The Ukrainian Grain Association (UGA) increased the forecast for the harvest of grain and oilseeds in Ukraine in 2022 by 4.4% compared to the May forecast – up to 69.4 million tons from 66.5 million tons, according to the UGA website on Wednesday.
At the same time, the assessment by the association of sown areas under these crops increased by 1.6% compared to forecasts in May – up to 19.1 million hectares from 18.8 million hectares.
“Ukrainian farmers, despite the difficult wartime conditions, minefields and hostilities due to the aggressive war of the Russian Federation, continue to courageously fight for the harvest so that Ukraine has enough grain and can export part of the crop to the world market. This year, Ukraine can get 69 .4 million tons of grain and oilseeds from an area of about 19.1 million hectares,” the UGA said in a statement.
At the same time, the export of grain and oilseeds from Ukraine in the 2022/2023 marketing year (MY, July-June) can reach 31.5 million tons, subject to a significant increase in the throughput capacity of border crossings on the western borders of Ukraine. Given the current throughput capacity, Ukraine can count on the export of about 25-30 million tons of crops in the 2022/2023 marketing year that has begun.
According to the results of 2021/2022 MY, it is expected that the transitional crop balances in the country will amount to about 25.9 million tons (+0.9 million tons compared to UGA forecasts in May). In 2022/2023 MY, this figure may increase to 36.6-48 million tons due to the inability to export agricultural products at the usual pace for Ukraine. In May, the association predicted transitional balances for 2022/2023 MY at the level of 31-43 million tons.
According to UGA forecasts, in 2022, a wheat harvest is expected at the level of 20.8 million tons (+8.3% compared to the organization’s May forecast); 27.3 million tons of corn (+4.6%); 6.6 million tons of barley (forecast kept); 9 million tons of sunflower (forecast kept); 2.2 million tons of soybeans (+4.7%); 1.5 million tons of rapeseed (+13.3%).
UGA also predicts the export of wheat in 2022/2023 MY at the level of 10 million tons, corn – 10 million tons, barley – 2 million tons, sunflower – 6 million tons, soybeans – 1.8 million tons, rapeseed – 1.45 million tons.
“In general, the export of grains and oilseeds in 2022/2023 MY can be expected at the indicated level, if Ukraine, under the blockade of the Black Sea ports, can double the throughput of other logistics directions, including railway crossings at the borders with the EU countries,” the association explained in message.
At the same time, the unblocking of the Black Sea ports will greatly simplify the logistics and cost of transporting grain for export, and producers will be able to make a big profit for the grown crop in accordance with the high prices for agricultural crops that are currently prevailing on the world market. “Unblocking Ukrainian ports and ensuring the safety of navigation in the Black Sea is the only way to quickly and effectively resume Ukrainian grain exports to countries in dire need. The lack and high cost of food can cause, according to UN estimates, famine in many poor countries of the world, mass protests and riots, and as a result mass migration of people from Africa and the Middle East to the EU,” the UGA summed up in the message.
As reported with reference to the data of the State Statistics Service, in 2021 Ukraine harvested a record harvest of grain and leguminous crops in the amount of 85.7 million tons, which is 32% more than in 2020. In total, 32.07 million tons of wheat (+28.9%), 41.87 million tons of corn (+38.2%) and 9.42 million tons of barley (+23.3%) were harvested.
Ukraine in 2021 also harvested 16.38 million tons of sunflower (+25% compared to 2020), 10.8 million tons of sugar beet (+18.1%), 3.5 million tons of soybeans (+24.4%), 2.92 million tons of rapeseed and 42 thousand tons of oilseed flax (an increase of 3.7 times).
The Ukrainian Grain Association (UGA) is an association of producers, processors and large grain exporters who annually export about 90% of Ukrainian grain products.
The World Bank may allocate $200 million to Ukrzaliznytsia (UZ) for the development of grain export capacity, Alexander Kamyshin, the head of the board of UZ, announced such a preliminary agreement. “We have tentatively agreed with the World Bank on $200 million in funding for our projects to develop grain export capacity,” he wrote in a telegram on Tuesday following the results of the Ukraine Recovery Conference in Lugano (Switzerland).
Earlier, on the sidelines of the conference, Kamyshin clarified to the Interfax-Ukraine agency that Ukrzaliznytsia failed to increase grain exports in June due to existing logistical restrictions.
As reported, Ukraine exported 1.41 million tons of grain crops in June 2022 compared to 1.2 million tons in May. At the same time, exports through the ports before the war of grain crops amounted to 4-5 million tons.
The price of wheat in Ukraine on EXW terms (self-delivery) has reached its minimum values for the month, having decreased by 31.1% over the period from May 23 to June 27 – to UAH 4,500/ton from UAH 5,900/ton, according to an infographic on the website of the consulting agency “Ukragroconsult” on Monday.
Over the same period, the cost of EXW corn decreased by 17.4% – to 4750 UAH/ton from 5750 UAH/ton, and barley – by 29.7% – to 4500 UAH/ton from 6400 UAH/ton.
At the same time, the main drop in prices for grain within the country occurred over the past week: for the period June 20-27, wheat fell in price by 24.4% (from 5600 UAH/ton on June 20), corn – by 15.1% (from 5600 UAH/ton ), barley – by 30.7% (from 6500 UAH / ton).
As reported with reference to the data of the electronic grain exchange GrainTrade, the purchase prices for wheat in Ukraine fell to 5500-6500 UAH / ton with delivery to the mill against the backdrop of blocking the country’s seaports by Russian warships. Additionally, the price reduction was influenced by the introduction of export licensing in March, the abolition of which in July 2022 was announced the day before by First Deputy Minister of Agrarian Policy Taras Vysotsky.
According to the exchange, in anticipation of the harvest of the new crop, agricultural producers are trying to free up granaries, so they are activating wheat sales, thereby increasing pressure on prices for it. Thus, the abolition of licenses will revive exports and stabilize wheat prices.
A manufacturer of grain processing and grain cleaning equipment, Olis LLC (Odesa), has built and put into operation a grain workshop of its production Optimatic K-15 in Poltava region.
“Good news not only for Olis as a manufacturer and supplier of grain processing equipment, but also for the region, where, thanks to a quality grain workshop, there will be no shortage of cereals. After all, local food production is very important today,” the machine-building company wrote on Facebook on Wednesday.
According to it, Optimatik K-15 is an aggregate universal grain mill designed for production of wheat, barley, pearl barley, peas, corn and millet.
A unit with a rated power of 30 kW/h can process 400-600 kg of millet, pearl barley or corn, or 700-800 kg of wheat, barley or peas per hour.
As reported, Olis resumed the work of its plant in Odesa region at the end of March and resumed the manufacture of equipment under new and previously concluded contracts.
Olis produces about 200 items of equipment for the grain processing industry. The enterprise is able to produce grain cleaning complexes, mills and grain workshops from the stage of technology development to commissioning of facilities.
The company’s products are exported to more than 25 countries around the world.
Whole Europe must unite its efforts and act boldly in order to solve the problem of safe transportation and shipment or Ukrainian grain, Prime Minister of Italy Mario Draghi has said.
“We must do everything possible to not let the situation become dramatic… To avoid… a serious crisis, we must ensure safe transportation of grain. This must not cause a global disaster. For this we must focus on how to organize grain transportation through the Black Sea. Russia, unfortunately, does not make advances. We must fight against this problem bravely and boldly, just like President Zelensky. And we, the Europeans, must act together,” Draghi said during a press conference following a meeting of the leaders of Ukraine, France, Germany, Italy, and Romania in Kyiv on Thursday.
He added that there is some time to solve this problem as “the harvest will be ready mainly in September.”
The United States intends to build granaries in Poland on the border with Ukraine to facilitate the export of Ukrainian grain to Europe by rail, US President Joe Biden said on Tuesday.
“We are going to build temporary granaries on the border with Ukraine – in Poland,” he said during a speech broadcast by the White House on Tuesday.
Biden noted that this plan, if implemented, would allow exporting grain from Ukraine to Europe, and from there to other parts of the world. He said that he is currently “working closely with European partners to release 20 million tons of wheat from Ukraine to world markets.”
The US President also acknowledged that the plan “will take time” to implement.
