The Ukrainian government is proposing a package of measures to retailers and sunflower seed crushers in a bid to stabilise domestic prices for bottled sunflower oil, AgriCensus reported on 15 March.
Set out in a draft memorandum seen by AgriCensus, the plan was aimed at limiting the impact of food price inflation until the new crop’s arrival in July.
The Ukrainian Ministry of Economic Development had sent out a draft asking for feedback from the industry, AgriCensus said.
“Participants agree for the period of validity of this memorandum to not allow the sale price of sunflower oil to increase above the price level that has developed in retail chains as of 1 March, 2021,” the draft document read.
The industry added that it would commit to providing “stable and uninterrupted” supply to the domestic market of the product that the government deemed to have a “significant social value”.
Meanwhile, the Ukrainian government said it would keep the current import and export regulations unchanged, offer crushers “favourable credit resources” as well as legal advice to develop the market, and promote the development of sunflower market information system.
However, Ukraine’s sunflower sector had indicated that the proposal would be economically unviable after seed prices had soared by over a third since the start of 2021, AgriCensus said.
“This decision will cause harm to Ukrainian oil producers, since it is not wise to regulate the end product price without considering the cost of the raw material,” a crusher told AgriCensus.
Sunflower seed prices in Ukraine have surged following a prolonged drought, with Ukrainian farmers harvesting only 14M tonnes of seeds, down 15% on the year, according to United States Department of Agriculture (USDA) data.
No official decision had been made yet with the memorandum, AgriCensus wrote.