The Oil and Fat Union believes that by the end of this season the level of carryover stocks of oilseeds should return to the usual level.
MHS predicts that in just a few months, carry-over stocks of oilseeds will decrease to about 1.5 million tons. However, in the last few years this figure was significantly higher and amounted to about 2.5 million tons.
Experts expect that by the end of the current season, sunflower reserves will be reduced to 650 thousand instead of 1.7 million tons, the remains of soybeans and rapeseed will remain virtually unchanged.
The head of the Union, Mikhail Maltsev, notes that the main reason for the reduction in reserves is the more intensive processing of the oilseed crop, which we have seen in recent years.
For example, from September last year to May this year, almost 20% more sunflower oil was produced when compared with the same period of the previous season.
This is an increase of 1 million tons in absolute terms.
If we talk about the total production of all vegetable oils, then it increased by about 11% and totals 7.7 million tons.
It is the increase in purchase volumes from processors that has become the main reason why oilseed stocks, especially sunflowers, are rapidly declining.
However, experts do not expect that there may be a shortage on the raw material market, because if reserves return to their usual values, then this will be quite enough to provide work for all enterprises.
However, there are not so many reserves of raw materials for other crops, so there is serious competition for them.
At the same time, an increase in carry-over stocks, especially several times, is difficult to recognize as a desirable phenomenon, because it leads to a shortage of storage facilities, which is already one of the noticeable problems of farmers today.
In addition, excess inventories put pressure on prices and prevent producers from selling their crops at maximum profit.
However, there is a risk that the producers themselves will want to “hold” part of the harvest in storage in order to force prices to rise, although processors do not really like this practice.
At the same time, at the moment, according to the latest data, oil extraction plants and other processing enterprises are fully provided with raw materials.
By the end of the current season, they are capable of processing up to 4 million tons of sunflower and producing approximately 1.6 million tons of oil.
In general, up to 26 million tons of oilseeds can be processed in Russia over the entire season. This is approximately 1.5 million tons more than last season.
