Buyers will wait for sunflower oil prices to drop to last year's level, - opinion
During December 2021, vegetable oil did not become cheaper than in December 2020.
This is reported by specialists of the analytics and monitoring department of the Prometey Group of Companies.
They noted that the trend in the formation of demand prices this year is completely opposite to last year.
“Buyers of oil reduce purchase volumes, limit stocks of products, instantly react to price increases, choose cheaper alternatives to sunflower oil (soybean, palm oil),” analysts said.
Thus, about 200 million tons of vegetable oil are consumed annually in the world: sunflower oil accounts for 10% of world consumption. Producers and exporters of sunflower oil, apart from Ukraine, are Russia, EU, Turkey, Argentina and other countries of the world.
“Throughout December 2021, oil has already lost about 100 USD in value, but has not yet become cheaper than in December 2020. At the same time, buyers remain passive and are not ready to buy Ukrainian-made products at the current price, having the opportunity to choose cheaper vegetable oils. SEZs are not physically able to sell their own products,” the analysts emphasized.
They assume that if the situation on the world oilseeds market does not change, buyers will expect the price of sunflower oil to drop to at least last year's level of 1100–1200 USD/MT. In this case, SEZ seeds will not be able to pay more than 15-16 thousand UAH per ton. Given the volume of potential supply of sunflower and the lack of demand for sunflower oil, and hence the demand for sunflower from SEZs, the cost of raw materials for processing may fall even below the specified price range.
Let's remind, the world prices for vegetable oil have reached a historical maximum. We also wrote that Ukraine reduced the export of sunflower oil by 15%.