The commodity markets have been severely impacted by the Russian invasion of Ukraine, not only for sunflower and rapeseed, but also wheat and corn.
Russia and Ukraine are significant suppliers of grains and oilseeds; Ukraine is the world’s top exporter of sunflower oil, producing 46% of the global supply of sunflower seed and safflower oil in 2019. Together with Russia, the two countries account for 60% of the world production of sunflower oil and about 75% of the world export of this product.
Due to the ongoing conflict and resulting shortages, suppliers have now placed a freeze on all refined seed oil sales due to the low product availability.
Suppliers are looking for viable vegetable oils and the main beneficiary in the EU/UK is rapeseed oil, but with rapeseed markets continuing to test record highs due to increasing demand, there's unlikely to be enough seed or refinery capacity to meet this additional demand. Price volatility is therefore expected with short supplies of all oils, especially sunflower, rapeseed and vegetable oils.
Oil suppliers are suggesting that operators may have to review policies around either the use of soyoil, palm oil or palm oil derivatives (palm olein) to give greater flexibility.
A prolonged conflict also threatens the next growing season.
Our team can provide advice and assistance with your oil purchasing – please get in touch if you’d like our support.