The global sunflower market is experiencing significant transformation in the 2025/26 marketing year, characterized by divergent regional production patterns and evolving trade flows. The USDA's recent downward revision of Ukraine's sunflower seed production by 800,000 tonnes to 12.7 million tonnes has created a supply gap that is reshaping global trade dynamics.
This reduction, representing a 6% decrease from previous forecasts, comes despite an overall 8% increase in global production to 56.2 million tonnes, highlighting the growing disparity between leading producers.
Russia continues to consolidate its position as the world's largest sunflower producer with a record 19.0 million tonnes harvest, redirecting global trade patterns and leveraging its competitive advantage.
Ukraine's Drought-Driven Downturn Ukraine's sunflower sector faces substantial headwinds, with USDA revising 2025/26 production down by 800,000 tonnes to 12.7 million tonnes, representing a 6% decrease from previous estimates and a 2% decline year-on-year. This reduction primarily reflects adverse weather conditions during critical growth phases in southern and eastern growing regions, which compromised yield potential despite relatively stable planted area.
The production downgrade has direct implications for Ukraine's processing sector, with sunflower oil output now projected at 5.3 million tonnes (-300,000 tonnes) and sunflower meal production expected to decline to 5.1 million tonnes (-300,000 tonnes).
The impact of seasonal dryness and heat has been particularly severe in Ukraine's southern regions. According to scientists at the Institute of Agriculture of the NAAS, soil moisture in regions such as Dnipropetrovsk is critically low , less than 160 mm, with yields of less than 1 t/ha considered acceptable under such conditions.
While temperatures have decreased and rains have arrived in some areas, the south and east have received significantly less precipitation than the center and west of Ukraine, creating stark regional disparities in production prospects.
Russia continues to strengthen its position as the dominant global producer, with sunflower harvest estimates raised to 19.0 million tonnes (approximately 14% increase year-on-year). This expansion reflects continued area expansion and generally favorable growing conditions across Russia's main production regions.
Despite heat in the southwest, weather conditions remain favorable in other regions, with sown areas estimated at 10-11.5 million hectares compared to 9.8 million hectares in 2024. The country's processing capacity has similarly expanded, with crush volumes projected to support both domestic consumption and aggressive export programs.
Russia's sunflower oil production is forecast at approximately 7.4 million tonnes, with significant volumes destined for export markets in the Middle East, North Africa, and Asia. Russia's competitive pricing and expanded production capacity are increasingly redirecting global trade flows, particularly as traditional supply patterns face ongoing disruption.
The European Union shows mixed production signals, with the International Grains Council (IGC) forecasting production of 9.4 million M/T (14% increase year-on-year), while other analysts project lower outputs due to weather challenges in key producing countries.
Expana has lowered its forecast for the EU sunflower crop by nearly 1.1 million M/T from its July prediction to 8.3 million M/T due to unfavorable weather conditions in Bulgaria and Romania.
If this forecast holds true, the crop will remain below last year's 8.7 million M/T when crops in southeastern Europe were affected by hot and dry weather.
Turkey demonstrates remarkable growth with estimated production of 800,000 M/T (49% increase year-on-year), driven by a substantial 40% increase in planted area. However, this volume remains relatively small in the global context and will not significantly impact global supplies.
Meanwhile, Argentina expects a reduction to 4.7 million M/T despite earlier record forecasts, while the United States anticipates a significant 57% production increase to 1.8 billion pounds, driven by planted area expansion from 720,800 to 1.07 million acres.
Country | Production (MMT) | Year-on-Year Change | Key Factors |
|---|---|---|---|
Russia | 19.0 | +14% | Area expansion, favorable weather |
Ukraine | 12.7 | -2% | Seasonal dryness, reduced yields |
European Union | 8.3-9.4 | -5% to +14% | Weather variability across regions |
Turkey | 0.8 | +49% | Substantial area expansion (40%) |
Argentina | 4.7 | -7% | Reduction in planted area |
United States | 0.9 | +57% | Significant area expansion |
The Ukrainian sunflower market is experiencing notable price volatility due to constrained supply. Current CPT-Plant prices have firmed to $660-685 Per M/T for seeds with >50% oil content, with processors competing aggressively for reduced supply.
This price strength reflects multiple factors including the downward revision of production estimates, uncertainty regarding final harvest results, and strong demand from processors seeking to maintain utilization rates. The FOB Black Sea price for Ukrainian sunflower oil has shown strength, with offers reported in the $1,100-$1,150 Per M/T range for Q4 shipment.
However, Ukrainian exports face logistical challenges including elevated insurance costs (adding 1.5-2.5% to CIF costs) and constrained shipping capacity through Black Sea routes. These factors have created a significant price premium for Ukrainian origin compared to Russian supplies, with the spread typically ranging from $50-$100 Per M/T
Russian sunflower oil continues to trade at a significant discount to Ukrainian origin, typically $50-$100 Per M/T lower on FOB basis, creating arbitrage opportunities for traders willing to navigate the compliance challenges. This competitive pricing reflects Russia's expanded production base, lower logistics costs due to the absence of war risk premiums, and government support for agricultural exports.
The Russian government's temporary suspension of floating export duties on sunflower oil and meal from July 25 through August 31, 2025, has further enhanced export competitiveness. The duty had been set at Ruble 4,739.3 Per M/T ($60) for sunflower oil and Ruble 1,054.4 Per M/T ($17.4) for sunflower meal, and its suspension was expected to increase August sunflower oil exports to approximately 350,000 M/T.
Argentinian sunflower oil maintains a quality premium in international markets, with FOB prices typically ranging between $1,115-$1,125 Per M/T , representing a moderate premium over Black Sea origins. This premium reflects Argentina's reputation for consistent quality, reliable delivery, and preferential market access in certain regions.
However, Argentina's production challenges and reduced exportable supplies have limited its ability to capitalize fully on current market conditions.
CPT plant prices in Ukraine must account for domestic transportation costs ranging from $15-25 Per M/T depending on distance to port facilities. FOB Black Sea prices include loading costs, port charges, and documentation fees typically adding $20-30 Per M/T to ex-works values. CIF destinations vary significantly by region, with freight to Southeast Asia adding $40-45 Per M/T, Mediterranean and Northern Europe destinations $30-35 Per M/T.
Global sunflower oil imports show concentrated demand patterns, with India remaining the largest importer at approximately 3.2 MMT annually, followed by China at 1.2 MMT, and the European Union at 2.0-2.8 MMT. These markets exhibit different seasonal patterns and quality preferences, with India prioritizing price sensitivity, China focusing on contractual reliability, and the EU emphasizing sustainability certifications.
Middle Eastern and North African markets continue to represent significant demand centers, particularly Egypt, Iran, and UAE, with combined imports exceeding 1.5 MMT annually.
Turkey's domestic production growth has reduced import requirements, creating a more balanced supply-demand situation and potentially allowing for increased export orientation in processed products.
The geographical distribution of sunflower trade has undergone significant transformation since the implementation of sanctions on Russian agricultural exports. Traditional European markets have significantly reduced imports, while Asian, Middle Eastern, and African destinations have increased their share.
This shift reflects both political alignment and economic necessity, as price-sensitive markets prioritize affordability over geopolitical considerations. Russia has aggressively developed new markets for sunflower products, with particularly dramatic growth in certain destinations.
Singapore represents a notable case, with Russia supplying approximately 11,400 tonnes of sunflower oil in January-April 2025 , an 11-fold increase compared to the largest supply volume recorded for the entire year of 2020.
Global sunflower oil consumption for 2025/26 is projected to grow 7% to 20.4 MMT on higher supply and competitive prices. The increase is projected in major consuming countries including India, China, and the EU. This consumption growth reflects several key drivers:
Despite an 8% increase in global production to 56.2 million tonnes, the sunflower market balance has tightened due to stronger-than-expected demand growth and production shortfalls in key regions.
Global sunflower crush volume is forecast to increase by 4.1 MMT to 51.8 MMT, while sunflower oil production is projected to rise by 1.8 MMT to 21.9 MMT. The reduction in Ukrainian production has particular significance for global balances, as Ukraine has historically been the world's largest exporter of sunflower oil.
With Ukrainian exports projected to decline by approximately 300,000 tonnes, importers are increasingly forced to seek alternative sources, primarily from Russia but also from other origins including the EU and Argentina.
Global sunflower seed stocks at the end of 2025-26 are forecast at 3.26 MMT, which is below the five-year average despite increased production. Similarly, global sunflower oil ending stocks for 2025-26 are forecast at 2.4 MMT, flat compared with 2024-25 but insufficient to build a comfortable buffer against supply disruptions.
The tight stock situation creates potential for price volatility in response to any unexpected supply shocks or demand surges. This is particularly true for the sunflower oil market, where storage limitations and rapid turnover amplify price movements in response to changing fundamentals.
The sunflower market does not operate in isolation but is part of a broader vegetable oil complex that includes soybean, palm, rapeseed, and other oils. Price movements in one category influence demand patterns in others through substitution effects.
The current price premium for sunflower oil relative to alternatives may constrain some demand growth in price-sensitive markets, particularly if the price differential widens further.
Palm oil production entering a seasonally slower period and soybean oil facing uncertainty regarding South American crop prospects provide some support to sunflower oil prices. However, the price differential must remain within certain bounds to maintain sunflower oil's competitiveness in key applications.
Near-term price action is likely to remain volatile with upward bias in sunflower complex prices due to supply constraints. Sunflower oil is expected to maintain premiums to other vegetable oils through Q1 2026, though the differential may narrow from current extremes as Russian export volumes increase.
The December 2025-March 2026 period will be critical for price direction determination, with Southern Hemisphere crop development and Northern Hemisphere export pace providing key signals.
Medium-term supply outlook suggests gradual improvement in sunflower production as area expansion continues in Russia, Turkey, and EU countries. However, structural constraints may limit Ukrainian production recovery even if weather conditions normalize, due to ongoing logistical and economic challenges.
Demand growth for vegetable oils is expected to continue at 2-3% annually, driven by population growth, economic development in emerging markets, and biofuel mandates.
We are GrainFuel Nexus® We own the flow.
You will feel us in the details: at the elevator, in the charter party, inside the LC, in the hatch at midnight.
GrainFuel Nexus® | Expert Commodity Global Sourcing & Strategic Advisory© | All Rights Reserved
customer.service@grainfuel-nexus.com
Subscribe to our Strategic Reports - Essential Dive & Deep Dive Advisory
This is a general market analysis for informational purposes only and does not constitute financial or professional advice. The author assumes no liability for any actions taken based on this information.