Moldovan Agriculture and Food Minister Vladimir Bola will meet on Monday with sunflower seed producers and processors due to the difficult situation in his country with sunflower oil production. According to the Moldovan news agency Infotag, the decision to discuss the problem was made after Floarea Soarelui, the largest oil producer, shut down two plants. The producers said they had no raw materials, as farmers refused to sell their seeds at the current market price, and sunflower imports are strictly licensed.
“Today, Moldova’s sunflower seed stocks are about 350 thsd tonnes, so any statements about lack of stocks are speculation. At the same time, the pricing policy should be objective, fair and responsible towards the end consumer,” Bola wrote on Facebook.
He emphasized that “by abandoning political statements and relying solely on the economic component,” the Ministry of Agriculture of Moldova will provide a platform for dialogue between seed producers and processors.
“Each party will provide real figures so that we can make decisions and find viable solutions for the new sunflower harvest,” Bola said.
As reported, Moldova has extended the licensing of sunflower seed imports from Ukraine for three months.
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.
Production of sunflower seeds in the 2022/2023 marketing year (MY, September-August) is projected at 9.4 million tonnes, which is 42.6% less than the previous MY (16.4 million tonnes), while their exports will decrease by approximately 41.2%, to 1 million tonnes from 1.7 million tonnes.
Such data were announced by Stepan Kapshuk, Director General of the Ukroliyaprom Association, during the online conference “Ukrainian oilseed market: optimistic or pessimistic forecast” on Thursday.
Thus, this MY is expected to reduce production of sunflower seeds to the lowest value in ten years, which is even lower than in 2013/2014 MY with 11.5 million tonnes. This decrease is caused by the Russian military invasion into Ukraine, the temporary occupation of part of its territory, and logistical problems associated with Russian aggression.
The head of the association stressed that in 2022/2023 MY, oilseed exports are expected to decrease by 10.6%, to 5.1 million tonnes from 5.71 million tonnes in 2021/2022 MY, including sunflower seeds 41.2%, to 1 million tonnes, and rapeseed by 4%, to 2.6 million tonnes from 2.71 million tonnes. However, soybean exports are expected to grow by 15.3%, to 1.5 million tonnes from 1.3 million tonnes in 2021/2022 MY.
According to Kapshuk, in general, in 2022/2023 MY, production of oilseeds in Ukraine is projected at the level of 14.86 million tonnes, of which, in addition to indicated 9.4 million tonnes of sunflower seeds, 2.87 million tonnes account for rapeseed, and 2.59 million tonnes for soybeans.
At the same time, it is expected that in Ukraine 95.7% of produced sunflower seeds – 9.0 million tonnes, 38% of soybeans – 1 million tonnes, and 7% of rapeseed – 200,000 tonnes will be processed in 2022/2023 MY.
According to the Director General of Ukroliyaprom, in 2022/2023 MY, Ukraine will produce 4.0 million tonnes of sunflower oil, while 4.2 million tonnes will be exported, of which part will be sent from transitional stocks left over from the previous period. These figures are lower than those of MY 2021/2022 with 5.2 million tonnes of oil produced and 4.3 million tonnes of exports, and are comparable to the indicators of MY 2013/2014 (production – 4.6 million tonnes, export – 4.19 million tonnnes).
