In May, Ukrainian traders contracted 620 tons of Ukrainian sunflower oil for export, which is showing very fast growth, but in July-August, the export rate may slow down, according to the analytical cooperative “Start”, created within the framework of the All-Ukrainian Agrarian Council (AAC).
“Sunflower oil prices are rising due to limited supply on the world market. The main producers of sunflower oil in the world are Russia and Ukraine. Russia exports the majority of its production to China, while other buying countries turn to Ukraine, where supply is limited. This leads to higher prices for sunflower oil,” the analysts explained.
According to them, the purchase price for sunflower in Ukraine has already exceeded 18 thousand UAH/ton. However, the mills are ready to buy it even at high prices due to low stocks. In addition, the resumption of port operations in March-February led to a significant reduction in sunflower stocks, which also affects the price increase.
Processing plants are operating with minimal profit in anticipation of the new oilseed season. The current prices often bring minimal profit or even losses to the plants, but their main goal is to maintain operations until the rapeseed season starts, when a new crop will be processed, experts believe.
“This week we expect further growth in sunflower prices. The crushing plants will continue to buy sunflower at the current prices, which range from 18.1-18.2 thousand UAH. By the end of the week and early next year, purchase prices are expected to reach 19 thousand UAH/ton,” Pusk predicts.
The Interfax-Ukraine news agency is deeply saddened to announce the death of its founder and head, Oleksandr Martynenko, in Kyiv on Tuesday. He was 63 years old.
The agency’s staff continues to work in full. All news and other information products are and will continue to be published as usual. The staff of Interfax-Ukraine would like to express their gratitude for the emotional support of the team in connection with the loss and warm words addressed to the founder of the agency and express their condolences to the family and friends of Oleksandr Martynenko.
The date and place of the funeral will be announced later.
Oleksandr Martynenko, born in 1960, graduated from the Faculty of Economics at Kharkiv State University and founded and headed Interfax-Ukraine in 1992. He also served as Deputy Head (1991) and Consultant (2001) of the Presidential Administration of Ukraine, Press Secretary of the President of Ukraine (1998-2001), Secretary of the Presidential Council on Information Policy (2001-2002), and member of the National Council on Television and Radio Broadcasting (2002-2003).
He is a holder of the Order of Merit III degree (2022), the Order of Prince Yaroslav the Wise, V degree (2020). Since 2010, he has been an Honored Journalist of Ukraine.
“Interfax-Ukraine is an independent Ukrainian news agency that has been operating in the Ukrainian political and economic information market since 1992. It produces more than 40 news products in four languages. The agency’s editorial office is located in Kyiv. “Interfax-Ukraine is not a part of foreign media holdings. The founder and owner of Interfax-Ukraine was Oleksandr Martynenko. As reported at the end of 2023, Interfax-Ukraine news agency became the official representative of the international company Dun & Bradstreet (D&B) in the Ukrainian market, and since 2005 the agency has been a member and official service provider of the American Chamber of Commerce in Ukraine.
Sweden will provide Ukraine with the 16th and largest military aid package since the start of Russia’s full-scale invasion, the Swedish government’s website reports.
It is noted that the new capabilities will strengthen Ukraine’s air defense. The aid package amounts to 13.3 billion Swedish kronor ($1.3 billion) and meets Ukraine’s priority needs.
Sweden is providing radar reconnaissance and control aircraft (ASC 890) to Ukraine, thereby strengthening Ukraine’s air defense capabilities. Sweden is transferring the entire Swedish fleet of Pansarbandvagn 302 (Pbv 302) to support the creation of new brigades in the Ukrainian army. Sweden will also send artillery ammunition and resources to maintain previously donated equipment.
Since Russia’s brutal offensive war, Sweden has allocated 43.5 billion kronor for military support to Ukraine.
The 16th military support package also includes: financial support for coalitions of capabilities; financial support for funds and initiatives that allow for the rapid and large-scale procurement of equipment for Ukraine. The Swedish Defense Research Agency will also be tasked with supporting Ukraine in establishing its own defense research institute.
As part of this package, the capabilities of Ukraine’s combat command are further strengthened by the transfer of terminals with satellite communications subscriptions.
The State Enterprise “Forests of Ukraine” has won a tender of the Ministry of Defense of Ukraine for the supply of almost 28 thousand cubic meters of wood, the company’s CEO Yuriy Bolokhovets said on Facebook.
“The bidding took place on Prozorro. The final price was UAH 3,750 per cubic meter. According to the terms of the contract, the supplier fully ensures the delivery of products. That is why the price is slightly higher than at exchange auctions,” he wrote.
The Director General added that in 2024, SE “Forests of Ukraine” provided the Defense Forces with almost 75 thousand cubic meters free of charge and fulfilled all the requests received by the company from military units.
“We believe it is right that the timber will be supplied to the military directly from the manufacturer under the tender procedure. This will allow us to optimize budget expenditures, guarantee the quality and timeliness of deliveries,” Bolokhovets said and added that since 2023, the State Enterprise “Forests of Ukraine” has provided the Armed Forces with almost 200 thousand cubic meters of lumber and raw wood worth more than UAH 330 million.
As reported, Ukraine launched a forestry reform in 2016. As part of it, the sale of unprocessed timber at electronic auctions has already been introduced. Since 2021, an interactive map of wood processing facilities has been operating in a test mode in a number of regions.
The industry has implemented the Forest in a Smartphone project, which contains a list of logging tickets for timber harvesting and allows you to check the legality of logging on the agency’s online map.
On June 1, 2023, Ukraine launched a pilot for the electronic issuance of logging tickets and certificates of origin of timber. In addition, the State Enterprise “Forests of Ukraine” has launched a pilot project to procure timber harvesting services through the electronic platform Prozorro.
“Kernel, one of the largest Ukrainian agricultural holdings, processed 816 thsd tonnes of sunflower seeds in the third quarter of fiscal year 2024 (FY, July 2023-June 2024), up 10% year-on-year and in line with the previous quarter.
“At the end of February, the Group launched a start-up initiative at a new oilseeds crushing plant located in western Ukraine, which crushed 24 thousand tons during the reporting period. At the time of publication of this report, the plant is reaching full production capacity,” the company said in a report to the Warsaw Stock Exchange on Wednesday.
According to the agroholding, two of Kernel’s oilseed processing plants in Kharkiv region are out of operation due to their proximity to the Russian border and the war zone. The assets continue to be subject to regular attacks and suffer serious damage. One of these plants is currently in an emergency condition due to its location in the epicenter of hostilities. Both assets were fully impaired in 2022.
At the same time, sales of sunflower oil in January-March 2024 increased by 40% compared to the same period in 2023 and reached 382 thousand tons, totaling 1,090 thousand tons in the first nine months of FY2024, up 33% year-on-year.
Sales of bottled sunflower oil accounted for 5% of total sales (19 thsd tonnes) in the third quarter of FY2024.
Although the profitability of sales was relatively stable in the third quarter of FY2024, compared to the previous quarter, EBITDA per tonne of oil sold decreased by 36% to $131, as the profit for the previous quarter was exceeded by a one-time insurance payment caused by material damage and business interruption.
As a result, EBITDA of the Sunflower Oil segment decreased by 34% to $50 million in the third quarter of fiscal year 2024 for the nine months ended March 31, 2024.
The Oilseeds Processing segment generated $184 million in EBITDA for the agricultural holding, down 16% year-on-year.
“As of March 31, 2024, Kernel had a relatively good supply of sunflower seeds: 511 thousand tons of seeds were in stock. Together with further purchases in April-May 2024, this will ensure that the agricultural holding’s plants will be operational until mid-summer, with a further switch to rapeseed processing at some plants, which was already practiced a year earlier.
“Following the progress of the processing season, we have revised our estimates of the sunflower harvest for 2023 and are increasing the harvest of seeds in Ukraine from 14 to 14.5 million tons,” Kernel said.
At the same time, since April 2024, the group’s enterprises have been experiencing problems with electricity supply caused by Russia’s attacks on Ukraine’s generating and distribution infrastructure. This has led to increased downtime and reduced productivity, although the impact is still manageable, the agricultural holding explained.
“Kernel also said that in June-July 2024, it plans to commission a sixth cogeneration thermal power plant with an installed electric capacity of 22.5 MW as a generating capacity at its recently launched oilseed processing plant in western Ukraine.
“This renewable energy capacity is of great importance, especially given the plant’s planned capacity and the upcoming power outages in Ukraine in the fall and winter of 2024,” Kernel emphasized.
In 2023, KSG Agro agricultural holding reduced its net loss by 30.9% to $1.16 million, while revenue increased by 13.8% to $18.79 million.
This data is presented in the company’s annual report on the Warsaw Stock Exchange.
“The increase in revenues in 2023 is largely due to the resumption of grain exports, which were limited in 2022 due to the beginning of Russia’s invasion of Ukraine. In addition, in 2022, the Group used more of its own grain for feed production rather than purchasing it, seeking to reduce dependence on external suppliers of feed ingredients due to wartime logistical reasons,” the document says.
It is specified that the total revenue from crop production last year amounted to $12.6 million compared to $4.5 million in 2022, but the net change in the fair value of crops was less than a year earlier – $1.6 million versus $4.6 million.
It is noted that as an alternative source of income to hedge against unpredictable weather conditions, KSG Agro used its agricultural equipment and expertise to provide tillage and similar land preparation services to other crop producers for a total of $2.5 million compared to $1.3 million in 2022.
Due to lower prices for agricultural products and higher sales costs, the gross profit of the agricultural holding fell 6.6 times last year to $0.48 million, and also recorded an operating loss of $1.62 million and negative EBITDA of $0.40 million, while a year earlier these indicators were positive – $0.44 million and $1.79 million, respectively.
It is also indicated that due to lower exchange rate losses, the total loss in 2023 decreased even more significantly – to $1.21 million from $4.31 million a year earlier.
According to the report, KSG Agro managed to almost halve its net debt last year to $15.63 million from $27.46 million due to a reduction in bank loans to $15.84 million from $27.74 million. The agricultural holding’s free cash flow at the end of 2023 was $0.21 million compared to $0.27 million a year earlier.
During the first quarter of 2024, the group repaid a total of $4.28 million of its existing loans from TAScombank and received new tranches totaling $2.30 million, as well as issued series C and D bonds of its key operating subsidiary KSG Dnipro for approximately $5 million, of which it placed series C bonds for $1.4 million.
The number of permanent employees of the agricultural holding decreased in 2023 to 234 from 274 a year earlier.
It is noted that the group expects the winter crop harvest in 2024 to be at least average.
As for pig farming, it is indicated that during 2023 KSG Agro gradually reduced the massive number of pigs at the farm in Niva Trudova. The main reasons were concerns about the general safety and biosecurity of the herd, as well as changes in the group’s strategy and general market conditions: less herd, more farms – to reduce the risk of losing the entire pig population in the event of a missile or drone strike, the agricultural holding began to distribute the herd to several locations.
The group’s management is currently negotiating ways to expand the number of farms under its management, either through a partnership program with other pig farmers or by leasing or buying additional farms, the report says.
It also indicates that, based on the results of the trials, most of the low-productivity sows were gradually removed from the main herd and sold during the year, and to replace them, KSG Agro is purchasing new sows of Canadian genetics, in particular, it plans to purchase another batch later in 2024. The fresh Canadian genetics are expected to enable the group to produce high-quality piglets that will be sold as piglets rather than being raised further on the group’s farms. It should also shorten the group’s production cycle, further reducing overall safety and biosecurity risks.
KSG Agro, a vertically integrated holding company, is, according to him, one of the top 5 pork producers in Ukraine. It is also engaged in the production, storage, processing and sale of grains and oilseeds. Its land bank is about 21 thousand hectares in Dnipropetrovska and Kherson regions.
KSG Agro earned $1.34 million in net profit in January-September 2023, up almost 14 times compared to the same period in 2022. Its EBITDA for the three quarters of 2023 increased by 67% to $4.54 million, and revenue increased by 16% to $11.9 million.
