Almost two thirds of the vegetable oil market in Ukraine is occupied by sunflower oil, one third by tropical oils, and a very small percentage (less than 10%) by other types of vegetable oils (olive oil, soybean oil, rapeseed oil, linseed oil, mustard oil).
Due to the growth of imports of tropical oils (palm, palm kernel and coconut oils), the structure of the Ukrainian vegetable oil market is constantly changing, and the market share of tropical oils is increasing every year (see diagrams below). First of all it is connected with the fact that imported tropical oils are cheaper than domestic vegetable oils and much cheaper than animal fats (Ukraine is one of the largest importers of palm oil in the world). Therefore, manufacturers of bakery, confectionery and dairy products are increasingly using tropical oils in the production of their products.
In addition, it is worth noting that over the past few years Ukraine has established tropical oil processing facilities, thus elevating Ukraine to the top of the ranking of palm oil exporters.
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Vegetable oils are usually bottled and sold in PET packs, and only premium oils are bottled in glass containers. As it turns out, packaging has a very strong influence on consumer choice. Cheap packaging uses low-quality closures, has a sloppy design and is easily deformed during transportation.
Sunflower oil in Ukraine: consumption and preferences
Sunflower oil is a product obtained from sunflower seeds and is used for cooking. Natural sunflower oil has a specific pleasant smell and taste and contains vitamins of groups A, D and E.
Types of sunflower oil:
- unrefined raw, “cold-pressed” oil – the most useful oil produced by mechanical pressing from crushed sunflower seeds. However, such oil has a low shelf life.
- unrefined extraction – such oil is produced by extraction (maximum extraction of oil from sunflower seeds using organic solvents), it is less useful than raw, but has a longer shelf life.
- refined oil – the oil is processed according to the full refining scheme, as a result of which it has the longest possible shelf life, becomes more transparent and has no pronounced odor and taste.
Vegetable oil is used by 97-98% of families in Ukraine, the absolute majority of which (90%) prefer sunflower oil, using it for frying, salad dressing and making homemade mayonnaise or preserves.
Many residents of Ukraine (as a rule, residents of villages, towns and small cities) prefer to buy natural unrefined oil of yellow-orange color with a pleasant smell. However, the majority(more than 60% of the population, and mainly residents of large cities) prefer refined oil of yellow color without taste and odor. Consumption of factory refined sunflower oil is increasing every year, while the share of home-produced oil is decreasing.
Unrefined oil is cheaper than refined oil and is sold mostly in markets.
Sunflower oil selection criteria.
Almost 100% of respondents pay attention to the reliability of the bottle, 82% – to the ease and accuracy of opening the bottle, 75% – to the convenience of use and storage. And this affects the choice of sunflower oil in both standard volume bottles (0.5-1 liters) and large liter bottles (2-5 liters).
Production, retail turnover of vegetable oils
In Ukraine, sunflower vegetable oil production is the most important branch of the agro-industrial complex. In the structure of production volume of all oilseeds sunflower occupies more than 90%, and in the structure of all sown areas – about 10%. Sunflower is grown in almost all oblasts, and most of all in the Southern and Central oblasts. Recently, there has been a decline in sunflower yields, on average by 7% annually. This is due to land depletion and violation of agro-technology. Ukraine is the largest producer and exporter of sunflower oil.
In the period from 2008 to 2013, sunflower oil production increased every year on average by almost 10%. Dynamics of sunflower oil production in Ukraine for 2008-2013 is presented in the figure below. In 2013, sunflower oil production in the structure of total production of all types of vegetable oil occupies 96.3%, soybean oil production – 2.7%, rapeseed oil production – 1%.
In 2013, rapeseed oil production reached the mark of 48 thousand tons and soybean oil production reached 129 thousand tons.
In the retail turnover of enterprises in Ukraine in 2008-2012 vegetable oils were sold for the amount of: 1205, 1187, 1452, 2002 and 2257 million dollars respectively:
Exports, imports of vegetable oils in 2012 and 2013.
In 2012, Ukraine exported sunflower oil the most in terms of types of vegetable oil – almost 4 billion dollars (and this is about 95% of all exports). The main importers are Italy, Spain, the Netherlands, France, India, Iran, Turkey, Algeria, Egypt. Exports of soybean oil amounted to 59.17 million dollars (the main importer – Poland), exports of palm oil – 50.59 million dollars (mainly exports to Russia). Coconut oil was exported for 7.5 million dollars, swiripa, rapeseed and mustard oils for 6.5 million dollars.
In 2013, soybean oil exports increased to 74.36 million dollars, while sunflower oil exports decreased to 3.28 billion dollars. UAH. Palm oil exports fell catastrophically, to a low of US$3.2 million.
Palm oil and coconut oil were most imported in 2012, with imports totaling $182.67 million and $45.34 million, respectively. Palm and coconut oils are most imported from Indonesia and Malaysia. The third place in imports is occupied by olive oil – 9.8 million dollars – imported mainly from Italy and Spain. Insignificant imports of sunflower oil from Russia and soybean oil from Poland.
Imports in 2013: palm oil and coconut oil are still the most imported to Ukraine – in the amount of 210.5 million dollars and 33 million dollars, respectively. At the same time, palm oil imports increased, while coconut oil imports decreased. The importers remained the same – Indonesia and Malaysia. Imports of olive oil increased in 2013 and amounted to 12.6 million dollars (imports from Spain, Greece, Italy and Turkey).
Producers of vegetable oil in Ukraine. The most popular brands
According to GrainUkraine, the top 10 producers of crude sunflower oil in 2013 are as follows:
According to the Agrarian Exchange of Ukraine, the top 10 exporters of sunflower oil in physical terms in 2012 are as follows:
As far as domestic consumption is concerned, two companies provide almost 90% of it:
- Kernel with the trademarks “Chumak Zolota“, “Stozhar” and “Shchedriy Dar“;
- Bunge with the trademarks “Oleina” and “Rozumnitsya“.
At the same time, more than 50% of consumers buy sunflower oil TM “Oleina”, which makes it the undoubted leader in the domestic market. TM “Chumak” is in second place in terms of consumption – it is bought by 13.4% of consumers. They are followed by “Shchedriy Dar” – 11.2% and “Stozhar” – 6.6%.
Other popular sunflower oil brands in Ukraine are:
- “Slavolia“, producer – holding “Urozhay”,
- “Kama“, manufacturer – “Kama” company;
- “Olkom“, manufacturer – Kiev Margarine Plant;
- “Slavia” – Polohovsky oil extraction plant;
- “Zolotko” – Kharkovagrosoyuz.
It can also be noted that in regional markets, competition to well-known brands is formed by own brands of retail chains, for example, “Premia”, “Dobry Pokovar”, “Furshet”, “Eurogroup”, “Bon Vie” and others. Such brands may occupy up to 15% of the entire market in certain cities and regions.
Olive oil brands:
- Maestro de Oliva is the producer of Olive Line (Spain);
- Borges is the manufacturer of Aceites Borges Pont S.A.U (Spain);
- Prize – manufacturer Exoliva S.A. (Spain);
- mana gea – manufacturer Pure Products LC (Greece);
- Hellas – manufacturer Kolympari S.A. (Greece);
- ABEA – manufacturer ABEA (Greece);
- Costa d’Ogo is the manufacturer of Costa d’Ogo (Italy);
- ITLV – manufacturer ABPSAU (Spain);
- Monini – manufacturer “Monini S.P.A.” (Italy);
- Oscar – manufacturer Olive Line (Spain);
- Ravika – manufacturer “Keskinoglu A.S.” (Turkey).
Outlook for the vegetable oil market in Ukraine
The Ukrolia Association notes that by 2015 Ukraine’s oil and fat factory, already the largest in the world, will increase its processing capacity to 15 million tons of oilseeds per year. Ukraine will retain its world leadership in sunflower oil exports.
The processing of oilseeds from other crops and the production of soybean and rapeseed oil is a promising area that domestic producers are actively exploring. This is primarily due to the fact that most of the harvest is exported. However, even here businessmen face difficulties: the European Union may cancel subsidies for biofuel production, which threatens rapeseed exports. As for the export of soybeans and soybean oil, the main problem is that 98% of all soybeans grown in Ukraine are genetically modified.
Summary
- Ukraine is the world leader in sunflower oil exports. Sunflower oil production has been increasing by 10% on average over the last few years.
- Sunflower oil occupies the lion’s share in the structure of retail turnover – more than 90%. Ukrainians living in cities prefer refined sunflower oil.
- Ukraine has established production for processing of oilseeds of tropical crops, and therefore palm and coconut oil occupy a large share in exports and imports of vegetable oils.
- The competition on the Ukrainian market of vegetable oils is quite high. Almost 90% of domestic consumption is provided by two companies: Kernels with the trademarks “Chumak Zolota”, “Stozhar”, “Shchedriy Dar” and the company Bunges with the trademarks “Oleina” and “Rozumnitsya”. In the regional markets they are competing with own brands of retail chains, which in some regions can occupy up to 15% of the total market.
- Vegetable oil is bottled in PET bottles of various volumes, premium segment vegetable oils are bottled in glass bottles. Almost all buyers pay attention to the reliability of the bottle when buying vegetable oil.
And we’d like to remind you that branding agency KOLORO is engaged in the development and modeling of unique geometry of glass or PET bottles, development of mold geometry, label and packaging design. The concepts created by us find their realization on the market, as they are unique and tailored specifically to the needs of consumers.
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