EU Sunflower Seed Supply Outlook
Sunflower Seed Oil Prices in the EU are facing upward pressure as supply forecasts continue to tighten. According to industry sources speaking with Expana, the EU-27 sunflower harvest for the 2024/25 season may plunge to as low as 9 million metric tons, approximately 9% lower than last season. This would mark the lowest production level since 2016. Multiple participants have expressed the possibility that final figures could fall below the 9 million mt mark once all harvest data is in. Concerns are especially high over the quality and quantity of France’s late-harvested sunflower crop, further underpinning the tight supply scenario and potentially lifting sunflower seed oil prices.
Ukrainian Sunflower Seed and Oil Supply Concerns
Uncertainty also surrounds Ukrainian sunflower seed production, with current market estimates ranging from 10.8 million to 12.4 million mt for 2024/25. Most forecasts lean toward the lower end of this range, suggesting a potential shortfall of over 2.9 million mt compared to the prior season. Market insiders warn that such a deficit could significantly tighten fundamentals and add upward momentum to sunflower seed oil prices. Given that Ukrainian supply is a critical component of the global sunflower seed oil market, any reduction in harvest volumes amplifies price volatility.
Production estimates for Russia remain at 15.5 million mt for 2024/25, though many traders expect this figure could decline. If realized, the Russian crop would also be smaller by nearly 2 million mt compared to 2023/24. This contraction in the Black Sea region—encompassing both Ukraine and Russia—further intensifies concern among buyers and processors, lending additional support to sunflower seed oil prices.
Substitution Pressures and Limited Market Liquidity
As supply worries weigh on sunflower seed oil prices, some market participants report increasing EU utilization of soybean oil toward the end of November. The influx of soybean oil is placing downward pressure on sunflower oil values and could potentially narrow the spread between the two commodities. This trend may somewhat temper the upward climb of sunflower seed oil prices in the short term.
However, tight liquidity conditions in both Ukraine and Russia are mitigating any significant price relief. With farmers reluctant to sell their sunflower seed crops amid expectations of further price increases, processors face a challenging environment. Traditionally, processors buy sunflower seeds at favorable rates and profit later through oil production. Today, they must acquire seeds at higher prices, complicating their profitability. This tug-of-war—where farmers hold out for better margins and processors struggle to secure affordable seeds—limits overall sunflower oil production and further bolsters sunflower seed oil prices.
Ongoing Volatility in Sunflower Seed Oil Prices
All signs point to continued volatility in sunflower seed oil prices as the 2024/25 season unfolds. Declining production forecasts in the EU, Ukraine, and potentially Russia are constraining supply. Although some substitution with soybean oil may temporarily ease pressure, limited liquidity and the standoff between farmers and processors persist. These complex market dynamics are likely to sustain elevated sunflower seed oil prices in the months ahead, making the global market highly sensitive to any shifts in production, quality, or trade flows.
Written by Nick Wood
