Sunflower production is STILL STABLE, but the sugar industry is on the brink of collapse!

Sunflower production is greatly reduced compared to last year, however, no problems are expected in supplying the market with oil. On the other hand, when it comes to the production of sugar beet in our country, state restrictions on the price of sugar are probably the last nail in the coffin of the sugar industry in Serbia, according to a study made by the consulting group SEEDEV.

Sunflower seed production is lower than last year and is now 49.2 million tons, which is 13 percent less than last year. On top of that, the harvest in Ukraine was significantly reduced, where a decrease of about 44 percent was recorded on an annual basis, and a slight decrease in production in Russia, which was a 4 percent decrease on an annual basis.

Despite all that, harvested areas are at a record level and amount to 4.7 million hectares, or +7 percent on an annual basis, the projected production in the EU would be increased by 4.3 percent compared to last year.

Sunflower prices continue to fall

Sunflower has a significant possibility of substitution with other vegetable oils or fats and its price is limited by the prices of substitutes. Sunflower prices have been in constant decline since March and the initial shock after the Russian aggression against Ukraine.

Despite a decline in global production in 2022/23, sunflower prices continue to fall as a result of high inventories from the previous year and reduced consumption and oil substitution due to the high price. The EU Bordeaux price in the last week of August is at 747 USD, which is a drop of -12% compared to last month.

Purchase price of sunflower in Serbia

The achieved purchase price of sunflowers in Serbia for the 2022 harvest reflects the situation in the sector, where non-market measures intervene where there is the least need, in goods for which there has always been and for which there is a large domestic and export demand.

The sugar industry in Serbia is about to collapse

On the other hand, when it comes to the production of sugar beet in our country, state restrictions on the price of sugar are probably the last nail in the coffin of the sugar industry in Serbia.

a sack of sugar

The smallest ever planted area under sugar beet of about 28 thousand hectares is enough to provide enough sugar for domestic needs, but not to fulfill the export quota to the EU.

The price of sugar beet in Serbia

The agreed price for sugar beet, energy costs, transport costs with such a small production lead to a high cost of sugar, which is additionally limited by state measures.

This implies price restrictions in retail packaging and the obligation to deliver the same quantities of retail packaging as before. Although there is room to achieve a good export price, even on the CEFTA market.

Find the interest of producers in planting sugar beet and processors in sugar production is decreasing year by year and we are not far away when it will disappear completely.


Source: AGROmedia by www.agromedia.rs.

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