The liquid gold of the Bulgarian – 24chasa.bg

Investing in oil at the moment can bring 94% return, but it is more likely to just spoil

Whenever there are serious economic cataclysms in the world like now, there is a commodity, service or phenomenon that easily becomes a haven for people’s savings. Everyone wants to keep their money from depreciating, but some have enough to buy land or housing with it, others invest it in stocks, others turn to gold.

The mass Bulgarian turned to oil a week ago. Immediately after the warning of one manufacturer that this liquid will soon become “golden” and its price will hit BGN 7.50 per liter, people rushed to the shops. They found oil for 5 or 6 leva and hysterically started buying.

A steak with 12 bottles, bought for 6 leva, in practice

brings net profit

from BGN 18

at the moment when the price reaches BGN 7.50. And if it rises to BGN 10, something that the happy stack owner firmly believes in, the profit immediately becomes BGN 68 with an investment of only BGN 72 in the entire stack.

It’s like a bank giving you 94% interest on the deposit – such a miracle has never happened in our country, even on the eve of the global financial crisis.

One hundred percent of the lucky owners of steaks have not thought that sunflower oil lasts a maximum of one year, after which it becomes carcinogenic and it can neither fry potatoes nor cook.

And this is very important, because it is no wonder that he fails to realize this high profitability and to consume it himself. Just as the oil is likely to become BGN 7.50 and even BGN 10, so is the probability that it will remain at the same price and even become cheaper. At the moment, no one can know for sure.

There is something illogical about stocking up on oil, but has a logical explanation been found for why people rushed to buy toilet paper in the early days of the coronavirus pandemic? By the way, there is something in common between the two madnesses –

occur against the background of

unusual events

In early 2020, no one in the world suspected that there would be a pandemic of an acute respiratory illness that would force people around the world to remain locked up at home. The last such catastrophic events were too long ago to have any memory of what happened.

It is the same now – never, or at least not in the conscious life of today’s people, has it happened that the two largest sunflower producers in the world are at war with each other and suddenly both of them leave this market. No matter how little one understands from stock exchanges and markets, it will immediately occur to him that something dramatic is about to happen with the oil – to disappear from the market or to rise dramatically.

There is an explanation for what has been happening to the economy for months. Since July last year, there has been instability in the global energy market, which is already affecting the food industry. All foods are more or less expensive. All this made people afraid

the war in Ukraine

he just seemed to pull

one detonator

The hysteria about oil is not a typical Bulgarian phenomenon. The same happened in Turkey, Romania, northern Macedonia and even stable Germany. The Federal Association of Food Traders in Germany has been forced to call on people to stand in solidarity with each other and not stock up on oil and olive oil.

In Turkey, the panic came after a missed remark by the chairman of the local branch association of vegetable oil producers, Tariq Buyukhelvadjigil. He said 16 tankers loaded with sunflower oil have been waiting in vain for days to leave Russian ports off the Sea of ​​Azov, with supplies in Turkey alone in just a month. This unleashed an unprecedented storming of stores.

But with regard to sunflower and oil, the situation in Romania and Bulgaria is quite different from that in Turkey. Both countries

we are big

manufacturers

of sunflower,

but we hardly export it, we export oil. Accordingly, we hardly import sunflowers from anywhere, so the cessation of exports from Russia and Ukraine does not affect us physically.

Romania, for example, produces more sunflowers than France. Bulgarian production in the last few years was about 2 million tons per year – a quantity that is enough to provide oil for the domestic market for about 5 years.

The easiest way to get an idea of ​​how much oil can be produced is to divide the amount of raw material into three or two and a half. The two million tons of annual production of raw materials in our country are enough to produce about 700-800 thousand liters of oil. However, the annual oil consumption in Bulgaria is about 100-150 thousand liters. Everything else has been exported for the last ten years

our country has become

in one of the largest

oil exporters

in Europe

To this we must add the cake, which is moderately expensive animal feed.

But despite the fact that we have oil to bathe in it, for several days – between March 8 and 12, the Bulgarian attacked the shops that offered oil on promotion. The inspections ordered by then-Deputy Prime Minister Cornelia Ninova have already been carried out and show that in general

the sudden jump of

the price of 5 and even 6 levs

and the ensuing hysteria

due to clean

coincidence

“The problem in these few days before March 8 came from the fact that for a short time there were large exports of oil and there was a temporary shortage, but rather a reduction in quantities,” explained to “24 Hours” the chairman of the State Commission for commodity exchanges and markets Vladimir Ivanov.

“Most of the warehouses we checked during this period had very small quantities, two or three pallets. Wholesalers did not charge due to the fact that they did not know what its price would be. From their point of view, they are right, because in principle they work with the oil with very small profit margins – 2-3, maximum 4%. We have not found a warehouse at all to say that it is covered with oil and the trader is sitting on top of it and waiting for it to be BGN 7.50 in order to let it go in the shops “, said Ivanov.

The inspections continued this week and on Thursday and Friday they showed the same thing – the supplies of oil have not stopped, but the quantities are small. Its wholesale price is between BGN 3.80 and BGN 4.20.

The bigger question is what its price will be in the future.

The head of the Association of Vegetable Oil Producers in Bulgaria Mariana Cholakova told “24 Chasa” that although there is enough raw material in the country, farmers still monitor the quotations on world markets, navigate them and in any case

are not inclined

to sell cheap

And quotes have risen by 20% since the war began. The Ukrainian sunflower exchange itself stopped working and did not provide data, but the next largest in Europe – the French, from 1,400 dollars per ton before the war in Ukraine, sunflowers have now reached 1,700 dollars, an increase of just over 20%.

At the moment, no one can make a serious prediction for the near future, but not just because of the war. The uncertainty comes from the fact that sunflowers are not traded this season of the year.

The harvest in our region is harvested in August and September and trade begins in October. Until then, the quotes will reflect fears, expectations, hopes and what not, but not any real deals.

Of course, one can always try to close the borders and temporarily stop the export of sunflower or oil, or both.

Neighboring Serbia has already done so, not only for oil, but also for flour and two or three other goods.

Such an option was considered last week in our country, but it is estimated that

will do more harm,

than benefits

Because it will ruin the business of oil refiners, which no one benefits from. And the quantities of oil, both with an export ban and without a ban, are more than enough, its production has not stopped.

It is very likely that the import of cheap oil will start, as it was tested last year, and in considerable quantities – German sunflower oil was imported at BGN 2 per liter in bulk and in Bulgaria it is only re-labeled. But other European countries are also likely to restrict its exports.

After all, there are other types of vegetable oil on the market – rapeseed, walnut, flaxseed, palm.

According to market data, however

palm oil

it has also become more expensive

due to poor yields

in Asia, where we mainly import it.

A few months ago, when the prices of sunflower oil went up, many pasta manufacturers tried to replace it with palm oil, but now its price is BGN 3.50 per kilogram wholesale and that has turned them down.

By the way, the olive harvest in Greece is catastrophic, which automatically leads to a shortage of olive oil. As the saying goes, evil never comes alone.

It is very possible that there will be changes in the consumption of oil in our country. It is far from the healthiest food in the world and the maximum allowable daily dose is 3 tablespoons. It is healthier, of course, than lard, but not as much as olive oil.

All demographic observations from recent decades show that two regions in Europe have the highest life expectancy – the Scandinavian and the Mediterranean. There, life expectancy exceeds the European Union average. But while for the Scandinavian countries the explanation can be found in their well-developed health and social systems, for countries such as Greece, Cyprus, Italy, Spain and Portugal the reason is definitely in nutrition. In these countries, they eat fresh fish, fruits and vegetables that have not traveled from other continents and have not ripened along the way. And most of all –

cook with olive oil

However, olive oil is in another price category. A liter of extra virgin, which is the highest quality olive oil, costs in stores from 15 leva and up and sunflower oil has no chance to become so expensive soon. However, the shelf life of olive oil is 20 months, not 12, as is the maximum shelf life of the oil.

The other reason why olive oil is not so popular in Bulgaria is that extra virgin is not suitable for frying, because at temperatures above 160 degrees it simply ceases to be extra virgin and completely changes its taste and aroma. That’s why olive oil and the recently popular coconut oil have a different target – people who stick to a healthy diet.

Rapeseed oil, which is popular for cooking in Western Europe, is not used in Bulgaria because it has an unusual taste for Bulgarian preferences.

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