Sunflower margins turn negative as Ukrainian processors face seed shortage

Sunflower processors in Ukraine are squeezed between rising seed prices and falling Black Sea oil values, with crushing margins around minus EUR 18–23/t forcing plants to idle or switch to soy and rapeseed. Low on-farm stocks and delayed new-crop availability are keeping domestic seed prices supported despite weaker export oil quotations. The Ukrainian sunflower complex has moved into a classic late-season squeeze. Seed availability is shrinking, and much of the remaining stock is held by medium-sized farmers targeting higher prices. Processors report that at current purchase levels there is effectively no margin in sunflower crushing, prompting shutdowns or a shift to alternative oilseeds. At the same time, sunflower oil values at Black Sea ports eased slightly this week, highlighting a growing disconnect between domestic seed costs and export product prices. Market participants now face a volatile transition phase that is likely to last until rapeseed processing ramps up in early summer.

Prices

During the past week, sunflower oil offers delivered to Black Sea ports slipped by about USD 5–10/t to roughly USD 1,315–1,320/t (around EUR 1,215–1,220/t using 1.08 USD/EUR). At the same time, Ukrainian domestic sunflower seed prices increased by about UAH 500/t to UAH 31,500–33,000/t (approximately EUR 780–820/t, excluding VAT). This divergence is at the core of the current margin crisis for crushers.

Spot physical offers confirm the firm tone in seeds and kernels. Recent FCA/FOB quotations show Ukrainian black sunflower seeds around EUR 0.70/kg FCA Kyiv/Odesa and about EUR 0.60/kg FOB Odesa, while hulled bakery kernels from Ukraine are near EUR 0.98/kg FCA Dnipro. Comparable origins in Bulgaria, Moldova and China also show modest week‑on‑week increases, indicating broader strength across the sunflower value chain rather than an isolated Ukrainian move.

Supply & Demand

Processors across Ukraine report that sunflower seed stocks are low and concentrated among farmers who stocked up earlier in the season. With each week before the arrival of new-crop supplies, available volumes are shrinking further. Plants that secured raw materials in March–April continue to run, but those without coverage are increasingly idled or are switching to rapeseed and soybeans, as crushing at current seed prices generates losses of around EUR 18–23/t.

Despite negative margins, demand for the remaining sunflower seed is likely to stay strong until rapeseed harvesting and processing ramp up. The structural balance in Ukraine still features large crushing capacity relative to available seed, which amplifies competition for the final tonnes of the 2025/26 crop. Internationally, demand for sunflower oil has softened somewhat as some buyers shift temporarily to cheaper vegetable oils, contributing to the recent easing in Black Sea oil quotes.

Fundamentals & Margins

At current domestic seed prices of roughly USD 630–660/t and Black Sea oil values near USD 1,315–1,320/t, the indicative crushing margin in Ukraine is around minus USD 20–25/t once by‑products, logistics and fixed costs are accounted for. Processors confirm that, under these conditions, it is in some cases cheaper to remain idle and carry fixed costs (about USD 9–10/t) than to operate at a loss.

Low opening stocks and strong earlier‑season demand have left the sunflower balance sheet relatively tight. Ukraine still retains a leading role in global sunflower oil exports, but reduced throughput in coming weeks could temporarily curb export availability and support product premiums once nearby demand returns. However, with new‑season sowings broadly on track despite a modest one‑week delay in some western regions, the market views current tightness as seasonal rather than structural.

Weather Outlook (Ukraine)

Weather in key sunflower regions of Ukraine over the next few days is expected to be seasonally mild with scattered showers. In central and southern oblasts, forecasts point to daytime temperatures in the high teens to low 20s °C with intermittent rainfall, supporting soil moisture without major planting disruptions. Western regions should see similar patterns, with no acute heat or drought stress indicated in the immediate 3–5 day horizon.

Given that most of the current market tension stems from low old‑crop stocks and poor processing margins rather than weather damage, short‑term forecasts are unlikely to materially ease the spot squeeze. Nonetheless, the absence of severe weather risks helps underpin expectations for a more comfortable supply situation once the 2026 harvest begins.

Trading Outlook

• Processors in Ukraine: Avoid forward crushing commitments at current seed levels unless hedged via product sales; prioritize coverage in rapeseed and soybeans where margins are less negative.
• Farm sellers: With stocks already low and margins clearly negative for crushers, incremental upside in spot seed prices may be limited; consider scaling out of remaining volumes into current strength before more plants shut down.
• Importers of sunflower oil and kernels: The short‑term easing in Black Sea oil prices offers a window to secure coverage; however, be aware that deeper processor cutbacks could later tighten product supply and support prices again.

3‑Day Price Direction (Key Ukrainian References)

• Sunflower seed, domestic UA (UAH/t, ex-farm/CPT): Sideways to slightly firm, as low stocks offset weak processing margins.
• Sunflower oil, Black Sea port-delivered (EUR/t): Mildly soft bias, tracking broader vegetable oil complex and cautious export demand.
• Sunflower kernels, hulled UA (EUR/kg FCA): Steady to marginally higher, supported by tight raw seed availability and resilient food-industry demand.