Features of the national oil and fat industry
Pernnel Bugaard, head of Food & Agri Europe, ING Bank, noted that Ukrainian companies show a positive trend towards increasing capacities for the production and processing of sunflower seeds.
Our country made such a successful leap in just ten years. In 2007, the leader in sales of sunflower oil was Argentina – a country with a warm climate and a large number of suitable land for development. Now more than half of the world’s product is produced and processed in Ukraine by domestic companies.
Positive aspects that stimulate production are the high profitability of domestic sunflower and the firm position of the supplier on the international market. However, there are a number of problems, among which the main one is the presence of cheaper analogues that can displace quality but expensive sunflower from the food market. The main competitor of domestic products, according to Peter Bugaard, can be cheap palm oil. Also, the price falls on other types of edible oils, for example, olive oil.
The second serious factor is Russia, as a competitor in the world market. A new modern terminal in Novorossiysk could be a serious blow to the economy of Ukraine.
Artem Hammerschmidt, leading analyst at OilWorld corporation, expressed the most probable positions in 2017-2018: the volume of sunflower produced will grow in a number of countries:
- Argentina (0.5 million tons)
- Turkey (0.2 million tons)
- China (0.1 million tons)
- Russia (0.1 million tons)
- At the same time, Ukraine and Canada will reduce production and processing.
Sergei Feofilov believes that in order to stabilize the situation, Ukraine must create and actively promote in the world market domestic products as a standard-class of edible oil for 5-8 years.