Russia temporarily suspends duties on sunflower oil, meal until Aug 31 to boost exports

The Russian government has temporarily suspended floating export duties on sunflower oil and sunflower meal, effective July 25 through Aug. 31, in an effort to support domestic producers and stimulate export activity, market sources said.

Floating duties on sunflower oil and meal were first introduced in 2021 to help stabilize domestic prices. "In this way, we were able to incentivize producers to continue supplying the domestic market," the government said in an official release.

In July, the export duty was set at Ruble 4,739.3/mt ($60) for sunflower oil and Ruble 1,054.4/mt ($17.4) for sunflower meal. These duties are scheduled to remain in place until Aug. 31, 2026, though the current suspension offers temporary relief to exporters.

The government emphasized that the domestic market remains fully supplied with sunflower oil, and the suspension will not affect its availability for Russian consumers.

"The decision will allow for an increase in export volumes and support sunflower producers and processors," Russia's agricultural export agency, Agroexport, said in a statement reported by local media July 25.

Market analysts are already anticipating a boost in export activity. Dmitry Rylko, Director General of the Institute for Agricultural Market Studies, said sunflower oil exports could reach 350,000 mt in August. He projected total exports for the 2024-25 season to hit 4.7 million mt, slightly below last season's record of 5.3 million mt, but noted signs of recovery are evident.

Meanwhile, Ukrainian sunflower oil traders do not foresee a significant impact from the Russian policy shift.

"There will not be an impact on the Ukrainian sunflower oil market as there is a shortage of supply," a Black Sea vegetable oil trader said, noting that firm Ukrainian prices are already supported by tight availability.

"If Russian duties were to remain suspended until November, we might see pressure on the Ukrainian market," the trader added, pointing out that the current move was both temporary and anticipated.

Commenting on the upcoming harvest, another market source said, "The new sunflower seed crop is due in two months, so a lot can change between now and then. We're expecting a crop of around 13.5-13.7 million mt in Ukraine."

Russia is one of the world's top producers and exporters of sunflower oil, alongside neighboring Ukraine. According to the US Department of Agriculture, the two countries together account for over 50% of global sunflower seed production and nearly 75% of sunflower oil and meal exports.

Platts, part of S&P Global Energy, assessed FOB Black Sea Ukrainian sunflower oil at $1,171/mt July 25, up $10/mt day on day.