Gradual Increase in Demand Prices
Demand prices for sunflowers from the new 2024 harvest in Ukraine are gradually increasing. Currently, offers for sunflowers are ranging between 18,500 and 20,000 UAH per ton SRT (447 Eur). However, processors are cautious in declaring prices due to the unstable situation, anticipating potential price increases to 20,000-22,000 UAH/t SRT, and possibly even reaching 23,000 UAH/t SRT (514 Eur) in the near future.
Factors Driving Price Increases
Experts attribute the potential price increase to several factors:
- Reduction in Harvest: The forecasted reduction in sunflower production is a significant driver.
- Restraint of Sales: Producers are expected to hold back sales, contributing to limited supply.
- High Competition: Intense competition among buyers in the domestic market is also playing a crucial role.
Even during the mass harvesting period, farmers are likely to delay selling their sunflowers, keeping prices elevated.
Harvesting Progress
An increasing number of regions in Ukraine are joining the sunflower harvesting efforts. Currently, mostly early varieties, which suffered the most from the heat, are being harvested. However, there are almost no offers of new crop sunflowers available on forward contracts, with no physical volumes yet.
Reduced Production Forecast
In August, IA “APK-Inform” revised its forecast for sunflower production in 2024, reducing it by 3% to 14.2 million tons compared to July estimates. This new forecast is 4% lower than the production level in 2023.
The Ukrainian sunflower market is experiencing a dynamic period with rising demand and increasing prices for the new harvest. Factors such as reduced production forecasts, restrained sales by producers, and high competition among buyers are driving these trends. As more regions commence harvesting, the market will need to navigate these challenges and opportunities. Stakeholders should stay informed and adaptable to capitalize on the evolving market conditions and ensure stable operations amidst fluctuating prices.