The Turkish vessel Polarnet, which left the port of Chornomorsk (Odessa region) on August 5 with 12,000 tons of corn from the Kernel agricultural holding, arrived at the Turkish port of Derince on August 8.
Kernel completed one of the most important missions – the first ship with Ukrainian grain arrived at its destination. The shipment was carried out as part of the initiative for the safe transportation of grain and food from Ukrainian ports,” the group of companies wrote on Facebook on Tuesday.
It is specified that the ship was loaded with corn at the Transbulkterminal grain terminal in Chornomorsk, which is part of Kernel. In the 2020/2021 marketing year (MY, July-June), the terminal handled 7.6 million tons of grain crops, which is 22% more than in MY 2019/2020, and became the largest in the country in terms of transshipment of agricultural products.
Agropromholding emphasized that Ukrainian agricultural exporters remain key suppliers of foreign exchange earnings to Ukraine, which is an important positive factor for the economy of the warring country.
“If we manage to maintain the trend and increase exports, farmers will not have to reduce the area under crops, and Ukraine will feel a deficit in state budget revenues,” Kernel summed up in the message.
Before the war, Kernel ranked first in the world in the production of sunflower oil (about 7% of world production) and its export (about 12%), and was also the largest producer and seller of bottled sunflower oil in Ukraine. In addition, the company was engaged in the cultivation of other agricultural products and their sale.
Its largest co-owner through Namsen Ltd. is Ukrainian businessman Andrey Verevsky with a share of 41.3%.
The agricultural holding in fiscal year 2021 (FY, July 2020 – June 2021), increased its net profit by 4.3 times compared to FY 2020 – up to $513 million, its EBITDA increased 2.1 times – up to $929 million, revenue – by 38%, to $5.65 billion.
The U.S. Department of Agriculture (USDA) in its report for June published on Friday increased the forecast for Ukrainian corn crop for trade year (TY) 2022/23 by 5 million tonnes compared to the forecast a month ago, to 25 million tonnes, while keeping the export estimate at the level of 9 million tonnes.
U.S. experts increased the forecast for carryovers for 2022/23 TY by 4 million tonnes, to 12.07 million tonnes compared to 6.77 million tonnes for 2021/22 TY.
In addition, USDA raised the estimate of domestic consumption in 2022/23 TY by 1.5 million tonnes, to 10.7 million tonnes.
According to the report, in general, the forecast for the feed grain harvest in Ukraine for 2022/23 TY has been increased by 5.2 million tonnes, to 31.76 million tonnes, although at the same time, the export estimate has been reduced by 0.2 million tonnes, to 10.83 million tonnes.
U.S. experts have increased the forecast of feed grain carryovers following the results of 2022/23 TY by 3.9 million tonnes, to 13.06 million tonnes compared to 7.77 million tonnes at its beginning.
In addition, USDA raised the estimate of domestic consumption of feed grains in 2022/23 TY by 1.5 million tonnes, to 15.65 million tonnes.
The U.S. Department of Agriculture recalled that in 2020/21 TY, the wheat harvest in Ukraine amounted to 25.42 million tonnes, and exports reached 16.85 million tonnes. According to its estimates, in 2021/22 TY, with a crop that has grown to 33.01 million tonnes, exports will increase to 19 million tonnes, and carryovers – from 1.51 to 5.61 million tonnes. In addition, U.S. experts expect domestic wheat consumption in Ukraine to grow to 10 million tonnes in 2021/22 TY from 8.7 million tonnes in the previous TY due to livestock.
As for corn, according to the report, in the past 2020/21 TY, its harvest in Ukraine was 30.3 million tonnes, and exports – 23.86 million tonnes. According to USDA estimates, in this ending trade year, with a corn crop that has grown to 42.13 million tonnes, its exports will decrease to 23 million tonnes, and carryovers will jump from 0.83 to 6.77 million tonnes. In addition, U.S. experts expect domestic corn consumption in Ukraine to grow to 13.2 million tonnes in 2021/22 TY from 7.1 million tonnes in the previous TY, also due to livestock.
In general, the feed grain harvest in Ukraine in 2020/21 TY, according to the U.S. Department of Agriculture, was 39.59 million tonnes, and exports were 28.15 million tonnes. According to USDA estimates, in this ending TY, with a coarse grain harvest that has grown to 53.51 million tonnes, it will increase only to 29.06 million tonnes, and carryovers will jump from 1.65 to 7.77 million tonnes. In addition, the experts expect in 2021/22 TY an increase in domestic consumption of coarse grains in Ukraine to 18.37 million tonnes from 12.41 million tonnes in the previous TY, also due to livestock.
The Czech railway carrier ČD Cargo delivered the first train with 1,800 tonnes of corn from Ukraine to the German port of Brake for subsequent shipment to Egypt on a grain carrier ship.
Such a change in logistics routes is necessary to free up silos in Ukraine to receive a new crop, and to avoid starvation in North Africa and Asia that consume Ukrainian agricultural products, according to a posting on the website of the publication zdopravy.cz (the Czech Republic) on Tuesday.
“We see this as a help and at the same time a business opportunity. Due to the Russian invasion, Ukraine cannot export grain in the traditional way through the Black Sea ports. A new harvest is approaching, and the silos in Ukraine are still full. Therefore, it is necessary to decide how to get at least part of the stocks by rail across Europe,” Board Chairman of ČD Cargo Tomáš Tóth was quoted as saying.
The Czech railway carrier returned with a batch of corn from Ukraine, where it had previously delivered a batch of humanitarian aid and military equipment.
At the same time, railway exports from Ukraine are fraught with problems due to different gauges in the EU and Ukraine, as well as insufficient capacity of logistics routes.
“Firstly, these are different dimensions: carriers can either pick up wheeled carts or reload the cargo. However, transshipment options are limited. Another bottleneck is, respectively, border crossings. Their capacity is significantly limited, for example, in the Elbe valley between Děčín and Dresden. Unloading capacities in ports are also not unlimited,” the publication said.
Zdopravy.cz recalled that Ukraine is one of the main suppliers of grain and other crops to the world market. Due to the blockade of its seaports by Russian ships, wheat exports have stopped, the country needs to export about 20 million tonnes of grain to avoid starvation in the countries of North Africa and Asia, which traditionally purchase Ukrainian agricultural products.
Agrosem LLC (Kyiv), a distributor of agricultural products, seeds and agricultural machinery, has launched a railway route from Ukraine to Austria, which will export batches of Ukrainian corn on a weekly basis.
Agrosem’s Facebook page reported on Tuesday that the first train of 25 hopper cars arrived at the Austrian customer on May 6. Based on the average carrying capacity of grain wagons of 72 tons, the volume of a weekly consignment of corn sent to Austria will be approximately 1.8 thousand tons.
“Customers in Ukraine and Austria are happy with the result, but the process was complicated, especially due to the difference between the width of the tracks in Ukraine and Europe. This required finding stations where it would be possible to transfer from the Ukrainian train to the Austrian one, and it was also necessary to find out the availability free wagons in both countries. But we are confident that the train will run weekly, delivering products to Europe,” the company explains.
According to the director of “Agrosem” Oleksiy Kulik, whose words are quoted by the press service of the company, it is now very important to support Ukrainian farmers and find solutions for the export of grown products. “We must do everything to ensure that Ukrainian farmers can sell their products in Europe at market prices,” he stressed.
Ukrainian Ambassador to Austria Vasyl Khyminets, Minister of Agriculture, Forestry, Ecology and Water Resources of Austria Elisabeth Kostinger, General Director of the Austrian Federal Railways Andreas Matt and Director of Agrosem Kulik participated in the organization of the export route.
“Agrosem” is the official distributor in Ukraine of agricultural machinery and spare parts, seeds, fertilizers and plant protection products. The company offers solutions in the field of precision farming, telematics systems, automated and unmanned vehicles aimed at improving product efficiency and saving resources in the agricultural production process.
According to the Unified State Register of Legal Entities and Individual Entrepreneurs, the ultimate beneficiary of Agrosem LLC is Oleg Zvyagintsev with a 35% stake in the company’s authorized capital, Igor Zvyagintsev (15%), Alexei Kulik (15%) and US citizen Alexander Weiner (35%).
The first cargo of Ukrainian corn weighing 71,000 tons since the beginning of the Russian military invasion of Ukraine went on a P-class vessel to the recipient from the Black Sea port of Constanta (Romania), the Reuters website reported on Friday.
According to him, this port has already received about 80 thousand tons of Ukrainian grain, and the same number is on the way to it.
As Ukraine’s seaports were blocked following Russia’s aggressor country’s invasion of Ukraine in February, the world’s fourth-largest grain exporter has been forced to ship to Romania by train across its western border or through its small river ports on the Danube River.
“Supporting the export of Ukrainian grain means preventing a colossal wave of world hunger provoked by the blockade of Ukrainian ports. Compared to the initial moment, when everyone was looking for alternative transport corridors for grain exports, they are gradually being formed,” Viorel Panaita, president of Comvex port operator, who organized deliveries of a batch of Ukrainian corn.
According to Comvex, the seaport of Constanta owns the fastest-loading grain terminal in Europe, capable of handling up to 70,000 tons of crops per day.
As reported, Ukrainian and Romanian ministries at the end of March began negotiations on the export of agricultural products from Ukraine through European seaports, including the Romanian port of Constanta.
Ukraine has tens of millions of tons of agricultural products in warehouses, but due to a naval blockade by the aggressor country, the Russian Federation cannot supply it to its traditional markets.
The countries bordering Ukraine have responded to its problem with the export of agricultural products, and have already significantly simplified the procedures for registering freight traffic or are actively working on it. In particular, Romania, Slovakia, Hungary, Lithuania, Latvia, Estonia, as well as Italy, Turkey, Bulgaria, Georgia, Denmark, Greece, Austria introduced liberal conditions for Ukrainian carriers.
Before the Russian military invasion, Ukraine monthly exported about 5 million tons of agricultural products through the ports of Odessa and Nikolaev, but now, due to their naval blockade by the Russian Federation, it can transport about 500 thousand tons of grain monthly. This leads to a monthly shortfall of about $1.5 billion in export earnings for the country.
The Ukrainian Grain Association (UGA) has agreed to limit the export of corn in the 2020/2021 MY to 24 million tonnes by the end of June in the grain memorandum, since given the association’s export forecasts and the practice of such memorandums, the practical implementation of such a limitation is unlikely.
“The introduction of the maximum corn export volume in the memorandum between the Ministry of Economy and business associations representing participants in the grain market is rather a symbolic step to ensure predictability and tranquility in the grain market,” the UGA said on its website.
The association emphasized the absence of grounds for statements about the likelihood of a shortage of corn on the Ukrainian market. According to its estimates and official statistics, with a harvest of this MY of about 30 million tonnes and internal needs of about 5 million tonnes, exports by mid-January amounted to about 10 million tonnes, of which 2 million tonnes was corn from the previous MY. The UGA also recalled that this year corn exports in mid-January lagged behind last year by almost 3.5 million tonnes.
The association predicts that in the future the rate of export will decrease, as Ukraine has already passed the peak period of export of this crop. The UGA also believes that high prices for corn and benchmarks for its export will give producers a positive signal to expand the area under this crop in 2021.
In addition, the UGA notes that for all the years of the memorandums and the similar restrictions contained in them with respect to wheat, they have never been applied in practice.
