Ukraine’s agrarian sector exports in July 2023 decreased by 29% year-on-year to 3.7 million tons due to the inability of transport to cross the border due to queues, the Ukrainian Club of Agrarian Business (UCAB) reported.
“The disappointing export results are primarily due to the stoppage of the “grain corridor” on July 18, as well as its low activity even before the termination. In July 2023, only 292 thousand tons (of agro-products – IF-U) were exported through this channel. Also, Russia’s shelling of the infrastructure of the Danube river ports had a negative impact on export volumes,” the report says.
In the structure of agricultural exports in July compared to June, UCAB analysts noted a 40% reduction in the export of grain crops (2.3 million tons), where corn accounted for 51% of supplies, wheat – 36%, barley – 13%.
A 12% drop in the index was also shown by cakes extracted in the production of vegetable oils: 320.7 thousand tons of them were exported in July. The share of sunflower cake accounted for 91%, soybean cake – 9%.
At the same time, analysts noted a 37% increase in exports of oilseeds – up to 330 thousand tons. Rapeseed accounted for 73%, soybeans – 23%, sunflower seeds – 3%.
According to UCAB data, the export of vegetable oils also showed positive dynamics – 549.4 thousand tons, which is 7% higher than in June. The share of sunflower oil amounted to 92%, rapeseed and soybean oil – 4% each.
“The biggest drop in export volumes was demonstrated by the positions having significant weight at their relatively low value. They were mainly exported within the framework of the Black Sea Grain Initiative. These are grain crops and oilcakes,” the business association emphasized.
Analysts explained the growth of oilseeds export volume by the beginning of harvest and the start of its export from the country.
“The lack of export opportunities through seaports, the destruction of the infrastructure of seaports of the Odessa region and river ports of the Danube, the risk of a continued ban on imports of a number of Ukrainian agro-industrial products in neighboring EU countries will have a very negative impact on our future exports. We will be able to export products not when the world needs them, but when we have the opportunity to do so, and with significantly higher logistics costs,” the UCAB summarized, while emphasizing that resumption of free navigation is necessary both for Ukraine and the world.
Imports of energy autonomy equipment, mln USD
Source: Open4Business.com.ua and experts.news
Ukrainian corn is in stable demand from a number of EU countries, which due to the abnormal heat will not receive their own corn crop, said the analytical cooperative “Pusk”, established within the framework of the All-Ukrainian Agrarian Rada (VAR).
“Ukraine exported about 1.2 million tons in July, but the off-season is coming, and only 0.5 million tons are contracted for August,” analysts said at a weekly briefing on Tuesday.
According to their information, the European market is seeing stable small demand from Italy and Spain, where the heat wave of up to 45℃ persists. Also, high temperatures in France are not conducive to the formation of corn crop, the country may not get its own crop. Some importers are buying grain corn now, as there are concerns about the supply of European corn.
The conditional average price of corn is around 175-185 EUR/ton and no significant changes in the market are expected in the near term. The new corn crop is indicatively priced at 150-160 EUR/tonne with delivery in October, but no forward contracts have been signed, experts said.
“It can be predicted that from the second half of August the market will activate,” predicted in “Pusk”.
A strategy session with the participation of experts, officials, MPs and lawyers was the beginning of work on the regulatory field for artificial intelligence (AI), it discussed the paths Ukraine can follow in the field of its legal regulation, said Deputy Prime Minister and Minister of Digital Transformation Mikhail Fedorov.
“We should not lag behind the rest of the world, but lead the AI trend. It is impossible to talk about a digital state if we do not form a progressive policy in the direction of artificial intelligence and agendu for the world “, – wrote Fedorov in his Telegram channel on Wednesday.
According to him, the use of AI in Ukraine is planned in various spheres, in particular, the Ministry of Digitization is developing a virtual assistant in “Diya”, the task of which is to quickly find answers to users’ questions. In addition, AI will help Gosstat to process and analyze data, added the head of the Ministry of Digitals.
Separately, Fedorov noted the usefulness of AI in military technologies. According to him, artificial intelligence helps to fix the movement of equipment and personnel of the enemy, to shoot down missiles, to more effectively target UAVs, etc.
“We are creating conditions for top international companies dealing with artificial intelligence to come to the Ukrainian market,” Fyodorov added.
Mining company Ferrexpo with assets in Ukraine in January-June this year due to the blockage of sea ports by Russia was able to supply pellets only to European countries and Turkey.
According to the semi-annual report of the company on Wednesday, Ferrexpo in the first half of the year-2023 all 100% of the realized products supplied to Europe, including Turkey, while in January-June-2022 this share was 92%, in the first half of the year-2022 – 79%.
Earlier it was noted that in H1-2022 the company increased the share of sales to Europe, including Turkey to 79% (in IH-2021 – 60%), Northeast Asia – to 5% (8%). Deliveries to the Middle East and North Africa were absent at that period (2%), as well as to North America (2%). Meanwhile, sales to Southeast Asia (SEA), including China, fell to 16% from 29%.
According to the report, the group was mainly limited to exports to Europe either by rail or inland waterways via the Danube River in the current year. It produced 1.967 million tons of pellets, operating one to two of four pelletizing lines, each capable of producing about 3 to 3.5 million tons of pellets per year, depending on the product types produced.
As at the end of July, the group operates one pelletizing line to reduce existing product inventories.
C1 production cost in H1-2023 was $71/tonne, down from H1-2022 ($85/tonne) due to the hryvnia devaluation in H2-2022 and lower prices for some consumables and the positive effect of energy savings. At the same time, iron ore prices in H1-2023 on the global market decreased by 5%, the outlook for the third quarter is slightly worse due to weak demand in Asia and increased iron ore supplies from Brazil and Australia.
Total selling and distribution costs in H1 2023 were $74 million (H1-22 – $147 million), mainly due to lower shipping volumes in the period due to the closure of Ukraine’s Black Sea ports in February 2022 and higher alternative freight costs that followed access to European customers. C3 freight rates declined 26% year-on-year to average $20/tonne in 1H 2023 as a result of lower global energy prices and lack of demand from Brazilian miners.
It is also stated that previously the group’s maritime logistics routes represented the cheapest and most efficient way to deliver products to customers. However, due to the Russian invasion of Ukraine, the group has had to adapt and establish new logistics corridors and relationships with logistics service providers and port operators. These routes rely heavily on rail, where capacity is limited and demand is high, including from businesses and industries, and transportation by barge is also limited and costly.
“The Group continues to explore its logistics options and has made progress in reducing transportation time and improving efficiency where possible,” the report said.
It also reminds that rail tariffs in July-2022 increased by 70% for 20 types of cargo, even when the group uses its own railcars.
During the first six months of 2023, the average monthly iron ore price remained in the range of $100 – $200/tonne, royalties for iron ore mining are charged to the group at a rate of 5% in this period.
Ferrexpo is an iron ore company with assets in Ukraine.
Ferrexpo owns 100% of Poltava GOK PJSC, 100% of Yeristovskiy GOK LLC and 99.9% of Belanovskiy GOK LLC.
Agrofirm Dobrobut from the group of companies of Astarta agro-industrial holding Astarta, the largest sugar producer in the country, has started sowing winter rape for the season-2024.
According to information on the website of the Warsaw Stock Exchange (WSE), the agroholding will reduce the area under rape by 12% in the new season and will allocate 12,000 hectares to it.
“Compared to last year, we reduced the sown area under rapeseed by 12%, but only at the expense of crop rotation,” the press service quoted Astarta’s director of agricultural production Vadim Skrypnyk as saying.
He noted that for the Poltava region, which is always subject to unfavorable weather conditions in summer, sowing winter crops is the least risky and allows you to get good yields. “In addition, we have noticed that early sowing brings a positive effect. Therefore, this year we start sowing earlier where possible,” he added.
According to the agricultural holding, Astarta will start sowing somewhat later in the western regions of the country due to a delay in winter wheat harvest due to weather conditions.
“Astarta is a vertically integrated agro-industrial holding operating in eight regions of Ukraine. It includes six sugar mills, agricultural farms with a land bank of 220,000 hectares and dairy farms with 22,000 cattle, an oil extraction plant in Globino (Poltava region), seven elevators and a biogas complex.
In the first half of 2023, Astarta’s revenue from sales of key products increased by 64.8% year-on-year to UAH 10.72 bln. The main contribution was made by sales of sugar – UAH 3.27 bln, which increased by 75.5%, corn – UAH 2.66 bln (+53.2%) and soybean meal – UAH 1.96 bln (+84.5%).
