Experts note decline in prices on Ukrainian agricultural products
MOSCOW. March 1 (Interfax) - Prices of sunflower oil in Ukrainian ports declined by 7% and prices of meal by 24% throughout February, while processing margins in some regions of Ukraine have decreased to a minimum, which puts plants at a risk of shutdowns, Ukrainian media outlets said with a reference to the British analytic agency Agricensus.
The decline is due to a price drop at main export markets. For instance, prices of sunflower oil from sellers declined on the average by $60-$70 per tonne depending on the country of origin and reached $835-$840 per tonne CIF Mersin, analysts said.
According to analysts, the market has nearly reached its peak, however, adjustments are possible in the short term, and March would be a decisive month.
At the same time, prices of sunflower meal in Ukrainian ports declined by 24% and reached $155-$165 per tonne CPT port.
"It is because the demand from the main export directions such as India, China, and the EU countries remains sluggish, and the product offer in the Black Sea region is more than sufficient in light of the existence of two major importers of sunflower oil in the region," experts said.
Prior to that, India has significantly reduced purchases of Ukrainian sunflower oil due to risks related to the crisis and switched to products from Russia and Argentine.
Traders forecast that prices of sunflower oil of the Black Sea origin will remain at the level of $840 per tonne CIF China with deliveries in March-April and prices of sunflower meal $280-$295 per tonne CIF China.
Trade sources at processing enterprises in central and western Ukraine said that margins have declined to a minimum with purchase prices of sunflower, but in some cases the margin will drop to zero considering an increase of logistics expenses.
Representatives of oil extraction plants believe that processing volumes could decrease or operations of plants could be halted if the current trend remains.
Some processers in southern regions reported that the processing margin is sufficient at the level of about $50 per tonne under the current price of both raw materials and processed products, which is likely due to minimal logistics expenses thanks to the territorial proximity to the ports, Agricensus said.