Bulgaria extends import ban on Ukraine's SFS
02.10.2023 (Argus Media) - Bulgaria has extended its import ban on Ukrainian sunflower seed (SFS) until the end of November. But Ukrainian companies continue to make deals with Bulgarian buyers, awaiting the resumption of trade in December, supported by the local crushing industry's needs.
The decision followed an agreement between Bulgaria's government and the Farmers' Initiative Committee, according to Bulgaria's agriculture ministry. The country is expected to lift the ban on SFS, wheat, corn and rapeseed imports from Ukraine in December, when a licence regime for these products has come into force, according to a plan agreed between Ukraine and the European Commission.
The Bulgarian government had said earlier that the country would not resume its imports of Ukrainian SFS until a quota is agreed with Ukraine.
Ukrainian farmers are awaiting the opening of the Bulgarian market amid a significant drop in local prices last month. Bulgaria was the second-largest importer of Ukrainian SFS in the 2022-23 marketing year (September-August), receiving 493,100t, according to customs data. It took 616,200t in 2021-22 and 104,200t in 2020-21.
Bulgarian processors are interested in Ukraine's SFS imports, as local production fails to meet demand from the crushing industry. Bulgaria's SFS crushing capacity is 3mn-4mn t/yr, while local production reaches a maximum of 2mn t, according to Ukraine's oil and fat industry, represented by the Ukroliyaprom association.
"Crushers operating at more than 90pc of their capacity have significantly reduced production costs and local [SFS] cannot provide this high processing pace, hence the need to import," the chief commercial officer of Kyiv-based Spike Brokers, Oleksandr Solovey, told Argus.
Ukrainian companies continue to conclude contracts for SFS exports to Bulgaria despite the extension of the import ban.
"We have so far brokered deals for about 30,000t of Ukrainian SFS to Bulgaria at an average price of $380-440/t on a delivered to Bulgarian crushing plant basis, and buyers are ready to wait for these volumes to be delivered after the quota and licensing regime comes into force," Solovey said. Bulgarian processors are willing to extend their contracts and price is not an issue, because they need Ukrainian SFS to keep their crushing plants running at the most profitable pace, he added.
Given this, Ukroliyaprom expects Ukraine's exports of SFS to Bulgaria to reach at least 500,000t in the current marketing season.
By Kristin Yavorska
Ukraine's SFS exports to Bulgaria 000't
