After a rise in prices, which lasted for several months, sunflower seeds began to fall in price. And all because the supply began to greatly exceed the demand.
Currently, sunflower in the center of Russia costs about 28,400 rubles per ton, although as recently as February, it was about 29,000.
At the same time, from November to February there was a significant rise in price: by almost 40%. But now there are almost no factors that would pull the price up. But there are enough reasons for the decline.
Stocks put pressure on farmers
Last year, Russia managed to harvest a record sunflower crop. However, there is nowhere to store it.
At the same time, the volume of stocks in warehouses is now about 2.8 million tons, while a year ago it was 2.1 million tons.
And with the onset of spring, it gets warmer, storage conditions deteriorate. Therefore, producers have a powerful incentive to get rid of surplus faster, especially since a new crop is coming soon.
Moreover, some producers left the harvesting of part of the sunflower crop for the spring. Consequently, inventories will rise even further, adding to the already high pressure on prices and potentially further lowering them.
Vegetable oil export prices are falling
They have dropped about $140 lately to $1040. This reduces the motivation of oil extraction complexes (OEP) to maintain high production volumes, and therefore they are in no hurry to purchase raw materials.
It is possible that they are simultaneously waiting for price cuts from manufacturers.
Export duty grows
From October to February it was zero, and now it has risen sharply to about 2,000 rubles per ton. This makes the sale of oil outside the country less profitable.
As the head of the Russian Oil and Fat Union, Mikhail Maltsev, noted, all government measures to curb sales are a disservice to farmers.
MEZs repay loans
Right now, such enterprises are entering a period when it is time to repay working loans. This means that they have even less free money to buy sunflowers.
This further drives down prices.
What to expect next?
According to most experts, sunflower prices peaked in February, and it is unlikely that they will return to this level in the near future.
“Most likely, the price will fall further, since the totality of the above factors is pushing it in this direction.
We expect that sunflower prices will continue to decline in the near future,” SovEcon analysts say.
