Ukrainian fat&oil industry had the great results over the last 15 years. APK-Inform estimates oilseeds production increased more than 7 times during the given period, sunflower output grew 6.2 times from 2.25 mln tonnes in 2001/02 MY to 13.9 mln tonnes in 2016/17 MY (forecast). Production of sunflower oil increased 6.7 times from 0.85 mln tonnes in 2001/02 MY to 5.7 mln tonnes expected in 2016/17 MY, its exports grew more than 12 times (from 0.42 mln tonnes to expected 5.2 mln tonnes).
The export geography of Ukrainian sunflower oil was widen significantly. Ukraine supplied the product to about 30 countries in 2001/02 MY and the number reached 120 countries in 2015/16 MY. India, China, Spain, Netherlands and Italy are the leading importers of Ukrainian sunflower oil and main destinations this year.
Insiders of fat&oil industry met at anniversary 15th Fat&Oil Indusrty-2016 conference to discuss results of this segment and find solutions of the current problems.
The anniversary conference gathered more than 300 participants from 25 countries in Odessa.
Traditionally, the event gathered producers and exporters, large holdings, traders, importers, forwarding agents, surveyors, logistics and inspection companies, industry associations, lawyers etc.
Syngenta being one of the leading CPP producers was the exclusive sponsor of the event. Sponsors of the event: Delta Wilmar CIS (the largest importer of tropical oils into Ukraine), INTL FCStone (financial services and tools to protect margins and manage volatility), Amadeus Marine (one of the leading Ukrainian transportation services providers), Terminal UPSS (port operator). International law firm Interlegal was the legal sponsor of the conference. The key industry association Ukroliyaprom supported the event.
Every year attention of conference participants attracts mini-exhibition. This year producers and suppliers of equipment for fat&oil industry from Germany, Turkey, Czech Republic etc exhibited in frames of the event.
It should be noted that participants of the conference had a chance to visit the opening ceremony of new tank terminal for palm, exotic oils and other high-melting products and fats.
Stepan Kapshuk, General Director of the association Ukroliyaprom opened the main conference day. “Ukraine can produce record sunflower crop in 2016/17 MY – 13.5-14 mln tonnes. Thus, the country will again be the leading global producer (5.5 mln tonnes) and exporter (4.9 mln tonnes) of sunflower oil”, – the expert told.
He added that the share of Ukraine in total world export of sunflower oil will exceed 56% in 2016/17 MY.
“Production of sunflower meal can grow close to 5.5 mln tonnes in 2016/17 MY and 4.95 mln tonnes will be exported. Therefore, the share of Ukraine in global sunflower meal trade to reach about 56.4%”, – mentioned S. Kapshuk.
Market of high-oleic sunflower and high-oleic sunflower oil was separately discussed at the conference. Sergiy Tymoshenko, Downstream Solutions Development Lead CIS in agricultural products processing, Syngenta told that Ukraine is capable enough to turn produced crude sunflower oil into premium product. He pointed that this idea needs different efforts. “Firstly, we need to market this oil clearly as rich with bioactive components that have positive influence on human health and that eco-friendly sunflower seeds served as feedstock, – explained the expert. – At the same time, we need to improve quality and layout of our sunflower oil, particularly to start to apply cold pressing, winterizing and filtration technologies and use high-oleic oil as an ingredient to improve anti-ageing properties”. Strict control of feedstock quality to avoid usage of substandard material (wet and dried seeds, with fungous diseases or containing injurious chemicals).
Evgeny Panchenko, Director of the department of seeds at the Group of companies Bizon-Tech told about joined “High-oleic program” implemented in Ukraine by Bizon-Tech and Syngenta. “The program was launched in the second half of 2015 and its main aims are to supply client with high-quality HO sunflower hybrids, provide him with agronomical support, develop solutions for complex chemical crop protection and help client to determine the quality and sell his product”, - he pointed.
Artem Skorobogatov, associated partner of InterLegal told about latest legal problems in international oilseed and oils trade. Conference participants attended with interest seminars FOSFA contracts & ASBATANKVOY charter and Work with non-resident companies in 2016-2017.
Matt Ammermann, Vice-President at INTL FCStone, Eastern Europe and Black Sea markets opened the session devoted to global oilseeds and vegoils market. “Currently Ukrainian sunflower oil FOB prices are lower than 3 year average and total about 770 USD/tonne. Sunflower oil lost its premium over other oils and this trend will prevail during the season”.
He pointed that prices for vegetable oils in the world will increase in short-term, however for sunflower oil the growth will be insignificant due to record global sunflower production. “Stronger US dollar and record production of oilseeds will have the most significant influence on global market. At the same time, possible drought in South America due to La-Nina effect and expected growth of crude oil prices to 60-62 USD/barrel can support oilseeds prices”.
Alexandra Suslova, Consultant at Agritel International told about perspective destinations for crude sunflower oil. “China will increase consumption of vegetable oils in 2016/17 MY that will exceed inner production. Sunflower oil consumption will reach 1.325 mln tonnes, thus the country will be forced to import about 0.85 mln tonnes of the product. Ukraine shipped about 620 thsd tonnes of sunflower oil to China in 2015/16 MY, thus the country was the second largest importer of Ukrainian oil after India (13%)”.
Faik Genç, AgriPro founder analyzed Turkish market of crude sunflower oil. After 2 years of decline the country will increase sunflower production in 2016/17 MY to 1.15 mln tonnes up 15% on the year. The expert pointed that Turkey reduced imports of sunflower and sunflower oil by 19% to 439 thsd tonnes and 16% to 709 thsd tonnes correspondingly in 2015/16 MY. “Consumption of vegetable oils reached 2.1 mln tonnes in 2015/16 MY including oils, fats, margarines etc. It is only 0.5% higher than year ago that is negative for Turkish fat&oil industry. Political factor was the main reason of so small growth”.
F.Genç voiced his forecast of price development in Black Sea. He expect sunflower oil prices to reach 780-800 USD/tonne FOB in November-February and increase to 830-850 USD/tonne FOB in March-April.
Development of logistics is very important for effective work of Ukrainian fat&oil industry. Thus, the conference agenda includes several presentations devoted to logistics aspect.
Dmitry Falko, Executive Manager at Terminal UPSS told that Ukrainian port terminals have prospects for development to increase transshipment volumes of fat&oil products. “Development of port terminals should include modernization of port infrastructure, higher quality of services, better price policy. Improvement of cooperation between different transport types is necessary too to form logistics hubs”.
He mentioned that currently the share of sea transport in total global volume transported is about 66%. The share of flexitanks transportation of fat&oil products is growing and can reach 30% in near future.
Andrei Kirikovich, Director at Amadeus Marine told about railway transportation. He mentioned that transportation ricks could be minimized. He divided the main risks of railway transportation into qualitative-quantitative and financial-economic. “The first group includes loss, damage or shortage of cargo, the second one includes delay and possibility of higher cost than planed”, - he explained. The expert pointed that the cargo owner can minimize all risks if all transportation process goes under control of specialists.
Pavel Mirzak, Associated Partner at Global Ocean Link covered problems of container logistics in Black Sea. He told that Ukraine increase exports of vegetable oils in containers in 2015/16 MY, sunflower oil shipments in container grew by 24%, soybean oil – by 4.8 times. “The share of Odessa port totaled 50% in January-August of 2016. It increased container transshipment by 2% during this period. Yugniy port took the 2nd place with 3.3 times growth and 34% share, Illichivsk port is on the 3rd place (growth by 50% and share 12%)”. He added that the exports of sunflower meal increased more than 5 times during 8 months due to high demand from India.
The final session covered quality and certification aspects. Evgenia Novozhylova, Director at LLC Export Sertific told about new global trade requirements in fat&oil segment. “Responsibility of food producers in terms of safety is growing. New tools for quality control are implementing”. She supposed that development and implementation of food safety management systems that can minimize risks are the most effective for producers.
Anna Platonova,
Head of the organizational committee
