The MENA region is perspective for Ukrainian oilseeds products. In September-April 2015/16 MY, Ukraine shipped 563 thsd tonnes of sunflower oil (19% of total export) to this direction and 621 thsd tonnes of sunflower meal (23.5%). Capacity of this market is high and Ukraine can increase export volumes. Marketing director of Viktor & K company, Ivan Vanenny told about prospects for Ukraine and feutures of trade with MENA countries.
- Viktor & K company sells sunflower by-products on both domestic and export markets. How did the structure of export change during several recent years? Which market is the most prospective and why?
Our company increased the exports of finished products, supplied to the foreign markets. In particular, export of bulk and packed sunflower oil. At the same time, the share of export under customers’ trademarks increased in the segment of bottled oil. In addition, we significantly increased sunflower meal export.
I consider China, Middle East, South-West Asia and Africa countries to the most perspective for us.
- You trade with MENA for many years. Taking to account your experience, is this market perspective? How strong is the competition?
We can increase exports to this destination in several times. Demand for basic products, and for vegetable oils in particular, is high and stable and the market capacity is large, it will take a lot of time to reach saturation point despite even strong competition. Ukrainian and Russian producers are our main competitors. Moreover, Turkish suppliers can bring prices down as they engage in predatory pricing offering mixes of cheaper vegetable oils.
- Which requirements the MENA region does have to imported products, in particular to sunflower oil and meal? Have you faced any difficulties?
High quality of the products is the key requirement. In some cases buyers need product to correspond to Islamic canonical norm, I mean additional certification of halalness (our company has this сертификат). To provide special original label and strictly follow delivery terms is also needed.
Today, we almost do not have any difficulties working with this market.
- How can you estimate dynamics of Ukrainian sunflower meal consumption in general in 2015/16 MY? What are your expectations for nearest future?
Due to high protein level, Ukrainian sunflower meal is of high demand. Thus, dynamics is very positive, despite high price competition. Until recent time, Belarus was the most interesting market of meal export for us. However, as Rosselkhoznadzor advised to avoid Ukrainian meal, as there are several attacks of ASP, we had to redirect our market outlets.
- How can you comment on price trends of the current season? What main factors can you point out?
Prices for crude vegetable oil and packed products were formed under influence of inner and external factors such as feedstock prices, currency rate and futures prices. Feedstock prices were formed under influence of fuel prices. Due to these factors price for sunflower oil varied during the season between 3-5% of price announced at the beginning of the season. For meals, price decline sometimes reached 30-33%.
- Last time we see higher volumes of Ukrainian agricultural product going to Iran. Is this country interesting for you?
Iran is very interesting destination for us. However, there are several difficulties. I mean current system of state tender purchases offering fixed prices. It is impossible taking to account our economic situation.
- How the situation on the export market of oils and meals will develop in 2016/17 MY? What directions will override export next season?
- I can suppose that next season Ukraine will keep on increasing exports of oilseeds by-products mainly on account of higher production of soybean oil. It happens due to rather low price leading to higher demand on this oil.
Economy situation and market trends will influence export. 2015/16 MY showed that we can not be secure against black competition from other countries.
- Tell us about plans of our company.
In the 2nd half of 2016 we plan to launch capacities to produce refined soybean oil, including bottled oil. Moreover, soon we start to produce high-protein soybean meal and crude soybean oil.
In addition, we plan to enlarge capacities for refining of sunflower oil that will turn us to one of the biggest producer of refined sunflower oil in Ukraine.
Reference
Private enterprise "Viktor & K" was established in December 1992. Production of sunflower oil is the main activity of the company. In February 2002, the company registered trade mark "Королівський смак" (Royal Taste).
Its capacities are located in Kirovohrad oblast and total 1500 t/d.
Today Viktor & K is a powerful and responsible manufacturer of such product groups as mayonnaise, sunflower oil (bulk, bottled 500-9500 ml), catsup, mustard, butter, spreads, vinegar, tomato sauces, halva, pasta, canned peas, corn and so on.
Interviewed by Victoria Zelenaya, APK-Inform Agency
