Prices changing the meal consumption pattern in Ukraine

UkrAgroConsult

Article author:

Svetlana Kupreeva

Oilseed Market Analyst

The drop in Ukraine’s 2020/21 sunflower and soybean crops will affect domestic crush and meal production. According to UkrAgroConsult’s estimates, this season 2020/21 will witness a 14% y-o-y decrease in sunflower meal production, and a 50% y-o-y slump in that of soybean meal.

While sunflower meal output directly depends on the sunseed crop, soybean crushers have to compete with feedstock exporters, who are favored by VAT refund along with stable demand from key importers. The export share in the 2020/21 soybean crop may recover.

In view of a reduced crop, growers have taken a wait-and-see approach and hold back domestic oilseed sales.

High export prices of processed products due to global market trends were also a positive factor. This allowed crushers to compete for available feedstock in the domestic market by raising their price tag.

Prices remain much higher than early this season.

In periods of increased soybean meal prices, the domestic consumption pattern traditionally changes and the livestock sector switches its demand to cheaper sunflower meal. This is confirmed by a widening price spread between soybean and sunflower meals.

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