Ukraine crisis, sunflower stocks at risk

Cereal Docks shares the concern expressed in recent days by FEDIOL, the European federation that brings together the associations representing the vegetable oil and protein flour industry, and by ASSITOL, the Italian association of the oil industry, who have made remarks about the situation of serious difficulty caused by the war in Ukraine, which might have consequences along the entire production chain up to the final consumer.

The seed oil industry is particularly affected, particularly the sunflower segment, whose annual consumption in Italy is around 700 thousand tons compared to an Italian production of about 250 thousand tons of crude oil. According to ASSITOL, if the current trend in consumption will be confirmed, Italian stocks will run out within a month.

The conflict is in fact causing problems in the supply of raw materials and, consequently, in the execution of existing contracts for the sale of sunflower seeds and oil. The closure of major ports on the Black Sea has blocked the trade of the two largest sunflower producers in the world: Ukraine and Russia, which supply European industry, including Italy, exclusively by sea.

The ships carrying oil or sunflower seeds are all stationary, particularly at Mariupol and Odessa, nerve centers of ocean shipping. The sunflower is an essential crop for numerous production areas of the Italian economy, food but not only: ranging from oil, used in the food industry, to flours for zootechnical use, up to oleins, essential for the oleochemical and energy industry, for example for biodiesel production. It is also used in the production of preserves, sauces, condiments, all products intended for large food distribution. The Horeca sector uses it for frying, large commercial distribution offers it bottled on the shelf, while its derivative, sunflower lecithin, is used in the confectionery and bread-making sector, up to feed for animal husbandry.

For years, to find its missing quantities, the Italian sector has mainly turned to Ukraine which, together with Russia, represents 60% of world sunflower oil production and about 75% of world exports of this product. According to data processed by ASSITOL, starting from 2015, thanks to the increase in consumption, the share of imports of crude oil from Ukraine has grown, passing from 54% to 63%.

From the beginning of the conflict to today, ASSITOL estimates that at least 50,000 tons of crude sunflower oil are still in Ukrainian ports and never reached Italy. A difficult situation to resolve even if the war ceases in the next few days, which risks becoming even more complicated if the conflict continues until the next sowing period, scheduled for spring.

In order to be able to diversify supplies, at least in part, the companies ask for time and the Associations invite to avoid measures that could affect the oil companies, already in considerable difficulty. “We invite the institutions to act reasonably – declared Carlo Tampieri, president of the ASSITOL seed oils group -. Any sanctions, such as duties or, worse, import bans, would be harmful not only for our sector, but for the entire Italian agri-food chain, at the same time causing a strong negative impact on Ukraine “.

 

Read the press release from FEDIOL, COCERAL and FEFAC