Oil prices will be stuck: expert prognosis is not pleased

Oil prices are growing photos – Getty Images

A new pricing of sunflower oil is expected in Ukraine. Focus revealed why it happens and how can it affect the price the policy of other goods.

“If we analyze the situation that has developed over the last three months, the main reason we can detect is a decrease in yield. Recently, there is a decrease in production due to climate change, namely dry summer. This has led to significant losses for farmers. Increasing production costs, low -rise. UKAB Maxim Gopko.

According to him, due to drought in Ukraine the situation becomes even more complicated. The problems of the European Union also experience problems. High oil prices affect not only Ukrainian consumers but also European consumers. According to the UN Food and Agricultural Organization (FAO), the price index for vegetable oils (including sunflower, palm, soybean, etc.) increased by about 24%per year. And, according to Bloomberg, prices will continue to rise.

Maxim Hopka explained that the reduction of oil production leads to an increase in prices both in the domestic market and in the international market. Because climatic problems are also observed in EU countries, there is anxiety about production in 2025-2026 in the world markets.

“The world markets respond to this. They increase in 2025-2026. I will point out that Ukraine and the EU together provide about 40% of world production of sunflower, which is significantly … Speaking of the FAO vegetable oil index, it can reach such high indicators as the last time it was fixed in 2022.”

According to the expert, it is unlikely that there will be a shortage of oil in Ukraine. Yes, production will decrease, but not critical, so it will affect the final prices rather than the volume of products.

“I do not think there will be an oil deficit. Most likely, it will affect the final price,” the expert emphasized.

Economist Oleg Pendzin adds that the price of oil depends significantly on the cost of electricity, so given the threat of constant attacks on energy objects, it is also a significant factor affecting the increase in the cost of the product.

“The presses in production work on electricity. In the context of rising prices for products, I am most concerned about oil,” Pendzin warns.

As the winter approaches, sunflower oil, which has already increased, will probably continue to grow due to low yields and reduction of acreage this year, fluctuations in the cost of electricity for business, more expensive logistics, as well as because of high world demand. Therefore, given the price situation, there are two possible scenarios to increase oil prices in the fall: optimistic and pessimistic.

• The optimistic scenario stipulates that there will be no sharp rise in prices. The oil will rise, but gradually, by 10-30% per year, depending on the region.
• The pessimistic scenario, given the threats such as interruptions with energy supply, logistical difficulties, Russian attacks and sharp rises of the cost of fuel, provides a significant jump in oil prices.

“There is a displacement of climate zones. The yield indicators that were characteristic of the regions where oil crops have traditionally been grown are now demonstrating completely different results. In the future, the technologies used by agricultural companies are likely to be redeemed. The yield in the western and northern regions of Ukraine in the production of sunflowers is better. The deficit and a significant overall decline in production this year are not discussed.

According to the informant, meat prices in 2025 are increasing. Over the last three months, the retail cost of pork has not dropped below 250 UAH/kg. For example, in June, the average price amounted to 253.2 UAH/kg, which is almost 32% higher compared to the same period last year (191.9 UAH/kg). This was reported in the Association “Pigs of Ukraine”. Experts explain this dynamics mainly by increasing purchasing prices for industrial pork.

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