Russia boosts sunflower oil share in Turkey, while Iran markets slow

Russia is increasing its presence in the Turkish sunflower oil market, thereby compensating for the partial loss of access to the Iranian and Indian markets, due to the situation in the Red Sea, with the activity leading to an increase in prices for sunflower oil compared to soybean oil.

The number of offers of sunflower oil from Russian sellers increased significantly over the past ten days, while through the last week there were many trades of Russian origin sunflower oil, Turkish sources have told Fastmarkets.

Supply levels for sunflower oil of Russian origin, according to Fastmarkets monitoring, are from $895 per tonne CIF Mersin, while trade levels were heard in the range of $880-888 per tonne CIF Mersin, with delivery in February.

According to the industry sources known as Sunseedman, as of January 24, 2024, 30,000 tonnes of Russian sunflower oil arrived into Turkish ports, nearly double the 18,000 tonnes that arrived in December 2023.

The increase in supplies of Russian oil to Turkey is to a large extent due to a decrease in sales to Iran and India – with the situation in Iran complicated by a ban on Russian sunflower oil that has been in place.

No official news has been heard from the Iranian government of any relaxation of lifting of the ban, but market sources spoken to by Fastmarkets claim that the country has resumed purchases of Russian sunflower oil in recent weeks, but they are limited by quotas.

At the same time, the Indian market, where Russia almost tripled its sales in the 2022-23 season compared to the 2020-21 season with flows rising to 721,459 tonnes and displacing Ukrainian sunflower oil, is now becoming unattractive for both Russian sellers and Indian buyers.

This is due to several factors.

One of the main reasons is the fairly high import of sunflower oil by India in January 2023 and since the beginning of the 2023-24 season in general.

Surge in India’s sunflower oil imports amid rising freight costs

According to Solvent Extraction Association data, India’s sunflower oil imports from September to December of the 2023-24 season increased by almost 27% compared to the same period in the 2022-23 season and amounted to just over 840,000 tonnes, of which 260,850 tonnes were imported in December.

In addition, the rise in the cost of freight and the increase in the delivery period of sunflower oil via the route from the Black Sea region to Asia around Africa have made sunflower oil less attractive in terms of price compared with soybean oil from South America.

Vessels are being forced into a longer route amid missile attacks emanating from Houthi rebels along the coast line of Yemen, which has forced many ships to use longer routes around the Cape of Good Hope to access Asian markets.

According to Fastmarkets monitoring data, soybean oil of South American origin for delivery in March is offered on average $10 per tonne cheaper – $940 per tonne CNF India – than sunflower oil Russian original $950 per tonne CIF India.

Market sources suggest that India’s fairly high imports of sunflower oil, as well as the difference in prices for soybean and sunflower oil, will lead to a decrease in India’s imports of sunflower oil in January.

Along with this fact, Turkish sources suggest that following the recent removal of the reference price by the Turkish government, import duties on sunflower oil and sunflower seeds will be reduced to combat inflation ahead of elections.

This will lead to an increase in the demand for sunflower oil of Black Sea origin, in particular Russian.

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