In a conversation with the Secretary of State of the Presidential Chancellery, Andriy Yermak expressed hope that Ukraine’s neighbors would abandon the blockade of Ukrainian agricultural exports after September 15.
“The interlocutors discussed in detail the issue of ensuring the export of Ukrainian grain by land to the EU countries in the context of the continued blockade of Ukrainian ports. The head of the Presidential Office expressed hope that Ukraine’s neighboring countries would refrain from imposing unilateral restrictive measures on the export of Ukrainian agricultural products after September 15,” the press service of the Presidential Office said in a statement on Sunday following the meeting in Jeddah.
“During a meeting with the State Secretary of the Office of the President of the Republic of Poland, Head of the Bureau of International Policy Marcin Przydach, the head of the office expressed gratitude to Polish partners for their comprehensive assistance and solidarity with Ukraine in countering the armed aggression of the Russian Federation,” the statement also said.
The press service also reports that “Yermak praised Poland’s readiness to join the implementation of the Ukrainian peace formula.”
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.
Kernel Agroholding, one of the largest in Ukraine, processed 650.4 thousand tons of sunflower seeds in the fourth quarter of fiscal year 2023 (April-June), a 4-fold increase compared to the same period last FY.
According to the company’s report, processing was down 13% quarter-on-quarter, reflecting the usual sunflower seed shortage near the end of the season, which forced three of the group’s six operating plants to temporarily stop processing oilseeds in May-June.
“Two processing plants owned by the Group remain inaccessible in the high-risk area of the Kharkiv region with regular shelling by Russian occupiers,” the report states.
Overall, in 2023 FG processing grew by 15% to 2.51 million tons.
According to the report, vegetable oil sales in April-June 2023 increased by 14% quarter-on-quarter to 312,700 tons, including 21,000 tons of bottled sunflower oil, and the growth was fivefold compared to the fourth quarter of last year.
“The group continues to prioritize vegetable oil and meal exports over grain exports, given the more attractive margins in the oilseed processing value chain compared to grain export operations,” it said.
For the entire 2023 FY, sales reached 1 million 132.7 thousand tons, exceeding the previous FY by 17%.
It is pointed out that Kernel’s silo loadings in the fourth quarter of FY 2023 were seasonally insignificant at 98,000 tons, 50% higher than the fourth quarter of last year. As a result, total intake during FY 2023 was 2.83 million tons, down 32% from FY 2022.
According to the report, the transshipment volume of export terminals in Ukraine in April-June 2023 decreased by 13% quarter-on-quarter to 933.1 thousand tons, while there was no transshipment in the same period last year.
Overall for FY 2023, Kernel terminals transshipped 4 million 437.7 thousand tons of goods, 39% less than a year earlier, which the company attributed to failures in the grain deal.
“Russia terminated the grain deal on July 18, 2023. Thus, the Group’s future ability to export goods through Ukrainian Black Sea ports is unclear,” the report states.
“Kernel” recalled that on July 19, its assets in the port of “Chernomorsk” were subjected to a massive missile attack from Russia. As a result, grain transshipment facilities and grain stored in the port were significantly damaged. According to initial estimates, it will take considerable time to return the assets to operation.
According to the report, the group’s grain exports from Ukraine in the fourth quarter of FY 2023 amounted to 755,000 tons, down 8% from the previous quarter but 6 times higher than in the fourth quarter of FY 2022.
On a year-on-year basis, Kernel’s grain export volumes more than halved year-on-year to 3 million 833.2 thousand tons, the document specifies.
“Kernel” before the war ranked first in the world in the production of sunflower oil (about 7% of world production) and its export (about 12%), and was the largest producer and seller of bottled sunflower oil in Ukraine. In addition, the company was engaged in the cultivation of other agro-products and their sales.
Kernel’s net profit for the first nine months of 2023FY increased by 36% to $437 mln, while revenues fell by 45% to $2.715 bln.
Soybean exports from Ukraine in September-June 2022/23 marketing year (MY), according to operational data, reached almost 3 million tons, which has already become a record seasonal volume of shipments to foreign markets in history, exceeding the previous maximum of the 2016/17 season as a whole (2.9 million tons), the analytical agency “APK-Inform” reported.
“The main importer of Ukrainian oilseeds in the current season remains the European Union with a share of 47% against 40% in 2021/22 MY and an increase in relation to exports in the same period of the previous season in 3.1 times,” the analysts noted.
At the same time, according to the agency, Turkey retains the 2nd place in the ranking of importers of Ukrainian soybeans with a share of 32% against 36% in total exports of this product from Ukraine in the last MY. In this country for 10 months of 2022/23 MY supplies increased by 2.4 times.
Analysts also pointed to a significant increase in shipments to Egypt, especially in May-June of the current season. The share of this country in total soybean exports from Ukraine increased to 15% against 2% in the season 2021/22, while the volume of oilseed shipments in this direction increased 17 times to 440 thousand tons.
Ukrainian producers of meat and meat products have asked the Ministry of Agrarian Policy and Food to consider the possibility of exporting these products to China, the press service of the ministry said.
“We specifically met with specialized associations and representatives of the State Consumer Service before the trip of the Ukrainian official delegation to China, where the details of cooperation in terms of exporting our meat, in particular pork, will be discussed. It is important for us to discuss all the details between market participants so that this issue could be solved efficiently,” First Deputy Minister of Agrarian Policy and Food Taras Vysotskyy said on Tuesday at a meeting of the working group on the development of the meat industry, as quoted in the press release.
The Ministry of Agrarian Policy and Food noted that China is one of the most attractive markets for Ukrainian exporters of poultry, beef and pork meat, as the largest number of applications Ukrainian meat exporters currently receive is from the Chinese market. Because of COVID-19 and the war, exports, particularly of beef, to this country have been suspended.
“Currently, there is a certain warming in trade relations between Ukraine and China and the list of our exporters of beef, pork continues to expand. Also on the agenda is the issue of poultry meat exports,” – stated in the message.
The agency specified that information on key issues has already been exchanged with the Chinese customs in order to prepare bilateral meetings between the countries, which will be held in the near future.
Ukraine increased export of beef in January-May 2023 by 3.6 times, to 9.6 thousand tons and increased revenues from export operations by 2.6 times, to $38.1 million, according to the press service of the Ukrainian Club of Agrarian Business (UCAB).
The press-release notes that May was the most effective in this period: Ukrainian producers sold abroad 2.5 thousand tons of beef, which is 42% more than in the previous month.
“With the start of a full-scale war, opportunities to export meat and meat products from Ukraine became very difficult. Before the war, the share of beef transported by road was only 22.4% (77.6% was exported by sea). However, even under such difficult conditions, the geography of supplies has not changed. If Ukrainian exporters keep the deliveries at the same level till the end of the year, we will be able to approach the volumes of 2021”, – forecasts Maxim Gopka, analyst of UCAB.
The largest importers of Ukrainian beef in January-May this year were China – 5.8 thousand tons, Uzbekistan – 1.04 thousand tons, Azerbaijan – 1.06 thousand tons and Kazakhstan – 590 tons.
At the same time, UCAB notes that access to European markets is important for the Ukrainian beef market, because of the closed ports logistics is very expensive, which does not allow the industry to operate efficiently.
The report indicates that beef prices in the EU countries are at a high level, although the consumption of this type of meat by the population is gradually decreasing. This trend is expected to continue in the coming years. According to forecasts by the European Commission, cited by analysts, beef production in the EU may decrease by 1.6% in 2023, which will keep prices steadily high even further.
The UCAB believes that if Ukrainian products are allowed to enter the EU market in the near future, it will, on the one hand, support domestic consumption in the EU and, on the other hand, stabilize the domestic industry. In particular, Ukrainian producers will be able to recover by working more efficiently in compliance with all phytosanitary norms and implementing a policy of decarbonization, the business association believes.
At the same time, due to small export volumes of Ukrainian beef compared to other countries, it will not hurt local players in the EU market. In addition, it will help European producers to steadily export their own products to global markets, the UCAB believes, as the supply of beef in the world remains low against high demand.