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Trade4go
Jul 11th, 2025
Original content
Argentina is seeking to deepen trade ties with India, particularly focusing on expanding edible oil exports, including sunflower oil. While soybean oil accounts for 95% of Argentina's exports to India, shipments of sunflower oil have shown notable growth, positioning Argentina as a key supplier to the Indian market. The potential visit of India's Prime Minister is seen as a strategic opportunity to accelerate bilateral negotiations, including a proposed free trade agreement under Mercosur. If successful, tariff-free access could enhance Argentina's sunflower oil export potential, supporting price stability and stimulating production growth.
Sunflower crops in Bulgaria face heightened risk due to ongoing drought and extreme heat, which could lead to a sharp decline in yields during the critical pollination period. Despite these climatic challenges, Bulgarian sunflower hybrids, particularly drought-resistant varieties such as "Dara", continue to show resilience. Breeding efforts by the Dobrudzha Agricultural Institute remain focused on enhancing drought and parasite resistance. The domestic varieties remain competitive in both cost and performance, sustaining demand across Europe, where Bulgarian hybrids have previously occupied up to 50% of sunflower areas in France. If adverse weather conditions persist, reduced yields could support higher sunflower oil prices regionally and globally, particularly as Bulgaria is a key producer in Eastern Europe.
According to the United States Department of Agriculture's (USDA) latest estimates, the area sown with sunflower crops in the United States (US) for the 2025 harvest rose sharply by 37.5% year-on-year (YoY) to 401,000 hectares (ha). This significant expansion suggests a potential increase in domestic sunflower oil production, which could ease supply pressures and support price stability, particularly amid lower canola acreage and a declining soybean area. The rise in sunflower cultivation may also reflect strategic diversification in response to export challenges and shifting oilseed market dynamics.
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In W27, Russia's sunflower oil prices declined slightly by 0.89% week-on-week (WoW) to USD 1.11 per kilogram (kg), though they remain 19.35% higher YoY. The price adjustment coincides with a 33% reduction in Russia's export duty on sunflower oil, effective July 1, 2025, now set at USD 60.37 per metric ton (mt). This policy shift aims to improve the global competitiveness of Russian sunflower oil by lowering export costs.
If the export volume increases as anticipated, this could place downward pressure on international sunflower oil prices, especially in key import markets. However, the current domestic price softening may be temporary, as international demand and trade flows respond to the new duty regime. Market participants should monitor export data and port activity in the coming weeks for indications of supply shifts.
In W27, Ukraine’s sunflower oil prices declined slightly by 0.88% WoW to USD 1.12/kg, yet remained up 20.43% YoY from USD 0.93/kg. This marginal weekly dip follows recent fluctuations influenced by foreign exchange movements and strengthening port prices for sunflower oil. Weeks prior, Ukraine's sunflower prices fell in anticipation of the new harvest, with processors' purchase prices for old-harvest sunflower ranging between USD 603.69 to 618.06/mt (UAH 25,200 and 25,800/mt). More recently, purchase prices have increased modestly to USD 618.06 to 632.44/mt (UAH 25,800 to 26,400/mt) Carriage Paid To (CPT), although demand prices started from USD 598.90/mt (UAH 25,000/mt) CPT. Trading activity has remained stable, but ongoing volatility is expected due to weakening prices in the broader oil sector.
Crop conditions in southern Ukraine, particularly in the Mykolaiv region, remain a concern. Severe drought and high temperatures have critically damaged sunflower fields, with some farmers anticipating significant yield losses or complete crop failure. This agricultural stress could tighten future sunflower seed supply, potentially driving prices upward if adverse weather persists.
Argentina's sunflower oil prices increased by 0.92% WoW to USD 1.10/kg in W27, representing a rise of 13.40% YoY from USD 0.97/kg. The recent price uptick reflects improved supply following the harvest, while overall availability remains limited due to reduced processing capacity caused by delays from a major crusher shutdown.
Despite weaker global demand amid economic uncertainties, prices are supported by structural challenges, including high logistics and input costs, as well as previous weather-related disruptions. The 2024/25 campaign set a record with 4.7 million metric tons (mmt) of sunflower production, driven by expanded cultivation and improved technologies. Strong export demand, particularly from India, underpins a positive outlook. However, the presence of a significant yield gap indicates room for further growth that could influence future price trends.
Stakeholders in Argentina and Mercosur should prioritize advancing free trade agreements with India to secure tariff-free access for sunflower oil exports. This would strengthen Argentina's position in a key growth market, increase export volumes, and help stabilize global prices amid rising demand.
Producers and traders should closely track climatic developments in Eastern Europe, particularly drought impacts in Bulgaria and Ukraine, which threaten yields and supply. Promoting drought-resistant hybrids and diversifying growing regions, including capitalizing on the significant US acreage expansion, can mitigate supply volatility and support stable market conditions.
To convert record sunflower harvests into increased exportable supply, Argentina and other major producers should invest in expanding crushing facilities and improving logistics networks. Addressing current bottlenecks caused by processing shutdowns and high transport costs will support supply chain efficiency and price competitiveness.
Sources: Tridge, Agri, Ukr AgroConsult, Super Agronom, Spec Agro, Data Portuaria
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