According to a report by Izvestia, companies are cutting back on sunflower oil production due to declining sunflower yields and low processing profits. Processors say this could lead to changes in the consumer prices of sunflower oil. Data from Russia’s Federal State Statistics Service show that sunflower oil prices have already risen by 15% over the past year. Meanwhile, the Ministry of Agriculture claims that current production levels are sufficient to meet domestic market demand and fully tap into the country’s export potential. Izvestia’s report will explore the possible scenarios facing both the market and consumers.

Why has sunflower seed oil production declined?

For the current agricultural year (September 2025 to August 2026), sunflower oil production is forecast at 7.6 million tons. This projection comes from the Price Index Center’s (PIC) annual consensus forecast, which has been reviewed by Izvestia. The forecast is 3% lower than the previous analyst survey results. According to data from the Ministry of Agriculture, last year’s production was 8 million tons. Consequently, this year’s output could decline by 5%.

Andrey Kurnosov, CEO of Leon Agricultural Enterprise, stated that the decline in sunflower oil production is due to this year’s poor sunflower seed harvest. According to data from the Industrial Appraisal Center of the Russian Agricultural Bank, as of November 21, the total sunflower seed production amounted to 16.5 million tons, a decrease of 3.5% compared to the same period last year. The Federal State Statistics Service of Russia reported that, as of early November, sunflower seed production fell by 0.8% year-on-year to 14 million tons.

Andrei Kurnosov pointed out that the production and processing of this crop are concentrated in southern Russia. Andrei Neduzhko, CEO of Stepnoy Agricultural Holding, said that the company’s harvest this year has declined by 15% compared to the previous season. According to a representative, the EFCO Group (whose brands include Sloboda, Altero, and DeOlio) plans to harvest 17.5 million tons, a 5% decrease from the previous season.

Sunflower seed production

According to Andrey Neduzhko, the primary reason for the decline in harvest is adverse weather conditions. In spring, farmers in southern regions were hit by frost, which impaired the development of young seedlings; subsequently, the summer saw a prolonged drought. According to data from the Federal State Statistics Service of Russia, the harvest in Rostov Oblast declined by 37%, dropping to 1.01 tons per hectare. Andrey Kurnosov noted that yields across different districts in the region ranged from 3.5 to 1.5 tons per hectare, whereas the normal level typically stands between 2.0 and 3.0 tons per hectare.

In addition, processors have noted a decline in the oil content of sunflower seeds. The Russian Federation’s Blago Group (which owns the brand of the same name, as well as Almador and Dary Kubani) Marketing Director Kirill Melnikov (Кирилл Мельников) It was pointed out that Andrei Neduzhko confirmed this year's raw material yield fell short of expectations, and the sunflower seeds did not meet processors' requirements. The oil content of the raw materials ranges from 41% to 45%, whereas the normal value is 46%.

Against this backdrop, production costs have been steadily rising—increasing by 20% since 2024, said Andrei Kurnosov. He lamented that, due to the widespread shortage of raw materials driving up prices, businesses are facing declining profits in butter production. A representative from the European Federation of Butter Producers (EFKO) added that, compounded by export tariffs and a weakening U.S. dollar exchange rate, this has created a “negative economic” situation.

According to the Agri-Food Communications Company Ilya Bereznyuk, Managing Partner at Agro and Food Communications, said that this situation has led to the temporary closure of several factories in the country. According to its operational report, Rusagro, a company owned by businessman Vadim Moshkovich (whose brands include Benefitto, Shchedroye Leto, and Ya Lyublyu Gotovit), produced 193,000 tons of vegetable oil from July to September 2025—23% less than in the same period last year. The company attributed the decline in production to the closure of the Atkarsk Oil Extraction Plant (OEP) for reconstruction. A representative of Rusagro did not respond to a request from Izvestia. A request for comment from Izvestia.

According to forecasts by the Ministry of Agriculture, this year’s total output of oilseeds (sunflower seeds, soybeans, and rapeseed) will be approximately 31 million tons, with sunflower seeds accounting for about 17 million tons. A spokesperson for the Ministry of Agriculture told Izvestia that these production levels will fully meet domestic demand in the vegetable oil market and will also fully tap into the country’s export potential. He added that China’s self-sufficiency rate for vegetable oils has already exceeded 250%, far surpassing the 90% target set forth in the Principles of Food Security.

What impact will the production cut have on costs?

Ilya Bereznyuk ( Ilya Bereznyuk) stated that the decline in butter production has little impact on price increases. Kirill Melnikov ( Kirill Melnikov) It was pointed out that this is due to the existence of a price restraint mechanism: when the export price of processed products rises, the export tariff will be increased. He also added that the mechanism has been extended until August 31, 2028.

According to data from the Federal State Statistics Service of the Russian Federation (Rosstat), from January to October 2025, the average retail price of sunflower oil was 151 rubles per liter, an increase of 15% compared to the same period in 2024. According to data from the Central Bank of Russia, the annual inflation rate in October was 7.71%.

According to data from the analytics firm NTech, the average weighted retail price of these oil products rose by 13% year-on-year in the third quarter, reaching 125 rubles per liter. The analysis utilized aggregated, anonymized monthly sales data drawn from more than 100 million receipts.

Despite the decline in production, the export price of sunflower oil is rising. Price Index Center ( PIC) Senior Analyst Ekaterina Zakharova Ekaterina Zakharova) It was pointed out that in early November, the export price of sunflower oil reached its highest level since autumn 2022. According to her data, as of early November 2025, the sunflower oil export index, calculated on a FOB basis from Novorossiysk, stood at USD 1,245 per ton, up 3% from the previous month. Data from PIC show that compared with the same period last year, the price of sunflower oil has risen by 15%, or USD 158 per ton.

Kirill Melnikov ( Kirill Melnikov) It is acknowledged that sunflower oil prices may undergo some adjustments in the future. He explained that producers have been forced to factor into their selling prices the rising costs of scarce raw materials as well as expenses related to energy, transportation, packaging, and labeling. At the same time, he pointed out that abundant harvests of other popular oilseed crops will help keep export volumes at high levels. According to a representative from EFKO, the company’s soybean production this year is expected to reach 9.2 million tons (a 30% increase year-on-year), while rapeseed production is forecast to hit 5.7 million tons (a 21% increase year-on-year).

According to NTech data, from July to September, physical sales of retail sunflower oil reached 304,000 tons, representing a 5% year-on-year increase. In monetary terms, the market size grew by 18.5% year-on-year, reaching 38 billion rubles.