Ukrainian mukomols and cereals producers began to master and gain a foothold in new markets and increase export volumes, in 2023 they can supply 150 thousand tons of flour to foreign markets, said the chairman of the association “Ukrpischeprom”, director of the union “Mukomols of Ukraine” Rodion Rybchinsky.
“In calendar year 2021 we exported 102 thousand tons of flour, in 2022 the active export began in September and reached 80 thousand tons. In the five months of this year, we have already exported 74,000 tons. With such dynamics, we see the possibility of exporting 150 thousand tons of flour by the end of the year,” he said during a discussion on the prospects of exports during the war, held by the Institute for Economic Research and Policy Consulting.
According to his information, the war has made significant changes in the export of flour and cereals and bran. Previously these products were exported by sea from the main shipment bases in Kherson, Nikolaev, and Odessa. Traditional importers of Ukrainian flour and cereals were UAE, Palestine, Somalia, Israel, and bran – Turkey, where 95% of them were sent by sea.
The war has made significant adjustments to the geography of sales of these products, and today the largest importers of Ukrainian flour are Moldova, Poland, Palestine, Romania, Croatia and Turkey, said Rybchynskyy.
In the EU countries, in particular Poland, Romania, Germany, Spain, Portugal, are actively exported cereals. Last year 68 thousand tons of cereals were exported to foreign markets, while during five months of 2023 – 38 thousand tons.
In this case, Rybchinsky noted a change in the ways of sending flour and cereals for export.
“We do not use the Black Sea Grain Initiative and the Danube ports. There the rent of one grain warehouse at a distance of 5-10 km from the quay wall can cost $100 thousand per month. Therefore, logistics related to work on the Danube, eat up all the possible earnings,” said the expert, adding that the main export of flour and cereals is carried by road and only 15% by rail.
According to the head of the industry association, exporters now have problems when crossing Western borders. Despite the electronic queue, cars with products stand in queues for 2-3 weeks.
“This has led to the loss of substantial contracts with Polish and Romanian retail chains, where Ukrainian suppliers have not been able to ensure timely delivery of products. Currently, Ukrainian mills have to work mainly with industrial processors,” Rybchynsky explained.
At the same time, he noted that Polish pasta made from Ukrainian flour has already appeared on the Ukrainian market.
The temporary suspension of exports of wheat, flour and sugar will ensure Moldova’s food security until the next harvest, Minister of Agriculture and Food Industry Viorel Gerciu said Thursday in parliament.
The minister did not predict the price of bread in autumn, but said that this year’s wheat harvest will be less than last year’s (900,000 tons instead of 1.7 million tons). But even this will be enough to cover domestic demand, which is estimated at 660,000 tons per year.
Referring to the supply of fertilizers in Moldova, disrupted due to hostilities in Ukraine, the minister said that the country consumes 270,000 tons of fertilizers annually. Until the end of February, the cost of this volume of fertilizers was estimated at $80 million, but now the price has risen to $220 million. “129,000 tons of fertilizers have already been imported to Moldova this year, which is enough to meet the needs of agricultural producers today,” Gerciu added.
Ukraine since the beginning of the 2019/2020 marketing year (MY, July-June) has reduced production of bread and bakery goods by 12.3%, and in March this year compared to March 2019 by 13.8%, the UkrAgroConsult analytical agency said on its website.
According to the agency, production of flour since the beginning of the current MY has decreased by 3.1%, and in March this year from March of the past year by 8.8%.
UkrAgroConsult noted that in March production of bran also decreased by 8.3%, and feed by 6.1%.
KSG Agro next year plans to boost grain and wheat flour export to Oman, Qatar, Libya and Angola 2.8 times compared with 2019, to 50,000 tonnes.
The holding said in a press release that in 2019 KSG Agro plans to export up to 18,000 tonnes of grain and flour to these countries, and at present, 11,800 tonnes of goods have been delivered.
The company said that in 2019, the agricultural holding exported cereals and flour exclusively to Oman, Qatar, Libya and Angola.
“We are very interested in exporting to the markets of the Middle East and Africa, where there is a demand for our products. Expanding agricultural exports allows us to diversify sales channels and receive foreign exchange earnings, as well as increase margins,” KSG Agro Board Chairman Serhiy Kasianov said.
In 2018, KSG Agro delivered 5,000 tonnes of corn to Oman and Qatar, in 2019 the export of this crop to two countries amounted to 5,300 tonnes. In addition, this year, the agricultural holding exported feed barley to these two countries in the amount of 4,000 tonnes. Also in 2019, KSG Agro delivered 2,500 tonnes of wheat flour to Libya and Angola.
“Thus, the total export volume of agricultural products of the agricultural holding in 2019 increased 2.4 times compared to 2018,” KSG Agro said.
KSG Аgro is a vertically integrated agricultural group, working in almost all the segments of the agricultural market, including the production, storage, processing, and sale of agricultural products.
Ukraine saw a record high export of 50.4 million tonnes of grain, leguminous crops and flour in the 2018/2019 marketing year (MY, July 2018 through June 2019), which was 23% more than on the same date of the previous MY.
The Agrarian Policy and Food Ministry reported with reference to the State Fiscal Service, that maize exports totaled 29.82 million tonnes, shipments of wheat and wheat-and-rye blends abroad totaled 15.6 million tonnes, while 3.7 million tonnes of barley and 87,800 tonnes of rye were exported during the reporting period.
Some 301,280 tonnes of flour were also exported by the said date.
As reported, Ukraine in MY 2017/2018 exported 40.9 million tonnes of grain and flour.
According to the Agrarian Policy and Food Ministry, Ukraine exported 1 million tonnes of grain and leguminous crops and 10,500 tonnes of flour from July 1, when the new 2019/2020 marketing year started, to July 12, 2019.
PJSC Agrarian Fund sold 700 tonnes of grain, 34,200 tonnes of flour and 103,000 tonnes of mineral fertilizers in April-June 2018, the Ministry of Agrarian Policy and Food reported on the website. In the second quarter of this year, the Agrarian Fund’s revenue amounted to UAH 1 billion, the company’s net profit after the payment of corporate profit tax was UAH 2.2 million against an expected loss of UAH 28 million, it said.
The ministry says that flour was sold by the Agrarian Fund in wholesale and retail batches, including in retail outlets under its own brand.
