Prices for Ukrainian wheat, corn rape and sunflower remained unchanged over the past week of January 5-12, while soybean prices are rising towards Poland and Italy, where premiums for it may reach EUR20/tonne.
As reported by brokerage company Spike Brokers (Kiev) in Telegram-channel on Thursday, last week, it concluded deals on DAP terms (seller bears the risk for the cargo before delivery to the destination) for the delivery of wheat to Ukrainian ports in January-February for 8 thousand UAH / ton. UAH/ton, corn to Ukrainian ports and the Slovakian border for $208/ton and $230/ton, soybeans (GMO) to Poland for $528/ton and sunflower to Romania for $540/ton.
According to the brokerage, corn prices in Ukraine remain unchanged from last week. The latest indications of buyers for last week: DAP Poland (border) $210-220/ton, DAP Hungary – $220-230/ton, DAP Romania (border) – EUR200-210/ton.
In turn, a stable supply of wheat in the world has not allowed prices to rise last week, the Ukrainian wheat is trading at stable levels of $205-210 for feed quality and $220-225 for food quality in the direction of DAP ports Odessa, Pivdenniy and Chornomorsk. Latest buyer indications: DAP Poland (border) – $220-240/ton, DAP Hungary (border) – EUR200-220/ton, DAP Ukraine (ports) – $205-225.
According to the trader, the purchasing prices for sunflower remain at the level of the previous week, although its supply began to increase in the direction of Bulgaria, Romania and Hungary. In addition, the premium for high oleic sunflower remained at $35/ton. The latest indications of sunflower seed buyers are DAP Bulgaria (center) – $540-555/ton, DAP Romania (center) – $530-540/ton, DAP Hungary (center) – $530-555/ton.
In addition, during the week prices for rapeseed from Ukraine did not change due to the oversaturation of the European market. Latest buyer indications: DAP Germany (east) – EUR530-545/ton, DAP Poland (west) – EUR540-560/ton, DAP Slovakia (west) – EUR540-550/ton.
“There is a recovery in demand from the Italian and Polish soybean markets. The premium for NOT GMO soybeans is up to EUR20/ton in the direction of Italy. Demand for GMO soybeans at Ukrainian ports remains at $460-470 DAP,” the brokerage specified.
Latest indications of soybean buyers for the week: DAP Ukraine – $460-470, NOT GMO DAP Italy (south) – EUR550-560, GMO DAP Italy (south) – EUR535-540.
Nigeria intends to implement new logistics projects to increase and make more predictable the exports of agricultural products from Ukraine, a similar intention announced earlier by Senegal.
The Minister of Agrarian Policy and Food of Ukraine Mykola Solskyi has reached the relevant agreements during the meeting with the Minister of Foreign Affairs of the Federal Republic of Nigeria Jeffrey Onyeama and the Minister of Agriculture and Rural Development Mohammad Mahmoud Abubakar, the website of the Ministry of Agrarian Policy reported on Wednesday evening.
It is specified that the meeting took place within the framework of the visit of the delegation of the Ukrainian Ministry to the countries of Africa.
The parties discussed opportunities for cooperation and expansion of trade relations between the countries, in particular the creation of a logistics hub for permanent supplies of agricultural raw materials and food products.
As reported, on January 9, Solskyy signed a memorandum of understanding in Senegal, which provides for the development of bilateral trade in agricultural products, cooperation in scientific research, investment, relations between public institutions and private organizations of Ukraine and Senegal.
It also refers to the possibility of storage of Ukrainian grain in the so-called grain hubs. At the same time, the head of the Ministry of Agrarian Policy said at the meeting that Ukraine is ready to export to African countries not only agricultural products, but also other goods, but it is necessary to focus on the development of logistics.
The Joint Coordination Center (JCC) reported that due to unfavorable weather conditions, vessels were unable to leave Ukrainian ports during Tuesday.
“On January 10, due to unfavorable weather conditions, not a single vessel left Ukrainian ports within the framework of the Black Sea grain initiative,” the report reads.
It is noted that “due to the strong wind and large waves, the team of joint inspection was not able to board the vessels to conduct inspections”.
On January 9, dry cargo vessels were also reportedly unable to leave Ukrainian ports due to bad weather.
Five dry-cargo carriers headed for Ukrainian ports, which passed through the maritime humanitarian corridor on Tuesday.
The SCC reported that “76 applications for participation in the initiative have been submitted.”
“As of January 10, the total tonnage of grain and other agricultural products exported from the three Ukrainian ports is 16,945,661 tons. A total of 1,264 dry cargo ships have been allowed to move so far: 631 to arrive at Ukrainian ports and 633 to leave them,” summarized the JCC.
Ports of “Big Odessa” on Thursday sent 221 thousand tons of agricultural products in the framework of the “Grain Initiative”, said the Ministry of Infrastructure of Ukraine.
“Today a caravan of five ships left the ports of “Big Odessa”, which will deliver 221 thousand tons of agricultural products to Africa, Asia and Europe, including the bulk carrier Sea Bridle with 25 thousand tons of agricultural products for Libya,” the Ministry noted.
According to him, since the beginning of the grain corridor 12 ships with 305 thousand tons of Ukrainian grain to this African country.
The Ministry noted that there are 29 vessels in the ports, involved in the “grain initiative”. More than 1 million tons of Ukrainian agricultural products are loaded on them.
“Grain corridor” is also moving two vessels for the loading of 89 thousand tons of agricultural products.
At the same time in the Bosporus 92 vessels are waiting for their turn to be inspected by the SCS. Over the past day, seven ships received approval for further movement after the inspection.
According to the information of the Ministry of Infrastructure, at least 12 inspections per day are required for continuous movement through the grain corridor.
A total of 574 vessels have left the ports of Greater Odessa since August 1, which exported 14.6 million tons of Ukrainian food to Asia, Europe and Africa.
The forecasted gross harvest of grain crops in Ukraine in 2023 could be 34 million tons, which is 37% less than in 2022 and 60% less than in 2021, while the yield of oilseeds is expected to be 19.3 million tons, which is 13% more than in 2022 and 15% less than in 2021.
As reported on the website of the Ukrainian Agribusiness Club Association (UCAB) on Friday, such a reduction in the grain harvest is caused by the reduction of cultivated areas under crops next year by 45%, to 8.7 million hectares.
The reasons for the reduction in the grain harvest next year will be a decrease in the total sown area, a change in the structure of crops in favor of oilseeds and lower yields of grain crops.
UCAB noted that of the 28.4 million hectares under cultivation in 2021, by December 2022 there are 24.6 million hectares of agricultural land (86% of the total area) in the controlled territory of Ukraine, of which 3.8 million hectares are not suitable for agricultural work due to their proximity to the front lines, contamination by mines and shells, etc. In addition, the end of the sowing campaign of winter crops has demonstrated a significant reduction in the sown area – 3.8 million hectares of winter crops have been sown in 2022, which is 43% lower than in 2021.
UCAB stressed that the reason for this trend is the limited ability to export crops, expensive logistics and, as a consequence, a significant difference in prices of crops by region.
“The regions that are geographically close to sea ports and borders with the EU, have a higher price for agricultural products compared to the regions in the north and east of our country. For example, the price of corn with VAT in Transcarpathian region is 6800 UAH per ton, and in Sumy region – 4900 UAH. However, even in western regions the price is unprofitable. Therefore, the proximity of the border with the EU and working ports determines the ability of the relevant areas to continue grain production, “- the association specified in the message.
In turn, next 2023 will see an increase in the area under oilseeds due to their higher margins compared to grain crops and a significant increase in the logistics of grain this year.
“The price of oil-bearing crops is 2 times higher than the price of grain crops on the world market. According to preliminary estimates, the sown areas under grain crops in 2023 will be 8.7 million hectares, which is 22% less than in 2022 and 45% less than in 2021. The projected area sown with oilseeds is 9.7 million hectares, which is 32% more than in 2022 and 9% more than in 2021. For the first time, the area under oilseeds will be larger than that under grains,” the UCAB said in a statement.
In addition, next year’s average yield will decrease by 10-30%, depending on the region and crop, compared to the average yield of previous years due to a 50-60% reduction in fertilizer application, significant amounts of corn left in the fields of the 2022 crop, the lack of agribusiness funding and the need for significant resource savings.
UCAB stressed that taking into account the given gross production volumes and domestic needs of Ukraine the export potential of grains and oilseeds in 2023/24 marketing year (MY, July-June) will be about 35 million tons, or 3 million tons per month. For comparison, in 2021/22 MY export potential was at the level of 85 million tons of grains and oilseeds, or 7 million tons per month.
As reported, Ukraine in 2021 harvested a record crop of cereals, legumes and oilseeds at 106 million tons: 84 million tons of cereals and legumes, and 22.6 million tons of oilseeds.
A total of 32.4 million tons of wheat, 40 million tons of corn, 10 million tons of barley, 581.5 thousand tons of peas, 191 thousand tons of millet and 110 tons of buckwheat were harvested last year. Sunflower harvest amounted to 16.3 million tons, soybeans – 3.4 million tons and rapeseed – 2.9 million tons.
The group of companies, A.G.R. Group, of businessman Misak Khidiryan, with the start of a full-scale Russian invasion, reoriented logistics routes from Ukrainian seaports to the EU market through road and rail transport, as well as the river ports of Reni and Izmail.
As a representative of the grain trading department told Interfax-Ukraine, the company would continue to export part of its agricultural products through land border crossings with the EU and along the Danube River even after the occupied territories are liberated from Russian troops and Ukraine resumes full-fledged trade in the Black Sea.
According to him, after the start of the war, A.G.R. Group began searching for elevator capacities in the west of Ukraine and transporting crop stocks there from the central regions of the country. Later, A.G.R. Group established road and rail logistics channels for the selling of agricultural products in the EU, and also agreed to cooperate with a European trading company with a fairly strong infrastructure throughout Europe and begun to supply agricultural products to it.
“In addition, we agreed that we would work together to load their volumes and gave guarantees that after our victory and the liberation of the occupied territories, we will maintain our partnerships, even when ports open and maritime logistics again become a priority. Perhaps even consider with the board purchase of new clusters in western Ukraine for a more convenient partnership,” the representative of the holding told the agency.
According to him, at the moment, deep-water seaports are not available to the holding for export, so it uses road and rail transport, as well as the ports of Reni and Izmail. However, such logistics is much more expensive than maritime exports, and is also associated with a number of difficulties, such as the inability to leave Ukraine for drivers – its citizens, or long queues of ships in ports.
However, A.G.R. Group, in addition to the European direction, stepped up its activities in several countries of the Middle East – in Egypt and Turkey, where the company opened its representative offices.
“Our offices are operating there and domestic sales are running at maximum, as we need additional margin due to high logistics costs. We must clearly understand that the logistics leverage has increased, freight prices have increased, energy and fuel prices have risen, as a result of which we spend about $200 per tonne of exports, $200 on our product is a lot of money, we used to spend $45-50 per tonne,” the source said.
In the agricultural holding A.G.R. Group includes 20 companies. The main direction of its activity is the trade in agricultural products, the cultivation and storage of grain crops, as well as animal husbandry.
A.G.R. Group cultivates land in Poltava, Kyiv, Chernihiv and Sumy regions. All grown products are sold on foreign markets.
The holding’s president and head of its supervisory board is businessman Misak Khidiryan.
