In the current season, the fat-and-oil industry of Ukraine has faced many challenges (change of the government, significant national currency fluctuations, the COVID-19 pandemic), which in fact have also affected other branches of economy. All these factors considerably and often unexpectedly influenced the work of the industry.
At the same time, all these challenges changed the market, opened new possibilities and created new conditions for business. How the leaders of the fat-and-oil industry cope with the difficult times and adapt to the new realias APK-Inform Agency asked the owner of GradOliya, Stanislav Tarshyn.
— Stanislav Ivanovich, how do You estimate the work of the fat-and-oil industry of Ukraine in 2019/20 MY?
The season has not finished yet, so it’s early to talk about some specific figures and results, but Ukraine remains the largest global exporter of sunflower oil. For 6 months of the season-2019/20, the production of refined sunflower oil increased by 24% year-on-year, and the exports of the product with the maximum added value — bottled sunflower oil — up 27%. According to the preliminary forecasts, in the current season we can expect for the production of refined sunflower oil to reach 900 thsd tonnes. It is a new record, despite the challenges the producers had to face. In this case, I refer to the change of the government, significant fluctuation of the national currency, the COVID-19 pandemic, which had and still have a great impact on the performance of any business in Ukraine, not only of the fat-and-oil industry.
— Can You say that the COVID-19 pandemic affects the work of Your enterprise and the industry in general?
We can say that with the pandemic the market conjuncture has become absolutely unpredictable: the price changes and S&D changes did not give a chance to forecast the selling of the product and purchase of the raw material. Generally, the pressure of the COVID-19 pandemic on the food industry can be defined as moderate compared to other industries. Now we can see the postponed demand on our products caused by the implemented quarantine measures in our main consumer markets, which stipulates the demand rise.
Despite the forecasted record production volumes in the fat-and-oil industry in the current season, I know that some oil extraction plants had to reduce the processing volumes and even halt the operations, because of the unpredicted market conjuncture, and in some point inconsistency of prices for raw materials and the finished products.
— Your company exports the products to the EU, Asia and Middle East. Have there been any changes in the requirements of the countries-importers to the Ukrainian fat-and-oil products and conditions of their delivery amid the COVID-19 pandemic?
We export the products to more than 45 countries around the world, and faced no changes to requirements to the product, due to the pandemic. I can only say that some countries implemented the strict restrictive measures and closed the borders and ports for the imports of the products, but there are few such cases. We actually know only 2 such countries, but it did not significantly changed the business and the exports of the products.
— Taking into account all the factors that You named, the geography of Your products delivery should not change.
Indeed, the pandemic did not change the geography of the delivery of our products. But I should note that because of the quarantine some countries had to find alternative or new sources of food supply, which allowed us to open new distribution markets. In this case, the COVID-19 pandemic opened for us new possibilities for the growth.
— According to our data, due to the reduced sale volumes of packed products on the international markets, some companies had to focus on the domestic market, which is already experiencing the surplus. Have You had such difficulties?
Our company has always been focusing on the exports only. We are nearly absent on the Ukrainian market. In 2019/20 MY, we plan to increase the sales of packed products in 2.5 times (from 14.8 thsd tonnes to 35 thsd tonnes).
We do not plan to reduce the volumes of oilseed processing, and all production indicators should be met without significant deviations from the plan.
— How will the COVID-19 pandemic influence the work of the industry in the short- and mid-term perspective?
I believe that in a short-term perspective, the effect of the COVID-19 pandemic will be negative, but in the mid-term perspective such events lead to reformation of the market and opening of new possibilities and prospects for those companies, which manage to adapt to new conditions of the business.
Interviewed by Anna Platonova, APK-Inform Agency
