Sunflower processing may stop in Ukraine due to Russian attacks

17/04/2024 16:14

Ukrainian factories that produce sunflower oil may stop their work in the event of continued Russian shelling of energy facilities. Spring attacks on infrastructure have already led to a critical state of Ukraine's energy system.

This opinion was expressed by the analysts of the "PUSK" cooperative.

"In April, Ukraine exported 46,000 tons of sunflower, the main buyers being Romania and Bulgaria. There are very few sunflowers left in Ukraine, and this oilseed may be in short supply in May-June. However, this may not cause an increase in prices, as the prices of vegetable oils are falling on world markets: both soybean and palm oil," analysts said.

Another factor influencing the market is Russian attacks on energy. Most processing plants operate on electricity. Almost all processors have diesel generators, but switching to them is impractical given the rising cost of production.

"If Russian shelling of energy facilities continues, some plants may stop due to lack of electricity. In a critical situation, the state will provide electricity to the population, not businesses," the PUSK analytical department noted.

According to analysts' forecasts, the overwhelming number of factors will contribute to the reduction of prices in the market of sunflower and vegetable oils.

"Currently, the gross margin in processing generates either zero or a very small profit: about $10-15 per ton. Obviously, there are more factors in the market in favor of further lowering of sunflower prices. The peak price of oil crops was passed in January, if we take into account the exchange rate. The limit to which conventional prices for sunflower can fall is 15.3-15.5 thousand UAH/t, although this week factories are still offering prices of 16.6 thousand UAH/t," analysts predict.

 

By the way, last week Ukrainian sunflower prices strengthened by $10-20, the price reached $340-360/t.

Ukrainian factories that produce sunflower oil may stop their work in the event of continued Russian shelling of energy facilities. Spring attacks on infrastructure have already led to a critical state of Ukraine's energy system.
This opinion was expressed by the analysts of the "PUSK" cooperative.
"In April, Ukraine exported 46,000 tons of sunflower, the main buyers being Romania and Bulgaria. There are very few sunflowers left in Ukraine, and this oilseed may be in short supply in May-June. However, this may not cause an increase in prices, as the prices of vegetable oils are falling on world markets: both soybean and palm oil," analysts said.
Another factor influencing the market is Russian attacks on energy. Most processing plants operate on electricity. Almost all processors have diesel generators, but switching to them is impractical given the rising cost of production.
"If Russian shelling of energy facilities continues, some plants may stop due to lack of electricity. In a critical situation, the state will provide electricity to the population, not businesses," the PUSK analytical department noted.
According to analysts' forecasts, the overwhelming number of factors will contribute to the reduction of prices in the market of sunflower and vegetable oils.
"Currently, the gross margin in processing generates either zero or a very small profit: about $10-15 per ton. Obviously, there are more factors in the market in favor of further lowering of sunflower prices. The peak price of oil crops was passed in January, if we take into account the exchange rate. The limit to which conventional prices for sunflower can fall is 15.3-15.5 thousand UAH/t, although this week factories are still offering prices of 16.6 thousand UAH/t," analysts predict.
By the way, last week Ukrainian sunflower prices strengthened by $10-20, the price reached $340-360/t.
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