Global grain production in the 2024-2025 marketing year (MY, July-June) will increase by 1% compared to the previous season and amount to 2312 million tons due to higher yields of wheat, barley and sorghum, which will compensate for the decline in corn production, the International Grains Council (IGC) said in a report on Thursday.
At the same time, grain consumption will increase, and end-of-season stocks are expected to fall to a ten-year low, including in major exporters.
According to the forecasts, the volume of contracted grain trade in 2024/25 MY will increase by 4% and reach 416 mln tonnes. At the same time, the demand for global consumption will amount to 2320 mln tonnes, and carry-over stocks will be 580 mln tonnes.
In 2024/25, the global soybean production is expected to reach the maximum of 414 mln tonnes. The main demand for soybean products in the upcoming season will come from the world’s leading buyers – the USA, Brazil and Argentina. At the same time, carry-over stocks continue to accumulate. The trade in soybeans in October-September will intensify and increase by 2%, reaching a new high, according to IGC.
Speaking about other oilseeds, IGC drew attention to the expected significant global production of rapeseed/canola against the background of almost unchanged sunflower production, which will be similar to last year’s volume.
According to IGC forecasts, global rice production in 2024/25 MY will reach a record peak and grow by 2%, driven by increased production in major exporting countries, particularly in South Asia. Rice consumption will increase due to population growth, while stocks may increase due to accumulation in India. Trade is likely to decline in January-December 2025 amid rising supplies to Africa and lower demand from Asian importers, particularly Indonesia.
The IGC forecasts a 5% decline in demand for lentils and beans in January-December 2024 to 21.2 mln tons.
The International Grains Council also drew attention to the temporary abolition of tariffs on imports of raw rice, brown and white rice to Brazil until the end of 2024, which aims to mitigate the effects of recent rains and floods in southern Brazil. In addition, IMG members noted recent changes in India’s pulses import policy.
World grain production in 2023-2024 will be 1.2% higher than a year earlier, amounting to 2.846 billion tons, taking into account the increase in barley, rice and sorghum production, FAO (the UN Food and Agriculture Organization) predicts.
According to its review, global production of corn and wheat will decline, while barley, rice and sorghum production will increase. In addition, the recent unfavorable weather conditions in the Black Sea region are likely to lead to a decline in global wheat production, but this possibility is not yet reflected in the forecast.
At the same time, global grain stocks are likely to increase by 1.5% compared to the initial level and reach a record high of 897 million tons. Corn, barley, sorghum, and rice stocks are expected to increase, while wheat stocks may decline. The global stocks-to-use ratio is likely to remain at 30.9%.
In addition, the FAO revised its forecast for global cereal consumption in 2024-2025 by 0.5% to a new record level of 2.851 billion tons, which it explained by an increase in food consumption, especially rice.
Global grain trade will decline by 1.3% compared to the previous year to 481 million tons, due to lower prospects for corn trade. International trade in rice is expected to grow strongly, FAO predicts.
As of May 24, Ukraine exported 45.402 mln tonnes of grains and pulses since the beginning of 2023/24 marketing year (MY, September 2023 – August 2024), of which 3.997 mln tonnes were shipped in May, the press service of the Ministry of Agrarian Policy of Ukraine reported, citing the State Customs Service.
According to the report, as of the same date last year, the total shipments amounted to 44.593 mln tons, including 2.707 mln tons in May.
In terms of crops, since the beginning of the current season, 16.949 million tons of wheat have been exported (in May, the figure was 1.163 million tons), 2.363 million tons of barley (161 thousand tons), 1.4 thousand tons of rye (0.2 thousand tons), 25.563 million tons of corn (2.662 million tons).
Total exports of Ukrainian flour as of May 24 are significantly lower than last year’s figure (138.9 thousand tons) and are estimated at 90.9 thousand tons (4.3 thousand tons in May), including 85.9 thousand tons of wheat (3.9 thousand tons).
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Open4business is a media partner
One of the largest grain market operators in Ukraine, Nibulon JV LLC (Mykolaiv), transshipped 434 thousand tons of corn and wheat in April and returned to pre-war levels, the grain trader’s press service reported on Facebook.
“Despite the devastating damage and blockade of the Mykolaiv port, Nibulon demonstrates a recovery in exports in 2022-2024 and regains market share. This becomes possible due to the development of alternative channels through the Danube port and the effective use of the capabilities of the Black Sea ports,” the agricultural holding said.
According to the report, Nibulon exported 2.4 million tons of agricultural products in the first nine months of the 2023-2024 marketing year (MY), despite the blockade of Ukrainian Black Sea ports. Its current share through the Danube ports in the first quarter of 2024 was in the range of 20-30%. The agricultural holding forecasts annual export volumes in 2023/24 MY at 3.2-3.4 mln tons.
“So far, the work of Nibulon’s logistics infrastructure is divided between two channels. After the work of the Black Sea ports resumed thanks to the Armed Forces of Ukraine, a significant part of the grain volumes we exported through the ‘river’ was reoriented to the ‘big water’. At the same time, the Danube continues to play a key role for our exports: the share of this channel in the sales structure is 70%,” said Volodymyr Slavinsky, Nibulon’s trading director, as quoted by the press service.
The grain trader considers the achieved results to be its undisputed victory, as it works to connect Ukrainian farmers with international markets and to maintain global food security.
JV Nibulon LLC was established in 1991. Prior to the Russian military invasion, the grain trader had 27 transshipment terminals and crop reception complexes, capacity for simultaneous storage of 2.25 million tons of agricultural products, a fleet of 83 vessels (including 23 tugs), and owned the Mykolaiv Shipyard.
“Before the war, Nibulon cultivated 82 thousand hectares of land in 12 regions of Ukraine and exported agricultural products to more than 70 countries. In 2021, the grain trader exported the highest ever 5.64 million tons of agricultural products, reaching record volumes of supplies to foreign markets in August – 0.7 million tons, in the fourth quarter – 1.88 million tons, and in the second half of the year – 3.71 million tons.
Nibulon’s losses due to Russia’s full-scale military invasion in 2022 exceeded $416 million.
Currently, the grain trader is operating at 32% of capacity, has created a special unit to clear agricultural land of mines, and was forced to move its headquarters from Mykolaiv to Kyiv.
The flow of grain ships through the ports of Odessa Region is bringing long-awaited support to Ukraine’s economy. However, analysts warn that this may be a temporary phenomenon.
“In early March in Odessa, a 700-foot Liberian-flagged vessel slowly sailed out of the port, passing rows of yellow cranes and plunging into the calm waters of the Black Sea. Its hull was almost completely submerged as the ship was loaded with corn bound for Bangladesh. Meanwhile, other ships laden with grain have already left port, bypassing those that were just arriving,” the New York Times reported.
What seemed impossible last summer, when the Russian naval blockade paralyzed all commercial activity, is now a reality. The port was back on track thanks to a military campaign that drove Russian warships out of Ukrainian waters and provided a trade route for supplies to foreign markets.
Ukrainian grain and oilseed exports across the sea, which are vital to the Ukrainian economy, have almost returned to prewar levels, according to data provided to the New York Times. Over the past six months, Ukraine exported 27.6 million tons of grain and oilseeds across the Black Sea, only 0.2 million tons less than the average volume for the same period from 2018 to 2021 before Russia’s invasion in February 2022.
In the first quarter of this year, Black Sea exports even exceeded pre-war figures, according to Ukrainian data.
Grain and oilseed export estimates from Dragon Capital, a Kiev-based investment firm, and data from Lloyd’s List Intelligence, a shipping analytics firm, confirm this trend.
Sal Gilberti, head of Teucrium Trading, a U.S. company that trades agricultural commodities on the New York Stock Exchange, said claims by Ukrainian officials that grain exports across the sea are close to prewar levels are “accurate.”
Ukraine still faces challenges that could prevent grain exports from stabilizing at previous levels, including continued Russian attacks on port infrastructure and a reduced harvest this year. The U.S. Department of Agriculture predicts a decline in grain exports in the near future.
However, analysts say the overall environment is improving and freight companies are willing to transport Ukrainian grain despite the war. “The data shows there is no shortage of shipowners willing to take the risk and go for it,” said Greg Miller, senior maritime journalist at Lloyd’s List.
Maintaining high levels of grain exports is a strategic necessity for Ukraine. Grain and oilseeds accounted for a third of Ukrainian exports last year, said Natalia Spygotska, senior analyst at Dragon Capital. It has become critical to sustaining Ukraine’s economy and ultimately its war effort.
Tariel Khajishvili, head of Novik LLC, a Ukrainian ship agent operating in Odessa, said: “It is obvious that without grain exports, the country’s economy will collapse.”
After the invasion, Russia seized control of the Black Sea, blocking trade for months, jeopardizing global food security. In July 2022, a deal brokered by the UN and Turkey allowed Ukraine to resume exports through an agreed corridor in the Black Sea.
But a year later, Russia pulled out of the agreement and threatened all commercial ships traveling to or from Ukraine, leading to a complete halt to maritime grain exports last August.
To resume exports, the Ukrainian army launched a campaign to drive the Russian navy out of part of the Black Sea, destroying many warships and attacking their headquarters in Russia-occupied Crimea. The successful operation allowed Ukraine to create a new trade corridor along the coast that allows ships to enter the territorial waters of NATO countries.
Dmytro Barinov, deputy head of the Ukrainian Sea Ports Administration, recalls how nervous they were when the first grain ship passed through the corridor in mid-September: “We prayed that everything would go well.
Eventually, the ship successfully sailed into the open sea, and soon the “familiar pleasant sounds” of the ship’s sirens were again heard in Odessa.
The number of grain ships arriving at the three ports of the Odessa region – Odessa, Pivdennyi and Chernomorsk – increased to 231 in March from just 5 in September, according to Lloyd’s List.
Ukraine’s ship insurance arrangements with global insurers also contributed to the increase. Mr. Gilberti of Teucrium Trading added that Moscow is also interested in keeping the fighting out of the Black Sea, as it is also used to export Russian goods.
Today, Ukraine can only use ports in the Odessa region for grain exports, as other seaports are either too close to Russian positions or occupied by Russian troops. Despite this, with 4.1 million tons of grain and oilseeds shipped monthly, these three ports are close to pre-war export volumes.
The opening of the Odessa ports brought welcome financial relief to Ukraine. Having lost key economic assets during the war, such as steel mills in the east seized or destroyed by Russia, Ukraine is now more dependent on grain exports to support the economy. Dragon Capital predicted in the fall that a return to full operation of Odessa ports could add several percentage points to Ukraine’s GDP growth this year, which was forecast at 4 percent.
However, analysts warn that the initial success of Ukraine’s new trade route may be short-lived.
Russia continues to strike port infrastructure in Odessa, and with Ukraine’s air defenses in short supply, more missiles are reaching their target. In mid-April, Russia successfully struck two terminals in Pivdenne, destroying several containers.
Dragon Capital’s Ms. Spygotska also noted that high volumes of recent grain exports partly reflect shipments delayed by the Russian blockade, which could make it difficult to achieve those volumes in the future, especially with grain production projected to decline.
“Producers and exporters are now well positioned to export all available crops,” she said. “But it all depends on the harvest.”
