Experts predict a decline in prices for sunflower oil in Bashkiria

Retail prices for sunflower oil in Bashkiria will either decrease or remain at the same level. This was reported to RBC Ufa by market experts. The cost of sunflower oil in the domestic market is influenced by several factors, the main of which are the high harvest of the 2021 season, the introduction of export duties on sunflower oil in September 2021, and the almost halted export of sunflower seeds from Russia. This was announced by the head of the "Crop production" direction of the Federal State Budgetary Institution "Center for Agroanalytics" Rudolf Bulavin.

“This season's sunflower harvest will be the second largest ever and will far exceed last year's harvest. By December 1, sunflower had been harvested from 9.58 million hectares (99.2%), 15.65 million tons were harvested in the originally recorded weight (last year - 13.23 million tons). In the context of export duties on sunflower seeds and sunflower oil, this led to a general downward trend in prices in the domestic market,” Bulavin said.

According to the departmental monitoring of the Ministry of Agriculture of Russia, the average prices for sunflower seeds in the country from September 1 to December 1, 2021 fell by 24.1% and amounted to 35,341 rubles per ton by the beginning of December. In November, the average cost of a ton of sunflower seeds was 35,830 rubles, which is 2% lower than October prices. At the same time, in the Siberian and Southern Federal Districts prices in November decreased by 7.4% and 6.1%, while in the Central and Volga Federal Districts, on the contrary, they increased by 2.6% and 0.4%, respectively.

The duty brought down the price

As Vyacheslav Kitaychik, commercial director of the Sigma group of companies (the group includes oil extraction plants in Kumertau and Chishmakh), Vyacheslav Kitaychik, told RBC Ufa, three factors influence the price of sunflower in Russia. The first is the export price of sunflower oil. Russia is an export-oriented country, and more than half of the oil produced in Russia is exported. The price of oil this year varies from 1350 to 1400 dollars per ton FOB (Free on Board - an international term meaning the price for products with loading at the port of departure). The second factor is the dollar exchange rate, which has recently fluctuated from 69 to 75 rubles. And the third factor is the variable oil duty, which was introduced on September 1, 2021.

“When in early November the duty for December was published in the amount of $276.7, and for November it was $195, that is, the duty increased by $80, this affected the price of sunflower, which went down. In mid-November, we saw a sharp rise in the dollar exchange rate, which turned from 69–70 into 75 rubles. This started pushing up the price of sunflower. This week the price of oil went down. From the level of 1400-1410, it went to the level of $1370 on FOB. That is, rolled back to 40 dollars. Thus, now the price of sunflower is slowly starting to decline. This is a very lively process that does not depend much on the processor, because sunflower occupies more than 90% of the cost of processing. And everything depends on how these three external factors affect us,” says Vyacheslav Kitaychik.