Imports from Ukraine: Bulgarian sunflower oil producers happy, grain producers threaten protest
A proposed decision by the Bulgarian Parliament against the continuation of the ban on imports from Ukraine of various foodstuffs such as sunflower seeds and grain has been welcomed by vegetable oil producers, but has left grain producers and farmers angry and threatening protests.
A draft decision tabled in the National Assembly and on this week’s Order Paper says that Bulgaria does not support the extension of the Ukrainian import ban beyond September 15 2023, which allows wheat, rapeseed, sunflower, and corn to transit through Bulgaria, Poland, Hungary, Romania, and Slovakia, but bans the products’ availability on the countries’ domestic markets.
On September 13, Prime Minister Nikolai Denkov voiced the government’s support for the draft decision, which has the backing of the majority of We Continue the Change-Democratic Bulgaria, GERB-UDF and Movement for Rights and Freedoms MPs.
Finance Minister Assen Vassilev said that the import ban, resulting from a decision by a caretaker government appointed by President Roumen Radev, had cost Bulgaria 146 million leva in lost VAT revenue and if the ban continues, losses of 40 million leva a month were forecast.
The Association of Producers of Vegetable Oils and Oil Products in Bulgaria said in a statement on September 13 that it welcomes the proposal to lift the ban on the import of sunflower from Ukraine after September 15 2023.
“Finally, common sense prevailed and Bulgaria returned to a nationally responsible economic policy,” said Yani Yanev, head of the association.
The factories that process sunflower oil in Bulgaria have an annual capacity of more than four million tons. However, Bulgaria produces about two million tons of the raw material per year, and therefore companies rely on imports, including from Ukraine.
Oil and meal mills will have to close or reduce production if sunflower imports continue to be banned, Yanv.
“Bulgaria has created an industry, which is able to process much more sunflower than domestic consumption,” he said.
The existing ban on the import of Ukrainian sunflower has shown that it does nothing to help the producers in Bulgaria, but kills the processors, the association said.
The country needs sunflower imports of at least 1.5 million tons per year, which, given the trade balance of the region, can come in large part only from Ukraine. According to statistics for the previous campaign, Ukraine exported about two million tons of sunflower and processed the rest, that is, Bulgaria urgently needs to take a proactive position in order to free up imports and enable local processors to import the sunflower they need in the new campaign that is starting, Yanev said.
The lack of supply of sunflower by the Bulgarian agricultural producers, in the presence of a large transitional stock, is caused by their relatively high production costs in the past campaign and the falling prices on international markets.
This led to the reduction and suspension of the work of large enterprises from the processing industry because of a lack of raw materials in the summer.
If the situation is allowed to continue with the inability of producers to secure the necessary quantities of sunflower needed for processing, it will lead to the suspension of production capacities and loss of GDP for Bulgaria, loss of markets, and put at risk the price stability of the domestic market for Bulgarian consumers, the association said.
Bulgaria’s National Association of Grain Producers has said that it had decided on September 12, on hearing that Parliament’s economic policy committee had voted in favour of the draft decision, to participate in a nationwide agricultural protest “to save Bulgarian agriculture”.
Farmers from all sectors are ready to protest against the decision to resume grain imports from Ukraine, a news conference on September 13 was told.
According to them, the decision would undermine the ability of grain producers to sell their crops.
lya Prodanov, head of the National Association of Grain Producers, said that the import of grain from Ukraine is a threat to the sector, not because it will reduce profits, but because it would doom producers to the inability to cover input costs.
“The worst thing is that this decision by the committee was influenced by the lobby of the oil producers,” the producers said, ending their news conference with the words “Who sows the wind, reaps the storm”.
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