Ukroliyaprom hopes to increase processing volumes oilseeds
Head "Ukroliaprom" S. Kapshuk shared his vision of the trends of the market of oilseeds in Ukraine and ways of development of the processing industry.
Ukraine exports sunflower oil in 120 countries. A major buyer is India, which during September-October gained 43% of the volume of exports of Ukrainian crude sunflower oil. However, the Indian business is interested in purchasing of Ukrainian sunflower for processing it in-house facilities. This is evidenced by the increase in 01.11.17 import duty on unrefined sunflower oil to 25%. But considering the increasing population of India and growing demand for sunflower oil, the increase of import duties will lead to reduction of export of oil from Ukraine.
We insist that Ukraine needs to process agricultural raw materials itself, and to external markets to supply products with high added value. The export duty on sunflower seeds will create a powerful oligopyrene complex, which became the basis for the agricultural sector. There is a certain balance of the economic interests of the state, farmers, processors and domestic consumers.
After the abolition of the simplified VAT regime farmers are trying to sell sunflower seeds for cash, which leads to the transition of the market into the shadows, which negatively affects the processing industry. Selling shadow schemes, almost 30% of made in Ukraine sunflower reduces the tax revenue in the budget, changes the balance of supply and demand, increases competition between processors reduces the profitability of processing, what suffers is honest business. Ukraine is losing its investment attractiveness.
Despite the decline in the prices of crude sunflower oil in the season 2016/17 production of refined sunflower oil in comparison 2015/16 increased by 130% and exports by 160%.
Simultaneously, there is increased competition on the market of sunflower oil from Russia, which is dumping the price of 20-30 $/t. While Ukraine keeps the leadership with its high quality oil and a significant share in world exports (56-57%).
Low demand for sunflower meal in Ukraine due to the reduction in the livestock industry. Previously, he was actively buying Belarus, which now prefer cheaper Russian meal. However, the high nutritional value of the Ukrainian meal allows you to open new export markets, one of which is China, where there is powerful development of poultry and livestock.
Active export of soybean and rapeseed does not allow you to upload your own refining capacity by more than 14-20%. The increase in volumes of processing of oil will allow Ukraine to create new jobs, increase budget revenues and to make large profits due to the export of products with high added value. Good demand for soybean and rapeseed oil will allow to expand the geography of exports of these oils not only to traditional Poland, China, India and the EU but also to other markets.
fat-and-oil complex of Ukraine consists of the developed structure of the grain elevators, processing plants, logistics centers and sea ports, which allows Ukraine to continue to develop in this direction and remain a world leader in the export of vegetable oils and meal.
it is Important to create conditions for development of own processing of oilseeds by increasing export duties or abolition of VAT refunds for exports of agricultural raw materials.