Mumbai, 04 Dec (Commoditiescontrol):Sunflower prices in the European part of Russia dropped by 550 rubles last week, settling at 40,625 rubles per tonne, according to SovEcon. This marks the first decline since late August, driven by falling export prices for sunflower oil and lower demand from processors.
Export quotations for sunflower oil fell $5 to $1,110 per tonne FOB last week. Analysts believe sunflower oil prices have peaked and are likely to decline further amid softening trends in other vegetable oil markets. In the same period, soybean oil export prices slipped $13 to $1,145 per tonne FOB.
Reduced sunflower harvests in the Black Sea region have been factored into prices, but processor demand remains weak, adding to market pressure. The weakening ruble provided some cushion, with the USD/RUB exchange rate rising 9% week-on-week to 109.6.
In a significant policy move, Russia’s Ministry of Agriculture has proposed revising the calculation method for sunflower oil export duties from February. The proposed shift to a current-month price index from the previous month’s index may lower export duties in response to falling sunflower oil prices.
Market fundamentals suggest further downside for sunflower prices, weighed down by a weak ruble and high oil quotes. However, a steep price correction could stimulate processor demand in the coming months, alleviating capacity utilization concerns.
(By Commoditiescontrol Bureau: 09820130172)
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