Ukrainian oilseed processing enterprises are massively reorienting to rapeseed and soybeans or stopping production due to the shortage of sunflower and its high cost, which remains at the level of 33-34 thousand UAH per ton. This is reported by Latifundist.
“At this price for sunflower, there is no processing margin. For many plants, it is really more profitable to stand still than to process. When the plant is standing still, it has fixed costs – conditionally $9–10 per ton. These are employee salaries and other fixed costs… why generate a minus of $20–25, if you can generate a minus of $9–10 and stand still,” emphasized Serhiy Repetsky, co-founder and partner of Sunstone Brokers.
According to him, under current conditions, stopping production for some oil mills is “economically more logical than working at a loss.” Processors who do not want to buy sunflower at high prices are switching to rapeseed residues, because the price of rapeseed oil on the Polish border allows them to work with a profit.
“There is no margin to buy at such prices (sunflower – ed.). Or those factories that have a longer value-added chain with integrated meat or milk businesses can afford it,” — added Repetsky.
Currently, sunflower residues are mainly concentrated with farmers of the so-called “middle class.” It is expected that in the first half of June these residues will be finally sold due to the start of harvesting the new crop of rapeseed and barley.
