Пятая международная конференция«Аграрные инвестиции - МТР 2012»
September 07, 2016, ​HILTON KYIV, Ukraine

Conference report

International Conference “Black Sea Oil Trade-2014”

“Black Sea Oil Trade-2014” International Conference – a leading event in the oilseed and vegetable oil markets of Ukraine and the Black Sea region – took place at Hilton Hotel, Kyiv on September 9, 2014. It was organized by consulting agency UkrAgroConsult and sponsored by Allseeds Group.

Topical issues of the world and Ukrainian oilseed markets were discussed at the Conference and elucidated by key industry experts from Ukraine, the United Kingdom, Turkey, and India.

140 participants from 20 countries of the world attended the Conference. The delegates included oilseed growers and crushers, traders, investment companies, agricultural holdings, banks, industry associations, consulting, logistics, forwarding, and survey companies.

In the course of its three sessions, “Black Sea Oil Trade” Conference dealt with prospects and trends of the global oilseeds sector in 2014/15 season. It covered priorities and leaders of the Black Sea fat-and-oil industry, characterized ways for increasing vegoil logistics performance, and analyzed strategies of the oilseeds market’s major players in 2014.

“Black Sea Oil Trade-2014” Conference was opened by UkrAgroConsult CEO Sergey Feofilov with a presentation entitled “Fat-and-oil industry: challenges in the epoch of economic transformations.” In his speech, Sergey Feofilov covered the main models of business behavior during periods of economic instability. In particular, the typical steps of investors may include sale of agricultural assets as barely profitable due to low oilseed and vegoil prices, or transition of investors to new, more effective management systems in a view to the future.

The expert pointed out that the main challenges of the 2010’s – climate change, high political risks, toughening competition – earnestly require new business-planning methods based on target-oriented approaches that may considerably increase the effectiveness of made decisions and the company’s competitiveness.


In a review of the world vegoils market, British expert Dr. Emile Mehmet, The Public Ledger, characterized this season’s trends in global production and consumption of oilseeds and vegoils. He also announced forecasts for 2015/16 season. Dr. Mehmet believes the upward trend in world soybean, rapeseed, and palm oil production will continue next marketing year. A production surplus is expected in these markets, therefore ending stocks will expand. The sunseed crop forecast is not so optimistic: The Public Ledger expects this oilseed’s production to fall in the main growing regions – Ukraine and Russia – in 2015/16 season. At the close of his report, Mr. Mehmet drew the audience’s attention to last year’s typical trend: a narrowing spread between world vegoil prices.

In his presentation, Matt Ammermann, an INTL FCStone risk management consultant, paid special attention to the market of soybeans and soybean products. The share of soybeans in global oilseeds production is estimated at 58.4%, with rapeseed accounting for 13.5% and sunseed for 7.7%. Consequently, in the opinion of Mr. Ammermann, soybeans are the key pricing commodity in the global oilseeds market, with the latter being influenced mostly by the U.S. market due to production volumes. Expanding soybean plantings in the U.S. along with a high yield of this crop continue to pressure the world’s markets. Mr. Ammermann believes this trend will continue in the future.


A detailed description of vegoils consumption and import by India was presented in the report of Dr. B.V. Mehta, Executive Director of The Solvent Extractors' Association of India (SEA). The country imports 10-11 MMT of food vegoils a year, with its annual per capita vegoil consumption equaling 14.9 kg. This figure grows by 3-4% from year to year. In MY 2013/14, India accounted for 14.6% of global import and 10.4% of global consumption of vegoils. Domestic production amounted to 9.7 MMT at that time. Palm, soybean, and sunflower oils enjoy the strongest demand. A particular upturn in sunflower oil imports to India was seen in MY 2013/14, when 11.4 MMT was purchased from November 2013 to July 2014, or up 741 KMT year-on-year. This implies great potential for higher supplies from Ukraine. Dr. B.V. Mehta forecasts that vegoil imports to India may increase 3% a year by 2025 and reach 27 MMT against 18 MMT in 2014.

The second session of the Conference started with a report of Yulia Garkavenko, UkrAgroConsult’s leading oilseed market analyst. According to her preliminary estimates, roughly 900 KMT of rapeseed from this year’s 2.2 MMT crop has already been exported over the first two months of the season. Consumption has already reached 1 MMT, including processing. Exports to the new promising markets of Vietnam, UAE, and Pakistan expanded significantly.

The desire of farmers and exporters to sell their commodity as soon as possible is quite explainable: in the current conditions, market players prefer holding money rather than commodity; in addition, no price growth is expected in the rapeseed market.

Stepan Kapshuk, UkrOliyaProm Association Director General, reported that Ukraine affirmed its leadership in production of sunseed (11 MMT) and sunoil (4.3-4.5 MMT) in 2013/14 season. Sunoil exports are estimated at 4.2 MMT. Booming development of the soybean market is going on, too. 2.77 MMT of this crop was produced in Ukraine in 2013/14 and its 2014/15 production may reach 3.5 MMT, with exports 1.35 MMT and 1.7 MMT, respectively. UkrOliyaProm Association estimates Ukraine’s 2013/14 combined production of key oilseeds at 16.17 MMT against 15.7 MMT in 2014/15.

According to Suntrade (Bunge) analyst Alina Fedyay, about 570 KMT of refined sunoil will be produced in Ukraine in 2013/14 season, with roughly 252 KMT of bottled one. Noteworthy is that following active growth, stagnation has been observed in both markets since 2007. Competition is very keen in the refined sunoil market, and even one newly emerged player can change the picture. At the moment, the top industry players include Kernel (16%), Bunge (16%), Oliyar (11%), Delta Wilmar (10%), Optimus (9%), and Creative (7%).

Veysel Kaya, Sunseedman CEO, told about Turkey as an important player in the Black Sea oilseed market. He said that Turkey produced 2.7 MMT of oilseeds in 2013/14 season, including 55% of sunseed. 3.85 MMT of oilseeds were processed in Turkey for the season, including 2.1 MMT of sunseed, 0.95 MMT of cotton,  0.45 MMT of soybeans, and 0.2 MMT of rapeseed. Turkey’s crushing capacities total 8 MMT, but only half of them is in operation. Turkey produced roughly 1.49 MMT of vegoils in MY 2013/14, including 0.87 MMT of sunoil. Vegoil imports to the country totaled 1.39 MMT in 2013, with sunoil accounting for the largest share (45%). Sunoil and soybean oil are imported mostly from Ukraine. In the same period, vegoil exports made up 710 KMT, including 80% of sunoil. The expert forecasts that Turkey will produce 1.25 MMT of sunseed in 2014/15 against a record 1.5 MMT in 2013/14 because of lower growing margin. Sunoil imports will approximate 700 KMT, while exports will total 600 KMT.

New soybean processing technologies were reported in a presentation of Anatoliy Barilchenko, CEO of Hlobyne Processing Plant (Astarta-Kyiv). He stressed that the new plant with a soybean crushing capacity of 700 MT a day (220 KMT a year) is unequalled in Ukraine. Outfitted with modern high-tech equipment, the plant is among the best in Europe and its production meets international standards. The facility was brought to its full designed capacity in January 2014. It can annually produce 160 KMT of high-protein meal, some 40 KMT of soybean oil, and 9 KMT of granulated husks. The Hlobyne Processing Plant crushed more than 125 KMT of soybeans by August 2014.

The latest trends in vegoil logistics were addressed by Kees Vrins, CEO of Allseeds that was the Sponsor Company of the “Black Sea Oil Trade-2014” Conference. In his presentation, Mr. Vrins noted that the destinations of Black Sea vegoil shipments change gradually, shifting from the Mediterranean towards the Near East and Asia. The size of vessels and export lots also increased from 3-6 KMT to 10-25 KMT. Deliveries to India have shown the greatest expansion over the recent few years, reaching 1.4 MMT in MY 2013/14. Vegoil shipments to China totaled 497 KMT at the same time. In view of this trend, the market needs increasingly more capacities of terminals located in deep-water ports outside the city limits.

Methods of increasing vegoil logistics performance were addressed in a report of Shtef Freight Management CEO Aleksandr Shtefanets. In particular, he characterized the peculiarities of using tank-containers and flaxy tanks for transportation of vegoils. Also, Mr. Shtefanets set out methods of minimizing risks while shipping liquid bulk cargoes by sea and by land.

Summing up the Conference, UkrAgroConsult financial analyst Alex Morgun analyzed strategies of major players of the Ukrainian oilseed market. He concluded that the period of mergers and acquisitions has given way to a period of consolidation and enhancing performance of companies. As borrowed funds are limited and expensive, companies face new challenges. Search for new export destinations or bringing a new product to the export market are needed as never before: the hryvnya devaluation in 2014 requires building up sources of foreign currency revenues. The CIS market’s closure did not impact the segment hard, but the lost share is to be set off through new markets.

Special attention is now paid to the product quality due to the new ways of cooperation opened with the EU this year. Producers also seek for wasteless and “green” production, which is credited by European banks such as EBRD: this may provide upgrade funding for exporting companies. Also, in view of the continued upward trend in oilseeds demand, Ukrainian producers will continue to boost growing and crushing capacities next season. The improvements will probably be qualitative rather than quantitative.


The “Black Sea Oil Trade-2014” International Conference affirmed its status as an effective platform for discussing relevant topics of the Black Sea oilseed sector and linked up leading industry experts with key market players.  Traditionally, UkrAgroConsult will hold its next Black Sea Oil Trade conference in September 2015.