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Will the price of oil go up?

Conditions are extremely unfavorable for production

Jul 23, 2024 13:52 178

Will the price of oil go up?  - 1

Severe drought and prices have hit grain production in Bulgaria, farmers report. They expect poor sunflower and corn yields almost across the country.

"The conditions are extremely unfavorable for the production of sunflower and corn. Even when the sunflower was sown, there was not enough soil moisture. Subsequently, there were rains, it recovered, but the recent heat has an extremely unfavorable effect. They will affect both yields and quality. According to our forecasts, the amount will be around 1.6 million," said the chairman of the Association of Vegetable Oil and Butter Products Producers Yani Yanev in the studio of "Bulgaria Morning".

According to him, the sunflower has an oil content of about 44%, but they are currently receiving samples that are 35%.

More costs for processors

"There will be quantity, but the oil in it will not be the same. And the price of oil is formed by the price of the raw material. In this situation, farmers will have a high cost, we as processors will be forced to process more sunflower to get a unit of oil. We will also invest more. Because of this, there will be a price adjustment," Yanev added for Bulgaria ON AIR.

He emphasized that in this situation, Bulgaria will need about 250-300 tons of sunflower.

"Both in Russia, and in Ukraine, and in Romania are also affected by the drought. And there will be lower yields. However, the July forecasts, which are general for oils, indicate that the world production of oils will be 4 million tons more. Now there is no worry about rising prices. What happened in 2022 will not happen again. Then the prices were panicky", emphasized the chairman of the Association of producers of vegetable oils and butter products.

"All import restrictions should be removed"

Yani Yanev admitted that processors are worried about the capacity of work.

"Some businesses will operate at reduced capacity, which affects cost. Last year there were also suspended enterprises. We want to work under the same conditions as our colleagues from the EU - there are no obstacles for them to import sunflowers from Ukraine. In our country, the previous government caused various trade barriers to prevent us from importing sunflowers, and we failed to process more than 1 million tons if we had been able to import it from Ukraine," explained the guest.

Yanev is waiting for a meeting to solve these problems.

"To be in the foreign market, we need to have state-of-the-art techniques and to compete with other processors. In previous years, we successfully competed with the biggest in the world. But we need raw material to make our production program. We don't have raw material, all restrictions must be removed in order to be able to import it", he appeals.