The domestic oil and fats sector is entering the final month of the season amid a pronounced price rally, posing severe operational challenges for processors.
Global and domestic prices for Russian sunflower oil are demonstrating an aggressive upward trend.
According to monitoring data, the price of August export offers on a FOB (Black Sea ports) basis has settled at $1,340 per ton.
The forward trend is even more telling: prices for February 2027 delivery have soared to $1,335 per ton, an absolute high for the industry in the last three years.
The oil and fats sector is caught in a tight spot: external prices are rising, but holding companies are being hampered by the physical shortage of sunflower seeds and the logistical blockade of ports.
Chicago anomalies and raw material depletion: factories switch to rapeseed
ProZerno’s operational analytics record an even more rapid acceleration: on a FOB Novorossiysk basis, a ton of sunflower oil has increased by $25 in a week, reaching $1,375,000.
The agency’s CEO, Vladimir Petrichenko, acknowledges the atypical nature of the current situation. The rally is taking place against the backdrop of an unprecedented collapse in Chicago, where soybean oil prices plummeted by $160 in a week, to $1,480 per ton, due to improving weather in the US and falling oil prices.
The fundamental reason for the internal autonomy of Russian prices is the critical depletion of old-crop oilseed reserves.
Wholesale prices for sunflower seeds in the Volga region remain at peak levels of 45,000-47,000 rubles per ton (including VAT).
In most production macroregions, with the exception of certain areas of the Volga region and Siberia, there is no longer any raw material from the old harvest.
This calls into question last year’s optimistic reports of a gross sunflower harvest of 17 million tons—the lack of adequate growth in oil production proves that balance sheets have been overestimated.
In the face of a raw material vacuum, most domestic oil extraction plants have already halted sunflower processing, urgently switching capacity to spring rapeseed in anticipation of the new harvest, the mass harvest of which begins in the south in the second half of August.
With the arrival of new raw materials, an inevitable drop in purchasing prices is expected.
Logistics gridlock: Azov empty, Black Sea under threat
The second, longer-term inflationary factor is the avalanche-like decline in shipments to foreign markets due to the infrastructure crisis.
While vegetable oil exports remained steady at 420,000 tons in June, they plummeted to 180,000-200,000 tons in July. Analysts predict shipments will be a modest 100,000-150,000 tons in August, 40% lower than last August.
The decline in exports is due to tight logistical constraints in southern Russia. Due to military risks, navigation and shipments through the shallow ports of the Sea of Azov have been almost completely halted.
International shipowners are also extremely reluctant to enter the deep-water Black Sea, demanding colossal risk premiums, which sharply reduces the capacity of the Novorossiysk hub.
Conclusions for Strategic Business Planning
Agribusiness will need time to adapt and redirect vegetable oil export flows to alternative land routes—container trains to China or through Baltic terminals.
The main question is how much more expensive the new multimodal logistics will be compared to the previous direct sea freight.
The current three-year highs on FOB prices are a temporary shield concealing the decline in producer income.
When the first volumes of new Kuban and Stavropol sunflower seeds flood the market in the second half of August, the increased logistics costs will be transmitted aggressively down the chain.
Processing plants, constrained by port risks, will factor increased transportation costs into the purchase price of raw materials, putting significant downward pressure on prices for farmers.
