The war in Ukraine forces oilseed processors to change production and logistics




The war in Ukraine has led to changes in logistics chains, production, and processing of agricultural products. In particular, one of the major players of the Ukrainian oilseed market specializing in sunflower processing – OptimusagroTrade – started processing rapeseed. This was announced by OptimusagroTrade deputy General Director for commodity flows, Roman Suzak, at the XXI International Conference “Fat&Oil Industry-2023”, which is being held on October 23 in Lviv.

He said that 40% of the company's elevators (which are 11 enterprises) were located in temporarily occupied territories or in the war zone.

“Due to the fact that the company's oil extraction plant is located in the city of Zaporizhzhia, sunflower seeds were purchased in the southern region. After the occupation of our grain elevators in the Kherson and Zaporizhzhia regions, the geography of purchases was changed… The idea to start processing rapeseed was due to its seasonality. Rapeseed harvest begins in July, sunflower seed – in September. The difference is 2 months. At a time when the enterprise is standing still due to the lack of raw materials (sunflower) in the region, there is an opportunity to purchase/process rapeseed and continue to work in military conditions,” R. Suzak explained.

Among other reasons, he cited low competition among rapeseed processors in the region; marginal processing of this oilseed; favorable price conditions and high demand on the market for rapeseed processing products.

“A certain challenge was the low quality of raw materials – before the start of the project, it seemed that the amount of rapeseed was sufficient. But when we started to take samples and test the available rapeseed in the region – half of it did not meet the quality indicators. The spectrum of the offer began to narrow,” R. Suzak remarked.

The speaker specified that the capacity of the rapeseed processing enterprise is 1.200 tonnes per day. In the current year, 43 thsd tonnes of rapeseed were already processed, from which 20 thsd tonnes of rapeseed oil and 23 thsd tonnes of meal were produced. Products are exported to Europe and Asia (50/50). The main buyers are biodiesel producers.