Prices on the world market of sunflower oil have decreased, but the trend has not yet manifested itself in Moldova, IPN reports, with reference to Iurie Rija, executive director of the Association of Exporters and Importers of Agricultural and Cereal Products “Agrocereale”.
Even if prices have fallen by 5 percent on the world’s commodities exchanges the last two weeks, which means a reduction of US$40, from US$860 to US$820 per tonne, during the winter holidays oil in Moldova is sold at the same prices as earlier. Iurie Rija says that the pessimistic trend for producers will continue, influenced, in particular, by the actions of the two major players in the Black Sea Region, Ukraine and Russia.
In December 2023, when Russia threatened to attack ships heading to/from Ukrainian ports, almost 672,000 tonnes of sunflower oil were exported from the neighboring country, up 25%compared with the November figures, being the highest monthly volume transported since January 2022. Also, according to preliminary data, Russia exported more than 10.5 million tonnes of oil in 2023, which is by 29% more than in 2022.
The domestic producers are also affected by the Brent oil quotations, which returned again to the “bear” trend, ranging between US$76.6 and US$77.3 per barrel. A fall to US$73.6 per barrel of Brent is anticipated, says Iurie Rija.
As for the domestic market, from January 4, 2024 traders in the central regions have offered on the spot 6.45 lei/kg with VAT, which is equal to US$340 per tonne without VAT, the factory in Balti - at 6.725 lei per kg with VAT (equal to US$355 per tonne without VAT). However, according to the forecasts, a decrease of at least 0.10-0.15 lei per kg of sunflower will follow, in line with global changes in sunflower oil prices on world markets.
Under the circumstances, Moldovan farmers are tempted to look over the Prut River, where, for example, “Prutul S.A. Galati” purchases sunflower brought to the factory at a price of US$398 per tonne, but its transportation from the central regions of the Republic of Moldova to the destination is about US$65, which makes the business unprofitable.
Looking even further, the prices in Bulgaria under DAP conditions (delivery/unloading at the place set by the factory) lure with US$440 in Dobrich, but export is possible only with a license and this creates other impediments.
Another negative factor is the shortage of transport, but some traders (Ancom Agro SRL, Anvar-com SRL) have resorted to a new method of transporting sunflower seeds - by packing them in large bags, using tarpaulin trucks, which previously went empty in the direction of Bulgaria/Turkey.
In the complexity of these circumstances, domestic agricultural producers should manage their raw material reserves more efficiently. But the vast majority of them do not catch the moment and miss the period of the best price, preferring to store their products in the hope of obtaining an even higher price, while a drop is already looming on the world commodities exchanges.
And when the actual price falls and sales are marked by despair. For example, in the second half of December, when sunflower prices rose above RON 7 per kg, the market did not witness a maximum supply. This highlights the importance of a more strategic and prudent approach to supply management. Agricultural producers should actively take into account global market trends and, most importantly, take proactive measures when there are indications of possible price reductions to minimize losses and maximize profits, says Iurie Rija.
