IKAR in Mass Media

RUSSIAN SUNFLOWER SURPLUS MAY TOTAL 1 MLN TONNES IN 2005

10 ноября 2005 года

Interfax, November 10. The surplus of sunflower seeds on the Russian market in 2005 may total 0.8-1 million tonnes, said Dmitri Rylko, General Director of the Institute for Agricultural Market Studies (IKAR).

"The 0.8 million-1 million tonne surplus supply of sunseeds is putting pressure on the vegetable oil market and the sunflower market, and agricultural producers are turning out to be the most vulnerable in this situation," Rylko said.

The current situation on the market is the result of a record harvest of sunflower seeds this year, he said. IKAR has estimated that the harvest will be 6.2 million tonnes in 2005 against 5.3 million tonnes in 2004. As a result, producer prices on sunflower seeds dropped to 4.7-4.9 rubles per kilogram ($140 per MT) at elevators in southern Russia and even lower in more Northern regions. IKAR's calculations show that the full prime cost of sunflower seeds for a group of farms - "intelligent intestors" (healthy farms without serious budget constraints) will total $140 per tonne and $150-$155 on Russian average without taking into account expenditures on upgrading to standard C&D level and storing. "Thus, market prices have almost fallen to the level of the prime costs of sunflower seeds," he said.

Rylko said sunflower seed production "has been considered an original kind of 'black gold' for many years, which allows farms of the most productive regions to compensate for losses from other areas of activities. Under the current price levels, farms were stripped of this possibility despite the fact that this would be particularly appropriate for the current season which has started with marginally low grain prices."

At the same time, the falling prices this season are threatening processing enterprises with a sharp drop in deliveries of raw materials for next season, he said.

Rylko said "indirect evidence of the depth to which prices have dropped is that sunflowers have begun leaking out abroad even with a 20% export duty." According to preliminary data, some 40,000 tonnes of sunflower seeds were exported in the second half of October.

To correct the situation, Rylko said it would be necessary "to take immediate, sensible decisions at the federal level taking into account the interests of all the market stakeholders - from the producers and processors to the consumers."

IKAR has forecast that exports of unrefined sunflower oil will hit a record high of 350,000 tonnes this season.

Source: Interfax | #oilseeds | Comments: 0 Views: 73

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