Ukraine’s Sunseed Prices Foreseen to Decline Amid Oversupply and Processing Recovery

The sunflower seed markets of Ukraine, once roiled by war, logistical bottlenecks, and weather-driven volatility, now face a new dynamic: a projected price decline in Q2 2025. Broker analyses and agricultural cooperatives, including the All-Ukrainian Agrarian Council’s PUSK, now anticipate a drop to 24,000–25,000 Ukrainian hryvnia (UAH) per ton by late May—a stark contrast to the upward pressures of early 2025. This shift reflects a confluence of factors, from accumulated stockpiles to processing recovery, even as geopolitical risks linger.

The Decline Forecast: Oversupply and Processing Gains

Brokers predict a temporary price surge in late April (up to 200–400 UAH/ton), driven by short-term market dynamics, but a sustained downward trajectory through May. The key drivers of this reversal are:

1. Stockpile Release: Ukrainian farmers held back millions of tons of sunflower seeds during the winter due to delayed processing. These accumulated stocks are now flooding the market, creating a surplus. Analysts note that 1.2–1.3 million tons/month of seeds are now being crushed in April—a rebound from winter lows—thereby increasing oil supply and pressuring prices downward.

2. Processing Recovery: Sunflower seed crushing volumes have surged to pre-war levels, with plants operating at 80–90% capacity. This efficiency, coupled with relaxed logistical constraints at ports like Odessa, has enabled record export shipments. By mid-April, 234,000 tons of sunflower oil had already been exported, with 480,000 tons contracted, further easing supply pressures.

3. Global Market Volatility: Trade tensions, such as U.S. tariff discussions and competition with soybean oil, have introduced instability. For instance, U.S. biodiesel policies and Chinese trade dynamics have caused soybean oil prices to fluctuate, indirectly impacting sunflower oil’s competitiveness.

Geopolitical Risks and Trade Dynamics

While the price decline is forecasted, Ukraine’s agricultural sector remains vulnerable to external shocks. The ongoing Russia-Ukraine conflict continues to disrupt Black Sea logistics, though recent export corridors have eased some bottlenecks. Meanwhile, the EU’s prepared retaliatory tariffs on U.S. soybean oil—spurred by U.S. tariff threats—could indirectly boost demand for sunflower oil, yet such policies also risk destabilizing trade flows.

Implications for Investors

The price decline presents a mixed picture for stakeholders:
- Producers: Farmers may face margin pressures as prices fall, though the release of stockpiles could stabilize cash flows.
- Processors: Increased crushing volumes and lower input costs could improve margins, but reliance on export demand remains risky.
- Global Buyers: The dip offers a window to secure supplies at lower prices, though geopolitical risks could trigger sudden volatility.

Conclusion: A Temporary Reprieve in a Volatile Market

The projected price decline to 24,000–25,000 UAH/ton by late May underscores the cyclical nature of agricultural markets. While oversupply and processing gains are driving the downward trend, investors must remain vigilant.

• Key Data:
• Q2 2025 sunflower seed prices: Expected to drop to 24,000–25,000 UAH/ton by May 31.
• Crushing capacity: 1.2–1.3 million tons/month (up from 1.0 million tons in early 2025).

• Exports: Sunflower oil shipments hit 234,000 tons by mid-April, with 480,000 tons contracted.

• Risks:

• Weather conditions in key growing regions could disrupt the 2025 harvest.
• Black Sea logistics remain fragile, with Russia’s naval posturing posing a wildcard.

The decline is not a permanent solution but a reflection of temporary supply imbalances. Investors should hedge against volatility by diversifying into complementary crops or geographic markets. As Ukraine’s sunflower fields turn golden again, the true test will come when the next harvest meets global demand—and geopolitical storms.