Energy crops, the edible oil processing industry and land use paradigms in Romania–An economic analysis

Abstract

The purpose of this research is to explore the issue of the land used for sunflower and its production as raw material for edible oil processing industry in Romania. The relations between consumption, as main component of demand, and production and import, as sources of supply, on the sunflower oil market are investigated. The case study of the edible oil market is discussed because of the alarming growth in imports after Romania’s accession to the European Union and, furthermore, because of sunflower crop implications on land use in the context of the food vs. fuel competition. The research answers the issue of the factorial relations between sunflower oil production, import and consumption, as well as the issue of the extent to which the consumption requirements can be met by domestic production. In pursuing this, data regarding the sunflower oil consumption, production and import are computed to investigate their interdependence, using the regression model. The main findings reveal that a one-unit increase in sunflower oil consumption leads to a growth of 0.13 units in oil production, and of 0.19 in oil imports, respectively. The relevance of this study lies in its capacity to lead to better understanding of the interdependence among sunflower oil consumption, production and import, in predicting them, and, furthermore, in identifying investment opportunities in the Romanian sunflower oil processing industry, given the significant potential of sunflower seeds production of this country.