Ukraine's Top Sunflower Oil Producer Expects Significantly Lower Production And Exports

Foreign media, April 6: Ukraine's largest sunflower oil producer said the country, the number one exporter of sunflower oil, will face the prospect of significantly lower production and exports.

Ukrainian farmers are starting work on spring planting, which could see a 20 percent drop in planted area and a drop in production, Kernel Holding CEO Ivgen Osipov said Tuesday.

Total grain and oilseed production could be up to 60 million tonnes, compared with more than 100 million tonnes the previous year, Osipov said. In addition, supplies from the previous year had difficulty leaving the country because of the port blockade. Ukraine is trying to improve logistics to get crops across its western border, but export capacity is only about 10 per cent of normal seaborne trade.

The disruption of sunflower oil exports from Ukraine has the potential to accelerate global food inflation. Sunflower oil buyers throughout Asia and Europe have had to turn to alternatives such as soybean oil, rapeseed oil and palm oil. But supplies of these vegetable oils have also been constrained by weather problems and labour shortages, sending their prices to dizzying heights.

Osipov said there would be a huge backlog of stocks in Ukraine, while there were no stocks or goods outside of Ukraine. This would be very damaging to global food security and would also be a problem for Kernel and Ukrainian farmers in terms of lack of financial liquidity. So far, Kernel's infrastructure has remained largely in good shape. Osipov added that it is very difficult to source sunflower oil from elsewhere as Ukraine is the only supplier of sunflower oil.