Ukraine benefits from the EU ban on the import of sunflower seeds to five neighboring countries, as domestic oil extraction plants are not sufficiently supplied with raw materials and are constantly experiencing a shortage, Stepan Kapshuk, director general of the Ukroliaprom association, told Interfax-Ukraine.
“Before the war there were 108 oil plants in Ukraine. Altogether they could produce 24 million tons of oil, of which 10 million tons were sunflower oil. However, these plants never managed to work at full capacity because of the lack of raw materials, which Ukraine exported. In the best seasons oil extraction plants managed to get 19 million tons of oil”, – explained the head of the industry association.
He said that previously the potential of Ukrainian oil extraction plants could produce 40-50 tons of oil per day. Because of the military actions in Ukraine stopped working about a dozen large operators, so daily plants produce 35 thousand tons of oil.
Kapshuk reminded that Ukroliaprom does not prevent the export of sunflower seeds, but proposes to introduce a mechanism of additional collection, in particular, export quotas.
“Now is the optimal moment for the government to take such a decision. Such a mechanism will bring about 3 billion UAH to the state budget, which can be used to pay salaries to the military,” – he stressed and said that the association has sent the relevant proposals to the Prime Minister.
Commenting on the agreement between the Ministry of Agrarian Policy of Ukraine and the Ministry of Agriculture of Bulgaria on signing a memorandum on sunflower oil, Kapshuk said that such a decision was caused by Bulgaria’s increase in its own production of sunflower oil.
According to his information, in recent years the number of oil extraction plants in Bulgaria has increased from 4 to 11. Last year the Bulgarian processors were able to buy Ukrainian sunflower seeds at affordable prices and increased the production of oil up to 250-300 thousand tons with the internal demand of about 150 thousand tons.
“They need to sell their own goods both on the domestic market and increase their exports,” explained the head of the industry association.
According to Kapshuk, Ukraine used to export butter to 124 countries. In recent years the geography of exports is narrowing and Ukrainian butter is sold to about 80 countries. Its main buyers are India, China, Europe and African countries.
The head of Ukroliaprom cited the experience of Ukroliaproduct ALC (Dikanka TM), which has established air shipments of organic sunflower oil to America, as a positive example of exporting to long distances.
At the same time, Kapshuk pointed out that Ukraine is actively pushed out of the Indian market by the Russian Federation, which has increased production of sunflower.
“It is not profitable for Ukraine to export oil over long distances because of high freight prices. It reaches $370 (probably per ton) on shipments to India alone. Therefore, exports to countries with a high number of Ukrainian diaspora is not profitable for our producers so far,” he said, stressing the importance of maintaining traditional markets for oil.
Ukrainian President Volodymyr Zelenskyy believes that there is “politics” in the decisions of a number of countries that have banned imports of Ukrainian grain.
“I am grateful to my neighbors who support us, but to be honest, there is politics there. We have the Black Sea blocked and we need help with weapons. We can’t risk relations with some countries,” he said Saturday in an interview with Italian media.
“And I understand that some political currents are taking advantage of this situation and instigating farmers to block grain shipments. But they have no right to block transit,” he said.
“We will solve these issues,” Zelensky stressed.
Agro-industrial holding Astarta does not expect a significant drop in income because of the ban on imports of agricultural products from Ukraine imposed by Poland and other neighboring countries, as it intends to export its products to Western European countries, representatives of the company’s board said at an online conference on Tuesday.
“We have permission to transit through these countries. Rather, our export targets are Western European countries, such as Spain, Italy, Greece and Croatia. We don’t see much risk to our revenues,” Infostrefa quoted Astarta Commercial Director Vyacheslav Chuk as saying from a conference call Tuesday.
Julia Bereshchenko, director of investor relations, expressed confidence that Astarta will be supported by expected sugar shortages in the EU and world market.
“Sugar shortages are expected not only in the EU, but worldwide as the world’s largest sugar producers, such as Brazil and India, begin to use sugar to produce ethanol. This could potentially reduce these countries’ exports,” she said.
As reported, Astarta agro-industrial holding, the largest sugar producer in Ukraine, received EUR65.16 million net profit in 2022, down 46.8% compared to 201.
The holding’s EBITDA shrank by 23.2% to EUR154.77 mln, while revenues increased by 3.8% to EUR510.07 mln.
The Hungarian Grain Association has opposed a ban on imports of agricultural products from Ukraine because it will lead to a deficit on Hungary’s domestic market and undermine efforts to curb the highest inflation rate in the European Union, Zofia Poza, secretary general of the Hungarian Grain Association, said.
“Our members are desperate and don’t support any import bans, in fact we need imports,” she told Bloomberg.
Hungary needs to import about 700,000 tons of feed corn after the 2022 crop failure, according to Hungarian grain growers.
“Eastern neighbor Ukraine will be the cheapest supplier,” she stressed.
Potsa recalled that Hungary used to only perform export control of agricultural products from Ukraine.
“Now we got a widespread ban on imports. It’s hard to call it anything other than amateurish,” the public figure said, commenting on the government’s decisions.
Poza is confident that blocking export flows will put negative pressure on food prices in Hungary, where the inflation rate exceeds 25 percent.
The Hungarian Grain Association represents the interests of flour makers, grain processors and sellers of basic food products ranging from flour and sugar to animal feed and ethanol.
Hungary has joined Poland, Slovakia and Bulgaria to impose a ban on Ukrainian grain and certain agricultural products until the end of June 2023.
While business associations in Poland are already saying that such restrictions could hurt local producers.
“Government interference in business has been a hallmark of the rule of Hungarian Prime Minister Viktor Orban, who imposed restrictions on agricultural exports in 2022 after a sharp summer decline in production,” Bloomberg writes.
The publication reminds us that the Hungarian government has also maintained a regime of controversial price controls on basic food products, which the central bank blames for inflating inflation by forcing retailers to raise the cost of other goods to make up for lost profits. Last week, the Hungarian Cabinet of Ministers announced that it would oblige supermarkets to lower the prices of basic foodstuffs as part of a new package of measures.
AGRICULTURAL PRODUCTS, BAN, Hungarian Grain Association, IMPORTS
Ukrainian sugar producers have asked EU countries to reconsider the sugar export ban on domestic EU markets and resume it taking into account the sugar shortage in Europe, Nazar Mykhailovin, acting head of Ukrtsukor, said.
“Not all countries impose an embargo on Ukrainian products. We need a way through which we can sell exports of sugar. We have to forget about the sea route for some time, but the transit through the EU countries, particularly through Poland and Romania is needed,” he commented to Interfax-Ukraine agency about the situation with the export of Ukrainian sugar to the EU.
According to the industry association, during the period from June 2022 to March 2023 almost 99.9% of Ukrainian sugar was sold on the EU internal market.
The top countries that bought Ukrainian sugar in March 2023 included Romania, Poland, Hungary, Italy, Bulgaria, the Czech Republic and Croatia. Poland, one of the first to ban imports of Ukrainian sugar, bought 8,242 tons of the product from Ukraine, Mikhailovin said.
“Since the beginning of the war, Ukraine has lost its sea export corridor, which has become inaccessible for Ukrainian sugar. Accordingly, the export was carried out mainly to European countries.
At the same time Mikhailovin reminded that due to the beginning of the war the EU made a decision, thanks to which and the presence of export potential Ukraine has the ability to export sugar to the EU domestic markets.
In the sugar beet sugar production season of the 2022 harvest, the factories produced 1.330 million tons of products, which fully met the needs of the domestic market and export potential, the industry association said.
“In the 2022/2023 marketing year, the export potential will depend on the area sown under sugar beet, weather conditions and yields in both Ukraine and Europe,” Mikhailovin said.
The world’s largest cryptocurrency exchange, Binance, is imposing a ban on dollar deposits and withdrawals, the company said in a statement, without specifying the reasons for the decision.
“We are temporarily suspending bank transfers in dollars as of Feb. 8,” said a Binance spokesman quoted by CNBC.
He added, however, that the company is working to resume these transactions as soon as possible.
Binance US, which is regulated by the U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN), said in a statement posted on Twitter that the decision to suspend operations has not affected it. Thus, it only affects users outside the U.S. who transfer dollars to or withdraw dollars from bank accounts.
Binance’s announcement triggered a surge in cash outflows from the exchange’s cryptocurrency wallets, according to Arkham Intelligence.
Net cash outflows from the exchange exceeded $172 million in one day, according to DefiLlama. By comparison, the company has $42.2 billion in cryptocurrency assets, so the outflow is negligible, Arkham noted.
