Business news from Ukraine

Business news from Ukraine

Barley exports will be halved due to lower demand from China

In September, Ukraine will cut barley exports by more than half due to a reduction in Chinese purchases of the crop, according to the analytical cooperative Pusk, created within the framework of the All-Ukrainian Agrarian Council (AAC).
“The Ukrainian barley market is undergoing significant changes that affect export prospects. As of August 19, exports of this grain reached 315 thsd tonnes, but preliminary forecasts for September are worrying. The volume of contracts for August is 600 thousand tons, while only 280 thousand tons are contracted for September. This is almost half as much,” analysts said.
In their opinion, the main reason for the future decline in exports is the decrease in demand from China, which previously provided more than half of Ukraine’s barley exports.
“The Chinese factor plays a significant role here, as China used to account for 55-56% of the geographical structure of Ukrainian barley exports. China is not expected to return to the Ukrainian grain as actively, but will probably switch to Australian barley, which will be delivered in December-January. Without Chinese contracts, monthly exports of Ukrainian barley will not exceed 300 thousand tons,” the experts explained.
They pointed out that the decline in demand from China is already beginning to be felt in the domestic market. A number of traders stop accepting barley, switching to other crops such as corn.
At the same time, they point to a significant correlation between barley and wheat markets and predict that the expected rise in wheat prices will also contribute to the growth of barley prices.
“The notional barley prices are still in the range of $170-172 per ton. We can expect that the wheat market will pull up the barley market. So, by the end of August and beginning of September, there may be a certain increase in barley prices. But starting in September, barley may become a more niche crop,” Pusk summarized.

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Ukraine exported record 339 thsd tonnes of barley in March

In March 2024, Ukraine exported 339 thsd tonnes of barley, which is a record for the season, while prices for Ukrainian barley on the world market have leveled with corn, which contributes to the growth of demand, according to the analytical cooperative “Start”, created within the framework of the All-Ukrainian Agrarian Council (AAC).

Analysts predict that Ukraine will be able to export another 200 thousand tons of barley in April and May.

“In the fodder group of grains, prices have formed in favor of barley: corn is $10/ton more expensive than barley. Thus, Ukrainian barley has become more competitive and is in demand from the EU and Turkey. The main barley trade takes place in Odesa ports, where the notional price is about $145/ton. We predict that the price tags will rise by another $1-2 per ton this week,” the experts said.

They said that barley prices on the domestic market have also increased.

“A week ago, processors could buy barley at 4700-5000 UAH/ton, as of April 2, real prices rose to 5200-5400 UAH/ton on a CPT basis,” Pusk stated.

Experts also noted that barley is actively sown in Ukraine.

“The sowing campaign continues, almost 292 thou hectares have been sown, which is a normal pace. According to the forecasts of the Ministry of Agrarian Policy, barley planted areas will amount to about 810 thou hectares. The main regions where barley is cultivated are Odesa and Mykolaiv. The farther away from the port the region is located, the lower the profitability of barley cultivation there,” they explained and added that the indicative prices of the new barley harvest are $145-155 per ton on CPT port basis.

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Ukrainian barley will be exported by 60% by road and rail through Romania

Ukrainian barley in the season-2023 will be 60% exported by road and rail through border crossing points with Romania, the analytical cooperative “Pusk”, established within the framework of the All-Ukrainian Agrarian Rada (UAR), reported.

According to the report, such a decision is explained by the rising cost of freight, as well as the threat of Russian attacks on the infrastructure of the Danube ports.

“Farmers are trying to export barley on their own for the most part. (…) Traders are not too interested in barley trade yet. Rising freight costs create powerful constraints. There is a demand for Ukrainian barley, but the grain is too expensive: for liquidity in river ports the price tag should be 110-$120/ton on terms of CPT, but farmers will not supply at such a low price”, – analysts explained.

According to their information, market participants are afraid of repeated Russian attacks on the infrastructure of the Danube ports. Besides, it is more profitable for agrarians to take barley to the borders than to Reni, particularly to Chop, where the price is $140/ton. Even farmers from the central regions have started to be interested in auto-delivery of barley to Romania – logistics is cheaper, experts added.

They also noted the activity of barley processors on the barley market. Their purchase prices are now 4500-5200 UAH/ton.

“In the first week of September, the conditional prices for barley can grow to $195-202/ton on the basis of DAP Constanta, to $142-147/ton – on the basis of SRT river ports”, – predicted in VAR.

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Harvesting in Prometey started with barley

Harvesting of current crops in the Prometey Group started with winter barley. Areas with this crop are located mainly in Bashtanka district of Nikolaev region.
Harvesting has already been carried out on an area of 216 hectares, with an average barley yield of 78.5 centners per hectare.
“This year’s harvest has pleasantly surprised us – says agronomist-technologist Ilya Troitsky, – and although Bashtanka district is famous for barley, it is traditionally grown here, this season’s figures exceeded expectations”.
One day Prometey agrarian enterprises will start harvesting winter wheat.

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Turkey imposes 130% duty on imports of wheat, barley and corn

Turkey will impose an import duty on wheat, barley and corn starting from 1 May this year. The Russian Union of Grain Exporters does not rule out its cancellation in the new agricultural year, which begins July 1, 2023.
As the official gazette of Turkey T.C. Resmi Gazete reported, from May 1 the duty rate will be 130% instead of 0%. This measure is aimed to protect domestic producers on the eve of the new season.
Earlier, the Ukrainian Agricultural Policy Ministry said that this measure by Turkey will not affect sales of Ukrainian agricultural products as Ukrainian grain is mainly used for processing and subsequent sale to third countries, in which case the duty is not imposed on it.
At the same time, the ministry explained that Turkey has two customs regimes for imports. The first applies to products that are used for domestic consumption, and for such products the Turkish government previously announced a temporary zero rate of duty. After the expiration of the preferential regime returns the rate of 130%. Grain from Ukraine under the first regime, for which the duty is returned, goes to Turkey about 5% of all exports to this country, the Ministry of Agrarian Policy specified.
The second regime exists for products that go on sale to third countries before or after processing. Duty is not paid for this regime.
According to the State Customs Service, during the first quarter of this year, Turkey was the largest exporter of Ukrainian wheat, which was supplied for $ 168.8 million, or 17.7% of its total exports, including $ 70.9 million, or 20.5% in March.
Barley from Ukraine to Turkey during the first quarter of this year was imported at $ 52.7 million or 42.1% of total exports of this crop, including $ 17.3 million or 38.8% in March.

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Two ships with Ukrainian corn and barley departed for Israel and the Netherlands

Two dry cargo ships carrying corn and barley departed Ukrainian ports on Monday, the Joint Coordination Center (JCC) reported.
“Two ships left Ukrainian ports on January 23, carrying a total of 42,560 tons of grain and other food as part of the Black Sea Grain Initiative,” the report said.
Dry cargo ship Amyntor will deliver 27 260 tons of corn to the Netherlands, ship Ata will carry 15.3 thousand tons of barley to Israel.
Seven ships are also headed to Ukrainian ports, which on Monday passed through the maritime humanitarian corridor.
“As of January 23, the total tonnage of grain and other agricultural products exported from the three Ukrainian ports is 18,372,920 tons. A total of 1,340 vessels have so far been allowed to move: 667 to arrive at Ukrainian ports and 673 to leave them,” the JCC summarized.

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