Ukrainian sunflower oil prices are expected to strengthen on lower availability before dipping as stocks grow, sources said.
Chornomorsk FOB March-loading 3,000 mt cargoes strengthened $2 on the day to $642/mt as assessed by S&P Global Platts Tuesday, amid short covering buyers seeking limited stock available.
The shortage of prompt length is due to many crushing plants only having just started up, while "many small crushers are still not operating," a source said.
Additionally, crushers have been unable to access fresh batches of sunflower seed due to "weather conditions [being] bad," a source said, amid heavy snowfall.
This has prevented farmers from moving sunflower seed stocks in their silos to buyers and has led to "everyone fighting for the few seeds available," a source said, injecting strength into the market.
However, weather conditions are expected to improve over the next few days, which should make farmers move their material shortly.
Seeds are available for $326/mt CPT Plant right now but the price paid is likely to move lower over the next three weeks as transhipment resumes at a faster pace.
With another 8 million mt of seeds to crush as well as expectations of having plenty of sunflower oil in June and July -- months where availability tends to be scarce -- market participants see plenty of scope for prices to drop.
However, with demand to remain steady and Ukraine's commodities all competing for limited logistics, some sources forecast that prices will move sideways at $640-$645/mt over the next couple of months.
