As of 1 February 2022, 46% of Ukraine’s total sunflower stocks were in areas where fighting against Russian invaders has been almost continuous. Given the significant damage to infrastructure, some of these stocks could be lost. But the oilseed reserves and processing capacity located in regions outside the area of armed conflict may well be sufficient to supply the country’s entire population with oil by the end of the current marketing year and even partially resume exports of this product.
“Subject to the resumption of work of processing enterprises in the eight safest regions today in the west and partially in the centre of the country (also excluding the Poltava and Dnipropetrovsk regions), the processing of a total of about 400-450,000 tons of oilseeds per month is possible. According to rough estimates and depending on the type of processing and the company’s workload, this is about 130-160,000 tonnes of oil, which is more than sufficient for domestic consumption. According to our estimates, the consumption volume of sunflower oil in the domestic market has not exceeded about 45,000 tonnes per month since the beginning of the current season,” APK-Inform analysts noted.
However, a significant problem remains the logistics, the availability of fuel, the willingness of farmers to sell raw materials and the willingness of processors to participate in the work.
“At the same time, in our opinion, it is possible to resume the export of Ukrainian oil across the western border towards EU countries, which can be provided by rail transport,” experts say.
It should be noted that according to monitoring data from APK-Inform, in early March, some processing companies in Ukraine, which are not in the active conflict zone, have already resumed buying sunflower seeds. Market participants noted an increase in offers of oilseeds from agricultural producers, but the volume of offers was low.