Ukraine's palm oil imports will fall 10 percent this year to 440,000 tonnes because of increasingly cheaper and plentiful domestic supplies of sunflower oil, Malaysian and Indonesian traders said on Friday. The shift contrasts with last year when Ukraine exported more expensive sunoil to European Union countries while importing cheaper palm oil for local consumption.
"Palm oil imports to Ukraine usually range monthly between 35,000 and 50,000 tonnes and it will be around the 40,000-tonne mark this year because sunoil supplies are ample," said a Malaysian trader who does deals with Ukraine. Refined, bleached and deodorised (RBD) palm olein trades at $692.50 per tonne FOB Malaysia, or a 14.5 percent premium to European Union sunoil trading at $605, Reuters data on Rotterdam prices showed.
"Add $70-$80 freight for palm oil from Indonesia and Malaysia and we get an expensive deal, so there is a perceptible shift in Ukraine to rely on domestic supplies," said a trader based in Indonesia, referring to the top producers of palm oil. Raw sunoil output in Ukraine rose by 18.5 percent to 453,000 tonnes in January-February 2009 compared with the same period in 2008, the State Statistics Committee said last month.
Analysts have said sunoil production was likely to rise to about 2.37 million tonnes in the 2008/09 season from 1.73 million in 2007/08. Black Sea sunoil exports are expected to double in April-September period this year to a combined 1.1 million tonnes from a year ago due to the upswing in output, Hamburg-based vegetable oil analysts Oilworld said last month.
"The sunoil production expected in coming months in Ukraine may not be fully absorbed and may result in relatively large stocks in September," Oilworld said. Asian traders said Ukraine would be in the market to buy at least 120,000 tonnes of mostly RBD palm olein for April-June shipment, a decline of up to 20 percent from a year ago.
Refined palm olein is used in Ukraine for shortening, margarine and confectionery. Most of the imports are channelled to a food processing plant - a joint venture between Singapore listed Wilmar International and a Ukrainian firm.