Currently, the sector is in a difficult situation, which may lead to some players simply leaving the market.
The situation in the vegetable oil production sector is currently unfavorable, experts say.
First of all, due to oil prices, which are quite low, while prices for raw materials, primarily sunflower, have become high.
This leads to the fact that most oil extraction plants have very low margins.
Such a combination of circumstances may become a serious test for the sector.
At the same time, large players will most likely overcome the crisis, but small ones may not survive. It is possible that small enterprises will be put up for sale, analysts say.
«Now we can see the sale of inefficient oil extraction plants.
Large players will wait out this time, because selling for next to nothing is pointless.
I think that most of them have resources — they (major players in the oil and fat sector) are diversified: there are other areas of business or a financial “cushion,” said Ilya Shumov, a representative of Rosselkhozbank.
At the same time, and in a favorable period for the industry, which fell on 2023, there were a large number of mergers and acquisitions, which leads to business consolidation.
Recently, oil exports to China have become very relevant, which means that the purchase of oil extraction plants and related infrastructure in Siberia and the Far East is likely, since this is where the main centers associated with oil exports to China are located.
In general, the negative marginality of the oil production business is now already leading to the fact that oil extraction plants are massively stopping their work, or switching from sunflower to other raw materials, for example, soybeans, but its production volumes are completely incomparable with sunflower, experts note.
In order to somehow increase marginality, some enterprises increase the selling price of meal, but they cannot do this indefinitely, so stopping and waiting out the difficult period is the optimal solution that many enterprises are choosing today.
Experts say that the root of the existing problem is that sunflower seed producers are in no hurry to sell it, but continue to hold it in warehouses in anticipation of price increases.
However, the imminent arrival of the new harvest should force them to start selling their stocks quickly, analysts are sure. Thus, the chances of normalizing the situation in the coming months increase.
