“When you look at that Black Sea region of Russia-Ukraine, you know, in the whole world, they produced about 60% of all sunflower oil,” he said. “And they export about 75%, so obviously they’re really key exporters and something that really is going to affect the world by not having that oil in the market.”
The U.S., in comparison, exports only 20% of its sunflower oil, with the main markets being Canada, Mexico and Japan. Neither Russia nor Ukraine are U.S. competitors for those markets, but Sandbakken expects an impact on all global vegetable oil markets as ports are shut down in the Black Sea.
“We’re not really competing in the same markets, but when you take that much oil off of the market, it’s something that’s going to have a ripple effect about all veg-oil markets and so it’s going to have some effect on our business,” he said.
Even before Russia invaded Ukraine, sunflower prices were strong, largely because of a small 2021 crop. Prices are about $10 above the same time last year.
I was talking to Thots about sunflower oil this morning. There is a lot to it that I did not really expect. The AgWeek article that Thots posted was a really good resource.
I think one of the biggest pieces of information from that is the line “Prices are about $10 above the same time last year [2021].” There has also been a global shortage as supply cannot keep up with demand.
[Bullish]
In 2019 the top importers of Sunflower-seed or safflower oil, crude were - India ($1.71B), China ($869M), Netherlands ($496M), Iran ($464M), and Spain ($440M).
Sunflower oil is the main vegetable oil used for cooking in Bulgaria. On the list of 100 essential goods for the households in the lowest 20 per cent by income, which make up the “small consumer goods basket” tracked by the country’s statistics institute, cooking oil has a weight of 1.7 per cent.
Ukraine exports almost 3x more sunflower oil than Russia. The two oils—referred to as sun oils—are vegetable oils derived from the seeds of sunflower and safflower plants. The Black Sea region including Russia exports 80% of the world’s crude sun oil.
Even before Russia invaded Ukraine, sunflower prices were strong, largely because of a small 2021 crop. Prices are about $10 above the same time last year.
The U.S., in comparison, exports only 20% of its sunflower oil, with the main markets being Canada, Mexico and Japan. Neither Russia nor Ukraine are U.S. competitors for those markets, but Sandbakken expects an impact on all global vegetable oil markets as ports are shut down in the Black Sea.
Bloomberg is anticipating supplies to dry up by April
[Bearish]
The countries with the highest import tariffs for Sunflower-seed or safflower oil, crude are India (85.4%), Switzerland (58.5%), Liechtenstein (58.4%), Bhutan (49.8%), and Sri Lanka (44.7%).
Sunflower oil has been shown to release toxic compounds when heated to higher temperatures over time. Some varieties are also high in omega-6 and may contribute to inflammation in the body when consumed in excess.
[Other Resources]
Did you know there are Sunflower oil cartels?
In 2018, Bulgaria’s anti-trust regulator stated the Supreme Administrative Court (SAC) has issued a final ruling upholding the fines imposed by the watchdog on eight companies that it accused of being part of a price-fixing cartel on the sunflower oil market.
I’ve been looking over charts and ADM seems to have a similar spike in pre market and about an hour after market open. I might try to see if there’s a spike in pre market and time an entry.
This could probably be in the Ukraine thread but it was discussing how Russia and Ukraine jointly account for 58% of the world’s sunflower oil and how the invasion is going to deeply impact the continent of Africa as they are a major trading partner.
