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Ukraine's oilseeds processing industry lost raw materials worth of USD 2 bln since war broke
7 February 2023, 11:41
The Ministry of Agrarian Policy and Food of Ukraine outlined some of the aspects affecting the country's oil and fat industry. Firstly, it is a decrease in the production of potential raw materials, including sunflower seeds, in Eastern Ukraine. The processing industry has lost around a third of seeds, First Deputy Minister Taras Vysotsky announced.
"These are considerable losses as the cost of this raw material is USD 2-2.5 billion in absolute terms," he continued.
Another factor is the temporary occupation of parts of Zaporizhzhya, Donetsk, and Kherson regions. Enterprises engaged in the processing of raw materials and production of vegetable oil remain there. Their capacity is quite high and they are currently inaccessible.
"The russians openly shelled Mykolaiv port, which also houses terminals and is one of the largest oil producers. All these have led to the fact that the capacity to process raw materials in Ukraine has almost halved," said the First Deputy Minister.
The blockade of seaports was another challenge for the industry. According to Taras Vysotsky, since the war broke, this type of logistics was out of reach, and the period before the Black Sea Grain Initiative was launched was the most crisis-ridden for the industry.
As a result, Ukraine suffered losses in value added, unable to process raw materials.
There are several vital points to restore the oil and fat industry. These include the extension of the duty-free, quota-free free trade zone with the EU. It also means the extension or indefinite validity of the Grain Initiative, which allows exporting fat-and-oil products through the ports of Big Odesa.
