Black Sea region: Development of sunseed production and crushing

Sergey Feofilov

UkrAgroConsultPrepared for the Second Seminar

“Policy Options for the Ukrainian Sunflower Sector”April 2005

GDP growth rates(Persentage change in real terms)

-8-6-4-202468

10121416

1998 1999 2000 2001 2002 2003 2004 2005

Bulgaria Ukraine Romania Russia Kazakhstan

2

Black Sea Region: Sunflower Yields, MT/ha

0,6

0,8

1

1,2

1,4

1,6

1,8

2001/02 2002/03 2003/04 2004/05 2005/06*

Ukraine Russia Romania Bulgaria Moldova

3

Black Sea Region: total sunseed production and crushing, KMT

0

2000

4000

6000

8000

10000

12000

14000

2001/02 2002/03 2003/04 2004/05 2005/06*

Production Crushing

4

Black Sea Region: sunseed production, KMT

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

2001/02 2002/03 2003/04 2004/05 2005/06*

Ukraine Russia Romania Bulgaria Moldova

5

Black Sea Region: sunoil exports, MT

0

200

400

600

800

1000

2001/02 2002/03 2003/04 2004/05

Ukraine Russia Romania

6

Sunoil production and export, MMT

0

0,5

1

1,5

2

2,5

3

3,5

2002/2003 2003/2004 2004/2005 2005/2006

0

0,2

0,4

0,6

0,8

1

1,2

Total sunoil production in Ukraine and Russia Sunoil production in Argentina

Total sunoil export from Ukraine and Russia Sunoil export from Argentina

7

* forecast

Ukraine: Forecast of the 2005 grain and sunseed production

2005* 2004

UkrAgroConsult Official statistics

Wheat 17 250 16 529 17 518

Barley 8 340 10 615 11 069

Corn 5 150 5 300 8 793

Rye 1 135 1 398 1 592

Oats 920 997 1 006

Feed peas 827 603 600

Other 1 543 865 1 140

Total grain 35 165 36 307 41 718

Sunseed 3 800 – 4 000 3 395 3 052

8

New drivers in ag production in the Black Sea countries

9

Investments in the agrarian sector

Behavior of farmers was modified

Development of export aimed infrastructure of the market

Currency exchange factor

Increase in the government support

Investments in the agrarian sector

10

Growth of input usage

Lower dependence on weather

Stabilization of production

Increase in grain export potential

Ukraine: Wholesale prices for heavy fuel

11

Black Sea Region: Main operators of sunseed/sunoil market

Ukraine / Украина Russia / Россия

Зерноторговая компания Русагро

Каргилл Солнечные продукты

Бунге Астон

Евротек Юг Руси

Запорожский МЖК ОГО

Одесский МЖК Нижегородский МЖК

Пологовский МЭЗ WJ

Кернел Групп Эфко

12

BULGARIA

Stockholder Edible oil producers

Bunge – 40% of the market

Unirea SA in Iasi (Eastern Romania)

Muntenia SA in Buchapest

Interoil SA in Oradea (Western Romania)

Argus (Romanian) – 20% of the market Agrus factory in Constanta

Cargill – 17% of the market Olpo Ulei SA in Podari

Olpo Ulei SA in Craiova

Suntory Agrochemical Agricover SA

ROMANIA

Stockholder Edible oil producers

Bunge – 30% of the market Kaliakra in Dobrich

Papas Olio – 23% of the market Oil plant in Yambol

Biser Oliva – 18% of the market Oil plant in Balchik

Niva – 10% of the market Plant in Stara Zagora

Zlatna Trakia – 3% of the market Plant in Kostinbrod

13

Government support to the Ag Sector

14

Cheaper credits and insurance

Direct payments per hectare

Large investment in export logistics

Exchange rate of USD to UAH

15

Exchange rate of USD to RUR

16

New markets

17

WTO joining

Closer to consumers and lower freight rates

Ukraine: Sunoil export in 2003/04 season

EU 25 36%

Others 10%

Switzerland 26%

CIS 15%

N. Africa & Near East 13%

18

Ukraine: Sunoil export in 2004/05 season (September – January)

N. Africa & Near East 23%

Others 1% EU 25

43%

Switzerland 12%

CIS 21%

19

Ukraine: Sunoil export in 2003/04 season

EU 25 36%

Others 10%

Switzerland 26%

CIS 15%

N. Africa & Near East 13%

20

Argentina: Sunoil export in 2003/04 season

EU 25 29%

N. Africa & Near East 16%

S. & N. America 18%

Russia 3%

China 5%

Others 18%

India 12%

21

Argentina: Sunoil export in 2004/05 season (September - January)

Others 23%

EU 25 27%

N. Africa & Near East 21%S. & N. America

19%

Russia 2%

India4%

China 4%

22

Ukraine: Crushing margins, $/T

-5

5

15

25

35

45

55

65

75

85

95

105

115

125

135

09.2

003

09.2

003

10.2

003

10.2

003

10.2

003

11.2

003

11.2

003

12.2

003

12.2

003

01.2

004

01.2

004

02.2

004

02.2

004

03.2

004

03.2

004

04.2

004

04.2

004

05.2

004

05.2

004

06.2

004

06.2

004

07.2

004

07.2

004

08.2

004

08.2

004

09.2

004

09.2

004

10.2

004

10.2

004

11.2

004

11.2

004

12.2

004

12.2

004

01.2

005

01.2

005

02.2

005

02.2

005

03.2

005

Domestic operations

23