site.btaVegetable Oil Producers Warn that Ban on Ukrainian Sunflower Import Will Cause Collapse of Bulgarian Processing Companies

Vegetable oil producers warn that the ban on the import of Ukrainian farm produce will cause the collapse of Bulgarian processing companies. A statement by the Association of Vegetable Oil and Oil Products Producers in Bulgaria, distributed by the Bulgarian Industrial Association, calls the ban on Ukrainian imports “unacceptable”.

"Temporary measures to restrict the import of grain and oil-bearing crops from Ukraine will lead to the collapse of processing companies in Bulgaria," the statement goes. 

"Given the restrictions imposed this week by the Bulgarian government on sunflower imports from Ukraine and the cyclical preventive measures being discussed with the EC, our fear is that without a national position on all affected sectors of the economy, unwanted and highly negative consequences could hit our sector," wrote Yani Yanev, chairman of the Association. 

The processing industry cannot secure the sunflower it needs from the Bulgarian market alone and the ensuing economic consequences are a reduction in the GDP generated by the sector, closure of enterprises, working at reduced capacity and job cuts, to mention but a few, the statement said. If these restrictive measures are applied for a long period, we are exposed to a serious risk of production stoppages and default on contracts with clients due to lack of raw material and inability to plan within the industry's standard 3-month period, Yanev explained.

According to him, the situation will also lead to a chronic shortage of sunflower oil for domestic consumption, an increase of prices for end consumers, and new spike in inflation.

They said that the Bulgarian ban on sunflower imports will redirect Ukrainian sunflower to Western European countries and Bulgaria will lose traditional export markets there. 

The association of vegetable oil producers proposes that some of the goods that Ukraine is now allowed to transit through Bulgaria, stay here to be processed “with clear commitment that all of the cooking oil produced with Ukrainian sunflower will be exported”.

The association is ready to participate in a working group with representatives of the state administration to prepare rules for this to enter into the country's position in negotiations with the EC.

The association is the only nationally representative organization of cooking oil producers. The industry includes over 100 small, medium and large processing enterprises with over 10,000 employees and revenues of over BGN 7 billion in 2022. 

The companies have invested hundreds of millions of leva in the country's processing capacity and as a result Bulgaria is now the largest exporter of sunflower oil, meal and sunflower seed in the EU, the association said. 

It adds that as domestic sunflower production now insufficient, much of this processing relies on imports, which in the last two years have been from Ukraine and other countries. It should also be noted that domestic production of processed sunflower products exceeds domestic consumption by a factor of eight, so this processing industry is highly export-oriented and one of the largest and most reliable generators of GDP and tax revenue for Bulgaria. 

What is more, the sector has traditional export markets for crude sunflower oil in India, South Africa, etc.; for sunflower meal exports in China, Israel, Morocco, etc.; and for sunflower seed exports in the USA, Australia, New Zealand, the UK, etc. It risks to lose these as a consequence of the ban on Ukrainian sunflower imports, the association says.