AllSeeds Group, one of Ukraine’s largest producers of sunflower oil and meal, has stopped buying raw materials for processing and finished products for export due to delays of ships in ports during the implementation of a new system of export security, the head of the group Vyacheslav Petrishche said on Facebook.
He recalled that on the initiative of the Verkhovna Rada Committee on Finance, Tax and Customs Policy from December 1 began to operate the export security regime to operations for the export of certain types of agro-commodities, which provides a new procedure for customs clearance of export cargoes.
“Well a good thing it seems. Allegedly to combat the shadow market and return currency to the country. I am personally unequivocally in favor of it. I have always been, am and will be against the shadow market. But can it be done not to the delight of the enemy during the bombings, but for the good of the motherland? (…) If you introduce a new procedure, can it be tested first? Will it work at all?” – wrote Petrishche.
According to his information, the authorities issued permits for loading agro-products with all necessary checks on November 29 (before the introduction of the new system – IF-U). Large ships entered Odessa seaports, carried out loading for several days and waited a long time for registration.
“Did you put all this goodness under the berths on purpose for inspection? So that the enemy could take better aim???? (…) during the war I would call it sabotage, you can’t think of anything else. (…) Well, let these boats go (the law has no retroactive effect) and do not launch new ones (and they are already waiting) until exporters submit export documents properly executed according to the new procedure”, – said the head of the AllSeeds group of companies.
Petrische drew attention to the growing losses of companies due to ship demurrage and pointed to safety problems during the downtime in the transition period when implementing the new agro-export system.
“Our company has stopped buying raw materials for processing and finished products for export. It is better to let people go home and sit with their money than to take the risk that if you are not the enemy, you will be “sheltered” by your own people. I recommend it to everyone,” Petrishche emphasized.
He reminded the head of the parliamentary finance committee, Daniil Hetmantsev, that the road to hell is paved with good intentions, and recommended him to “ruin the whole economy” on his own.
“God grant him health, and God grant the country to survive it! (…) It’s a shame for the State,” summarized the head of the AllSeeds group of companies.
Allseeds Group is one of the five largest Ukrainian producers and exporters of vegetable oils and meal. It owns an oilseed processing plant with a capacity of 2200 MT per day of sunflower seeds (or 1500 MT per day of rapeseed or 1 day of soybeans), which is located in the port “Yuzhny” (Odessa region).
Allseeds also provides transshipment services for vegetable oils and oilseed meal at its terminals in Yuzhny. The capacity for simultaneous storage of vegetable oils is more than 100 thousand tons, and of oil meal – 30 thousand tons.
In January-September 2024, MHP, Ukraine’s largest chicken producer, reduced sales of sunflower oil by 11% compared to the same period in 2023, to 330.24 thousand tons.
“The decline is primarily due to a change in the recipe for oilcake production, which led to a decrease in oil production,” the holding company said in a report to the London Stock Exchange.
“In January-September 2024, MHP also reduced sales of soybean oil by 9% compared to the same period in 2023, to 35.46 thousand tons.
Revenue of the vegetable oils segment in January-September 2024 decreased by 27% to $355 mln, which led to a decrease in adjusted EBITDA (excluding IFRS 16) to $42 mln compared to $71 mln in the same period last year, which the agricultural holding explains by a decline in both world oil prices and sales volumes.
“MHP is the largest chicken producer in Ukraine. The company produces cereals, sunflower oil, and processed meat products.
As reported, the company received $142 million in net profit in 2023 compared to $231 million in net loss a year earlier. The group’s revenue last year increased by 14% to $3.021 billion.
In the third quarter of this year, MHP earned $96 million in net profit, which is 75% higher than in the third quarter of 2023, while revenue increased by 5% to $773 million, gross profit grew by 47% to $249 million, operating profit by 62% to $154 million, and adjusted EBITDA by 56% to $173 million.
Ukraine processed about 861 thsd tonnes of sunflower in the first month of the new processing season-2024-2025, the lowest volume for September since 2014-2015 marketing year, APK-Inform news agency reported.
“This figure is almost at the level of the last year’s September volumes (-1%), however, the difference is that at the beginning of the season-2023/24 Ukrainian companies faced the difficulties in exporting due to the shutdown of Odesa ports, which restrained the more active increase of processing, while in the current season the main problem is the formation of the raw material base,” the analysts explained.
Experts noted that most farmers are not in a hurry to sell their products due to expectations of lower sunflower harvest in 2024. As a result, during September, the purchase prices for the oilseed increased and in early October reached the highest level since February 2022 – 22 thsdn/MT – 23.8 thsdn/MT.
At the same time, the price increase did not help to accelerate the sales of sunflower by farmers – the excitement created by the processors provoked the oilseed owners to slow down the sales in anticipation of new price records. At the same time, the increase in prices for raw materials is supported by the growth of prices on the export market of sunflower oil.
APK-Inform predicts that in 2024-2025 marketing year Ukraine can process the minimum amount of sunflower for the last three seasons – about 13-13.4 mln tonnes, which will be 11% lower than a year earlier.
Despite the negative expectations, Ukraine retained its leadership in the global sunflower oil market in 2023-2024 marketing year (MY), accounting for 42% of the global production, while Russia accounted for 29%, UkrAgroConsult, a Ukrainian information and analytical agency, reports.
The analysts referred to the forecast of the U.S. Department of Agriculture, according to which in 2023-2024 MY the forecast for Ukraine’s gross sunflower production due to higher yields was increased by 27% to 15.5 mln tonnes compared to 2022-2023 MY, and for Russia – by 5% to 17.1 mln tonnes.
The high exports of sunflower oil were achieved due to the increase in harvest. Stable operation of the sea corridor is becoming an important point for Ukraine in realization of the export potential: the country increased exports by 9% compared to 2022-2023 MY, Russia – by 10%, experts noted.
They noted that since the beginning of the war, the markets for sunflower oil have been redistributed. For Ukraine, the European Union has become the key sales destination. In addition, Turkey has reoriented its purchases from Russia to Ukraine, while India and China continued to increase Russian imports.
According to analysts’ forecast, 2024-2025 MY will be a bad harvest year for sunflower. According to the current USDA forecast for September 2024, the global sunflower production is estimated to be the lowest in the last four seasons due to unfavorable weather conditions in the key producing countries – 50.6 mln tonnes, which is 10% less than the previous season. At the same time, Ukraine is expected to reduce the production of this crop by 19% to 12.5 mln tonnes compared to 2023-2024 MY, and Russia – by 6% to 16.0 mln tonnes.
“Ukraine will retain the leadership, but the share in the global production will decrease to 41% vs. 42% in 2023/24 MY in favor of Russia – 33% vs. 29%. The forecast for Russia seems quite optimistic,” UkrAgroConsult stated.
MHP Food and Agricultural Holding, Ukraine’s largest chicken producer, reduced sales of sunflower oil by 7% to 229.27 thousand tons in January-June 2024 compared to the same period last year.
“This is mainly due to a decrease in the production of sunflower cake,” the holding said in a report on the London Stock Exchange on Friday.
“In January-June 2024, MHP also reduced sales of soybean oil by 15%, to 23.82 thousand tons, compared to the same period last year, but they remained stable compared to the previous quarter.
Revenues of the vegetable oils segment in January-June 2024 decreased by 32% to $236 mln, which led to a decrease in adjusted EBITDA (excluding IFRS 16) to $27 mln compared to $48 mln in the same period last year, which the agricultural holding explains by the decline in world oil prices.
“MHP is the largest chicken producer in Ukraine. The company produces grain, sunflower oil, and meat processing products.
As reported, the company received $142 million in net profit in 2023 compared to $231 million in net loss a year earlier. The group’s revenue increased by 14% to $3.021 billion last year.
“In the second quarter of 2024, MHP earned $29 million in net profit, up 71% compared to the second quarter of 2023. Its EBITDA increased by 40% to $153 million, while revenue decreased by 5% to $770 million. The agroholding attributed the increase in profitability to improved performance in the crop sector.
Overall, net profit decreased by 33% to $45 million for the half-year, due to foreign exchange losses of $81 million against $5 million in the first half of 2023. EBITDA increased by 20% to $280 million on a 4% decrease in revenue to $1.489 billion, driven by crop production.
MHP’s founder, majority shareholder and Chairman of the Board is Ukrainian businessman Yuriy Kosyuk.
For the first time, Ukraine will send 2,453.26 tons of sunflower oil to five African countries – the Democratic Republic of Congo, Mozambique, Djibouti, Mauritania, and Palestine – as part of the humanitarian food initiative Grain from Ukraine, the press service of the Ministry of Agrarian Policy and Food reports.
“We are fulfilling the mission of our country, ensuring food security in the world. And we are expanding humanitarian supplies, as announced by President of Ukraine Volodymyr Zelenskyy during the second Grain from Ukraine summit. We supply not only grain, but also corn, peas, and now sunflower oil. This oil will be shipped in containers from the ports of Greater Odesa,” said Deputy Minister of Agrarian Policy and Food Markiyan Dmytrasevych.
Marianne Ward, Acting Director of the UN World Food Program in Ukraine, said that more than 200 thousand tons of agricultural products will be shipped under Grain from Ukraine. Many donor countries have already joined the initiative, including Austria, Belgium, Denmark, Estonia, Finland, France, Iceland, the Netherlands, Norway, Portugal, Sweden, and Luxembourg.
Mr. Dmytrasevych emphasized the important role of the UN World Food Program in supporting Ukrainians from the frontline areas and internally displaced persons. According to him, in the near future Ukraine will transfer grain for processing to the World Food Program for the production of pasta and bread. These goods will be sent to residents of the frontline areas.
The Ministry of Agrarian Policy and Food together with the World Food Program (WFP) are sending humanitarian goods under the Grain from Ukraine program.
As reported, a total of 10 ships with more than 200 thousand tons of agricultural products were sent within the initiative to Somalia, Ethiopia, Kenya, Yemen, Nigeria, Sudan, Palestine, and Yemen.
The Grain from Ukraine initiative was launched by President of Ukraine Volodymyr Zelenskyy in partnership with the UN World Food Program (WFP) to minimize the damage caused to the global food system by Russian aggression and the attempted blockade of Ukrainian ports.
