Losses of sunflower seed production to not affect the oilseed processing capacities in Ukraine - expert
In the current season Ukraine to harvest the record crop of sunflower, but owing the putting into operation of the new facilities for its processing the competition to be hard on the raw-material market, but as it always is.
Thus, the Bunge Ukraine analyst Alina Fedyay has provided us with the brief estimation of the sunflower and sun oil general production and the Ukrainian market prospects in 2013/14-season.
- Bunge is 200 year old company. But kindly ask you to tell us few words about it and provide us with few historical facts impacting its development.
Bunge company was based in 1818 in Amsterdam as the family business and since the beginning has being specialized in grain trade. In 1859 company has moved its head office to Antwerp, and in 25 years – to Argentina, where the company parlayed on the advantages of the growing agrarian market. In few years the Bunge company has moved its head office to Brazil and improved one's positions in the Northern America, Asia, Australia.
In 1990s the company specialized on agriculture and food production. In 1999 the company's head office was moved to White Plains (New-York, USA). In 2001 the company's shares entered the NYSE.
In 2002 after the purchasing of Sereol company actives Bunge has entered the Eastern European market by focusing on Ukraine as the country with high production and export potential.
To date Bunge carries out its activities in 40 countries, and the headcount is over 35 thsd.
- What are the sun seed processing capacities of Bunge in Ukraine and how fully loaded they were in 2012/13 MY? Does the company plan to improve capacities (upgrade the current plants or to build the new ones)?
The capacities of Dnepropetrovsk oil-extracting plant of sun seeds processing total nearly 480 thsd tonnes annually. Due to the fact the cumulative processing capacities of the current market players exceed the sun seed crop in 2012/13 MY we had been working under the hard competition conditions. Note we reached the planned volumes of processing.
As for further development of the company, note in spring 2013 we announced about the start of the large investment project – on the territory bordering the current grain terminal Bunge in Nikolayev commercial port we plan to build the modern plant for oilseeds processing (planned capacities – 2400 tonnes oilseeds per day) and to improve the current capacities of the grain terminal (to 5 mln tonnes annually).
- Please provide your prospects of the sunflower current crop in Ukraine. How will the weather conditions being during the harvesting campaign impact the oilseed general production and qualitative parameters?
This year we expect the sun seed record crop: as of to date the Ukrainian market works with the level of 9.5-11 mln tonnes, and our estimation is nearly 10 mln tonnes.
As for the weather negative influence during the harvesting campaign note the September rains caused the crop loss but insignificant to impact the good forecasts.
The same situation is with oil seeds quality: the moisture excessive content to increase the acid value. But to date the stated rate is within the error margin. But in further the oil seeds quality to depend on the storing conditions.
- Will there be any loss of the general production due to the sunflower qualitative parameters worsening? How is it to impact on the loading capacities charge?
According to our estimation despite the record crop the current capacities charge to remain at the level of 80%. It is due to the putting into operation nearly 1.5 mln tonnes of the new processing capacities.
- What will be the sunflower world distribution in the new season? If to consider the sunflower market in 2013/14 MY in the Black Sea region what is the share of Ukraine?
We forecast that the Black Sea region to harvest nearly 75% of seeds, Argentina – 10%, and the rest 15% - EU countries. In the current MY the share of Ukraine to total nearly 44% from the sunflower crop in the Black Sea region.
- What are the sun oil global and Ukrainian production and exports rates?
Sun oil global production to total 15 mln tonnes, and the share of Ukraine is 29%. Meanwhile the world trade rate to exceed 7 mln tonnes with the Ukrainian one – 50%.
- What will be the price trend development on the sun seeds and oil market in 2013/14 MY? What will be main influencing factors?
On the one hand the sunflower price is being held by the oil export price the stable one and having the limited potential to grow. On the other hand there is the hard competition on the market between the processors which is the limiting factor for the prices for sunflower.
Interviewed by Elena Cherednychenko
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