tight, further upward pressure on global sunflower oil prices may continue, particularly impacting European markets reliant on Ukrainian exports.
In W12, Argentina's sunflower oil prices fell to USD 1.09/kg, reflecting a 0.91% WoW decrease, though still up 28.24% compared to the previous year. The decline is due to a seasonal increase in domestic sunflower oil output, which temporarily alleviated price pressure. However, the yearly rise is driven by tightening local supply, robust global demand, and ongoing international shortages. Furthermore, the expected 10% global reduction in sunflower oil production for the 2024/25 season is likely to sustain upward pressure on Argentina's prices. This combination of factors suggests that, despite short-term price relief, Argentina's sunflower oil market may continue to face upward price pressure in the medium term.
Given the fluctuating sunflower oil production in key exporting countries such as Ukraine, Russia, and Argentina, businesses should expand their sourcing strategies to include multiple regions. As Ukraine faces processing limitations and weather-related challenges, and Argentina's supply remains tight despite short-term relief, relying solely on one market could increase price volatility. Establishing long-term contracts with suppliers from emerging markets like Kazakhstan, where sunflower oil production is growing, will help reduce exposure to regional disruptions and ensure a more stable supply.
With Brazil's recent decision to reduce import taxes on sunflower oil to zero, businesses in both importing and exporting regions should closely monitor these changes. This policy shift may lower costs in Brazil and increase demand for imported sunflower oil, affecting global pricing dynamics. Companies should stay informed about similar tariff adjustments or government actions in other major importing countries, such as Türkiye and India, to adapt their pricing strategies and optimize supply chain management accordingly.
Sources: Tridge, SINOR, UkrAgroConsult, Super Agronom, Agro Sektor, Oleo Revista
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