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Trade4go
Mar 7th, 2025
Original content
Bulgaria’s sunflower oil sector faces severe disruptions as a poor 2024 harvest and restrictions on Ukrainian imports lead to factory closures and supply shortages. With processors requiring 1.5 million tons of sunflower seeds annually but domestic production falling short, the industry warns of inevitable price hikes. The crisis echoes 2022, when war-driven supply disruptions caused sunflower oil prices to surge. Bulgaria, a major exporter to India, South Africa, China, and other markets, risks losing competitiveness.
The European Union’s (EU) sunflower oil imports fell to 1.24 million tons in Q1 of the 2024/25 season (Oct-24 to Dec-24), down from 1.51 million tons a year earlier but still above 2022/23 levels. Ukraine remains the primary supplier, providing 94% of total imports, though its export volumes have declined due to limited sunflower seed availability. Meanwhile, sunflower oil prices in European ports have dropped to a three-and-a-half-year low of USD 915/ton FOB, reflecting market oversupply despite high seed costs. Demand within the EU remains stagnant, contributing to reduced soybean and palm oil imports, while total sunflower oil imports from Ukraine since Jul-23 have risen by nearly 30% to 1.6 million tons.
Russian scientists have developed a unique high-stearic sunflower hybrid named "Stearin" at the V.S. Pustovoit All-Russian Research Institute of Oilseeds. This hybrid produces oil with a high content of stearic acid, making it a beneficial alternative to palm oil. It can be used in both the food and cosmetics industries, with the potential to become a valuable export product. The hybrid offers strong technical characteristics, including high yield and oil content, and is resistant to several types of pests and diseases. The oil contains 75% oleic acid, which extends shelf life, and 13% stearic acid, allowing it to solidify at lower temperatures. This development is expected to reduce Russia’s reliance on palm oil imports and increase sunflower oil exports.
In the first seven months of the 2024/25 agricultural season, Ukraine’s grain and oilseed export revenues increased by 13.5% year-on-year (YoY) to USD 11 billion. Sunflower exports dropped 61% to USD 22 million, and sunflower oil revenues declined 2.7% to USD 2.7 billion, with overall vegetable oil and meal exports also decreasing.
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In W9, the price of sunflower oil in Russia remained stable at USD 1.09 per kilogram (kg), showing no change week-on-week (WoW). Despite a decrease of RUB 5/kg, the price in USD held steady. When compared month-no-month (MoM), prices saw a 2.83% increase, while YoY, prices rose by 39.74%. The upward price trend can be attributed to a combination of factors. Strong demand, notably from India and Turkey, has led to a 26% increase in sunflower oil exports in the first five months of the 2024/25 season, contributing significantly to price hikes. Additionally, drought-induced reductions in both local and global supply have further strained availability, driving prices higher. These factors combined have kept prices on an upward trajectory despite some fluctuations in the exchange rate.
Sunflower oil prices in Ukraine rose to USD 1.15/kg in W9, reflecting a 0.88% WoW, 3.60% MoM, and 45.57% YoY increase. The surge is driven by higher port prices and intense competition for raw materials, with farmers withholding sales in anticipation of further gains, though those needing cash flow continued selling. Limited supply has restricted stockpiling, keeping exports moderate. Rising procurement costs for sunflower seeds, along with increasing meal and feed grain prices, have further fueled price growth, sustaining the market’s upward trend.
Sunflower oil prices in Argentina remained stable at USD 1.10/kg in W9, showing no WoW change but rising by 1.85% MoM and 35.80% YoY. The price increase is primarily fueled by a tightening domestic supply and strong global demand, further intensified by ongoing shortages in the international market. Additionally, a projected 10% decline in global sunflower oil production compared to the 2023/24 season is adding upward pressure, sustaining price growth in Argentina’s sunflower oil sector.
The projected 10% decline in global sunflower oil production for MY 2024/25 underscores the need for long-term supply planning. Governments and industry stakeholders should consider policies to support domestic oilseed production, including subsidies for farmers and incentives for alternative edible oil imports. Processors should also explore oil blending strategies with soybean and rapeseed oil to mitigate price hikes.
With Bulgaria's sunflower oil sector facing severe supply disruptions, processors should explore alternative sources beyond Ukraine, including imports from Russia, Argentina, and Kazakhstan. Developing strategic partnerships with regional producers could mitigate reliance on a single market. Additionally, investing in contract farming and storage infrastructure would help stabilize domestic supply and prevent similar crises in future harvests.
Russia’s decision to reduce sunflower oil export duties in March 2025 could increase global availability, easing price pressure. Importing countries should leverage this policy shift to negotiate bulk purchases at competitive rates. Simultaneously, producers in Ukraine and Argentina must adapt their pricing strategies to remain competitive in key markets such as India and Turkey.
Sources: Tridge, Agravery, Agro Conf, CNHOP, Elevatorist, Milk News, Rosng, UKR Agro Consult
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