The European Union’s sunflower oil market is experiencing a significant downturn as prices plummet to their lowest in three years, driven by a surge in supply and falling soybean oil prices.
- Despite the influx of sunflower oil into EU ports at remarkably low prices, demand fails to rise, exacerbating the oversupply situation in the market.
- Recent geopolitical tensions and logistical challenges have facilitated large volumes of sunflower oil entering the EU market at unprecedentedly low prices, leading to a 30% increase in imports compared to the previous season.
- Sunflower oil prices for Q2 2024 delivery at six EU ports have dropped from €845 or $915/t to €831/t or $900/t FOB, marking the lowest levels since September 2020.
- Although demand for sunflower oil remains subdued due to oversupply, prices in the EU remain relatively high, reflecting the persistent imbalance between supply and demand.
- The USDA forecasts that sunflower oil imports to the EU will reach a 10-year peak of 2.35 million tons in the 2023/24 season.
- Conversely, rapeseed oil prices maintain their strength despite the decline in sunflower oil prices, buoyed by steady demand from biodiesel producers and reduced canola processing in favor of soybeans.
- Rapeseed oil for March delivery is currently offered at €890/t FOB Rotterdam, with asking prices at €855/t, indicating robust market conditions.
- Soybean oil, however, faces devaluation relative to other oils as some major refiners increase soybean processing amidst strong US demand for soybean biodiesel, causing prices to plummet by over 25% since October 2023 to €850/t FCA Hamburg.
The European oilseed market continues to navigate through shifting dynamics, with sunflower oil prices at multi-year lows while rapeseed oil remains resilient, reflecting the complex interplay between supply, demand, and geopolitical factors.