Dear Sir or Madam
Since last Monday we are in Bulgaria on a business trip and will return tomorrow. The Bulgarian hulling industry is covered for the next 2 months with raw material. Perhaps some of them only for the next 4 weeks. This week a 22.000 mt sunflower seed tender is in the market. A vessel has arrive in Varna and the three big players ( Dreyfuss, Cargill etc. ) trying to fill it with produce and limited success. In order to complete the vessel they are purchasing 8.000 mt of sunflower cake. Even based on today`s high raw material prices with about EURO 350,00 p.mt ex farmer`s side the Bulgarian farmers do not want to sell ( please see attached price chart ).
Sunflower seed will be traded in USD. Since Donald Trump is the president elect the currency USD has increased in value against the EURO with about 5 %. Consequently price expectations of the farmers are firmer. The Bulgarian huller has targeted the raw material below EURO 300,00 p.mt ex farmer`s side for the main sales contracts on kernels and started very reluctant with first purchase orders for the raw material during the beginning of the season. The opening price was simply too high.
The majority of the Bulgarian hulling industry has made a big mistake or have had wrong expectations and consequently this group of shippers are not making any money. Better saying they are paying the buyer for each truck they have bought from them with about EURO 2.000,00 or even more. Usually all investments for maintenance or even for new cleaning machines based on a 3 years return on investment because of the extensive process. Due to the very low price all shippers has prolonged the compensation time up to 6 years. We see an investment bubble in front of us with unclear impacts.
We recommend to purchase only from safe and financial strong suppliers.
PS: The above described situation is valid for all main producers in the black sea region. You can see that prices never went below the breakeven price of EURO 300,00 p.mt. Please check again our attached price cart.
Mit freundlichen Grüßen
Dear Sir or Madam