The expected increase in prices for Ukrainian sunflower has been affected by new US trade restrictions. Donald Trump, the US President, announced his intention to impose additional duties on goods from Europe, Mexico, Canada and China. The decision caused an immediate reaction on the stock exchanges and changed the balance in the vegetable oil market, in particular, soybean and sunflower.

This statement was reported by analysts of the First Ukrainian Agricultural Cooperative (FUAC) created within the UAC.

“It would seem that everything was going well: seasonal factors supported the upward trend. However, the news about possible duties on European goods turned the situation around. The price of soybean oil has fallen sharply over the past few days, and this affects the sunflower oil market as well.  We have already lost about USD 5-10 per ton of sunflower oil over the past week. The seasonal model still indicates that sunflower prices may rise in March-April, but Trump's trade wars are likely to restrain this growth. There were expectations that the market would reach the level of 29,000-29,500 UAH/t. Now this probability has decreased. Now the price of sunflower will be around 28,000 UAH/t, possibly with short-term rises,” the market analysts said.

The sunflower market is entering the period of instability. “If soybean oil continues to fall, sunflower oil may lose another USD 10 per ton in the coming days. This will also affect sunflower, and this week there may be a further decline of 200-300 UAH/t,” the analysts added.

Despite the negative factors, Ukrainian sunflower may also benefit from the trade war.

 “American soybean oil may actually disappear from the European market or reduce its presence to a minimum. This means that Europe will look for an alternative - perhaps in Argentine soybean oil, perhaps in palm oil. But part of the demand will also switch to sunflower oil,” the FUAC said.