It was only 45 days ago when leading analysts of the world commodity exchanges expected sunflower oil exports from the countries of the Black sea region to increase by more than 2 million tons to 13.5 million tons. But now the question is how much will be lost because of the conflict in Ukraine, experts say. 

They are confident that compensating for the shortfall by finding additional quantities of alternative vegetable oils will be a challenge for a market that was already facing limited supply even before the events in Ukraine.

"The demand is huge and Bulgaria is a big producer of sunflower and sunflower oil. We have an ultra-developed sector and we practically have quantities of sunflower-seed oil to flood the country. But in the free market, in exports, there are also such fluctuations in prices," Valentin Ivanov, chairman of the State Agency of Goods Exchange and Market-Places, explained a few days ago in an interview with BNR-Varna. And even though the country has enough sunflower seeds to produce oil for the next two years, the demand increased, people started buying in large numbers and this was immediately reflected in the price, which reached unheard of heights of over BGN 7 (EUR 3.5) per litre.

A week ago Deputy Prime Minister and Minister of Economy Kornelia Ninova urged Bulgarian citizens not to overstock on sunflower oil, as this way they harm themselves as consumers. "The rush for cheap oil, the huge queues, this is artificially created tension. The government is determined to fight against profiteering," Ninova stressed.

"We have an average price of BGN 4.70 (EUR 2.40) for a liter of oil, in retail stores it sells for between BGN 5 and BGN 7. For the moment it is not necessary to cut off or restrict exports, but if necessary, in order to guarantee the interests of Bulgarian society, we can proceed to such measures," Valentin Ivanov said:

"Sunflower oil market is currently stable. In this fiercely competitive environment, demand is lagging behind supply. In practice, even if you wanted to, you could not sell in large volumes because of the insolvency of end users. There are traders who try to sell at maximum prices, but this strategy proves unsuccessful.

This explains the high prices of sunflower-seed oil at this price of sunflower - mainly because of the expectation that there will be much less sunflower crops next year, since there will be no spring crop from Ukraine, because of the war. That is to say, the 3 million tons of sunflower seed that Ukraine produces will not be on the market. The traders have no certainty regarding the crop from Russia, which is also a large producer - the largest producer of grain and one of the largest producers of sunflower seed. So it all depends on the outcomes of the war.

Assuming that it is over in a month's time, we could see very different trends in the grain and sunflower seed markets in September. The situation is unpredictable and no hasty forecasts should be made."

The sudden rise in the retail price of sunflower oil in Bulgaria is very similar to what happened with the prices of cheese at the beginning of the Corona virus crisis in 2020, said the rector of the Technical University in Varna Evgeni Stoimenov.  

According to him, the desire for speculative price increases hidden behind the argument of increased raw material costs.

"The cheese problem was solved literally within a day by releasing part of the state reserve. The state reserve was renewed by buying new production at half price and the speculators were given a lesson."

Compiled by: Gergana Mancheva

Editor: Elena Karkalanova