Business news from Ukraine

Global grain harvest this year is expected to be higher than year earlier

Global grain production in 2023-2024 may be 1.3% higher than a year earlier and amount to 2.828 billion tons, taking into account the increase in production of corn, rice and wheat, FAO (the UN Food and Agriculture Organization) predicts.

According to its review, world grain reserves at the end of the current marketing year (MY) will amount to 894 million tons, which is 2.3% more than at the beginning of the year, indicating a ratio of world grain reserves to consumption of 31%.

The FAO also forecasts that the world grain trade in 2023/24 MY will increase by 1.7% compared to the previous season to 485 mln tonnes, mainly due to the increase in shipments of coarse grains, while the trade in wheat and rice is likely to decline.

In addition, the FAO revised its forecast for global wheat production in 2024 to 796 million tons, down from a month earlier, but still 1% higher than in 2023.

The forecast indicates that wheat production is expected to decline slightly in the European Union and the United Kingdom and Northern Ireland, where excessive humidity has led to a reduction in wheat crops. At the same time, localized drought is affecting the acreage in the southern and eastern parts of the European Union.

In the U.S., despite the reduction of plantings due to low prices, the total wheat production in the country will continue to grow in 2024 due to the expected increase in yields due to favorable weather conditions. In Canada, where spring wheat will be planted starting in May, experts expect a reduction in acreage due to lower profitability.

The conditions in Ukraine are assessed as unchanged from the previous month, as the war continues to put heavy pressure on the sector and production prospects.

In Russia, the wheat harvest in 2024 is forecast to be above average, although lower than last year.

In Asia, favorable weather conditions will boost grain production in India and Pakistan. A record wheat harvest is likely in 2024.

At the same time, a significant shortage of precipitation and hot temperatures across North Africa will lead to extremely low production in 2024 after the already poor results of last year.


By end of May, Ukraine will be able to export entire harvest of 2023/24 MY to world markets

Ukraine will supply the entire crop of the 2023-2024 marketing year and the remnants of last year’s harvest to world markets by mid-to-late May, Deputy Minister of Community Development, Territories and Infrastructure Yuriy Vaskov said at the Forbes Ukraine Exporters Summit in Kyiv on Friday.

“It is my opinion that somewhere between mid-May and the end of May, at most, the entire harvest of the current year and the remnants of the previous year will be exported,” he said, adding that prices of terminals for the export of Ukrainian agricultural products in Ukrainian ports will not decrease.

Mr. Vaskov also reminded that the state has several mechanisms to guarantee export transportation through the Black Sea. The first of them is compensation from the state budget in case of a possible attack on civilian vessels.

The second mechanism is the Unity program from Marsh McLennan and the Ukrainian government with the involvement of English clubs, to which Ukraine has also contributed, so that ships transporting agricultural products receive insurance with a premium of 1% or less.

The Deputy Minister also said that a meeting was held in London a few weeks ago. Ukraine has already received confirmation that ships carrying other cargoes, such as iron ore, metal products, and others, will be insured on similar terms.

“Ukraine has also raised the issue of container shipping insurance and received London’s consent to provide attractive conditions for shipowners,” Vaskov summarized.

As reported, thanks to the UNITY insurance instrument, insurance rates in the commercial market of transportation by Ukrainian sea have been halved, while the rate for agricultural products insurance is now 0.75%.

The UNITY insurance instrument is available to all international brokers who can be contacted by ship owners and Ukrainian exporters.

The UNITY program, which aims to provide affordable insurance against military risks for the supply of grain and other important food products around the world, was launched in November 2023. UNITY offers hull hull insurance and separate protection and indemnity (P&I) against war risks at significantly reduced premiums compared to standard market prices.


Ukraine will be able to export 50 mln tons of grains and oilseeds to world markets in this harvest

Ukraine will be able to export 50 million tons of grains and oilseeds from the 2023 harvest, as well as about 10 million tons of vegetable oils and meals to global markets, said Mykola Gorbachev, president of the Ukrainian Grain Association.

“We planned to export about 5 million tons per month. However, in the first four months (the grain marketing year starts in July – IF-U) this did not happen. We were unable to increase shipments through the Danube ports, which accounted for 3.5-3.7 million tons per month. With the launch of the grain corridor, the ports of Greater Odesa have a lot of potential. It is possible to ship 3-4 million tons (of grains and oilseeds – IF-U) per month through the ports of Greater Odesa alone,” he said at the Business Breakfast with Forbes Ukraine on Wednesday.

In total, Ukraine will be able to export about 6 million tons of grain a month through the sea corridor and across its western borders, according to the UGA president’s estimates, which was already done in November.

“We will be able to work harder, increase (exports – IF-U) a little bit more, and I think it will be technically feasible to supply 50 million tons of grains and oilseeds to foreign markets,” Gorbachev said.

He added that Ukraine will produce another 10 million tons of agro-processed products, including vegetable oils and meals.

“We will sell most of the grain and manufactured products. For us, this is more than 50% of the country’s foreign exchange earnings, which stabilizes the hryvnia. I think the state has little choice: either the harvest will rot or it is better to sell it. Of course, it’s better to sell,” said the UGA president and expressed confidence that traders will cope with this task if the military ensures the safety of shipping at the current level.

Gorbachev emphasized that in 2023 Ukraine managed to maintain its status as the world’s breadbasket, as farmers grew 81 million tons of grains and oilseeds against domestic consumption of 23-24 million tons. He emphasized that Ukraine produces three to four times more crops and processed products than it consumes, so the agricultural sector is clearly export-oriented.

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Ukraine has sown more than 2.9 mln hectares of winter crops for 2024 harvest

Ukraine continues sowing winter crops, which have already been planted on 2.992 million hectares compared to 2.179 million hectares a week earlier, the Ministry of Agrarian Policy and Food reported.

According to the report, winter rapeseed was sown on 1.087 million hectares (1.038 million hectares a week earlier), grain crops – 1.906 million hectares (1.141 million hectares), of which 1.743 million hectares (1.024 million hectares) are under wheat, 109 thousand hectares (74 thousand hectares) under barley, and 53.6 thousand hectares (42 thousand hectares) under rye.

According to the report, over the past week, farmers sowed 764.7 thou hectares (556 thou hectares) of winter crops.

Most of the winter crops were sown in Sumy region – 87%.

Winter rapeseed sowing is nearing completion in all regions.

As reported with reference to a survey conducted by the Ministry of Agrarian Policy, the vast majority of farmers do not plan to significantly change the area under winter crops in 2024 compared to last season.

Minister of Agrarian Policy of Ukraine estimates this season’s harvest as record one

The Ministry of Agrarian Policy and Food estimates the harvest of the 2023 season at 79 million tons, which is at least 7 million tons more than last season, Minister of Agrarian Policy Mykola Solsky said on the air of the United News marathon.

“In May, at the beginning of the sowing season, we thought we would have about 63-64 million tons. Then we raised the forecast to 67-68 million, then more – 70 million. Last year we had a result of 7 million tons, then 75 million tons. In the last two weeks, we have been talking about the harvest, which will probably be around 79 million, which is at least 7 million more than last year,” he said.

Mr. Solsky reminded that farmers are no longer concerned about yields and gross output, but rather about the price at which they can sell their crops.

“It is very important that we have the opportunity to sell at a higher price. It is important how much we can export. After all, we need to be able to export 5 million tons of grain every month,” the minister explained, adding that logistics are very expensive and grain is not cheap.

Mr. Solsky emphasized that the demand for logistics is now significantly higher than the supply, and pointed out the importance of balancing these indicators.

“We are trying to do our best to bring this balance closer to what is needed (by the farmer – IF-U), so that the price (of grain – IF-U) will rise,” the minister emphasized.

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World grain harvest this year may be at level of record 2021 – forecast

The global grain harvest in 2023 could be at the level of the record-breaking 2021, FAO (the UN Food and Agriculture Organization) predicts.

According to its review, the estimate of the global harvest for this year in September compared to July (the review was not released in August) was reduced by 4 million tons. Despite this, the global harvest may be 0.9% higher than last year’s and amount to 2 billion 815 million tons, which corresponds to the record figure for 2021.

Thus, the forecast of wheat harvest was reduced by 2.2 million tons to 781.1 million tons. “It is expected that global wheat production will decrease by 2.6% compared to last year, but, nevertheless, it will be the second highest figure in the history of observations,” the review says. The largest decline was in production in Canada and the EU due to dry weather. The wheat harvest forecast in China has been lowered due to heavy rains in a number of key grain-producing regions. This decrease was partially offset by an increase in the forecast in the United States, India and Ukraine, “as indicated by the latest data provided by the governments of these countries on a more abundant harvest than previously expected.”

The forecast of feed grain harvest was lowered by 1.3 million tons to 1 billion 511 million tons, which is mainly due to a decrease in barley and oat harvests. However, this figure is 2.7% higher than last year. Thus, the estimate of barley harvest has been reduced by 2.9 million tons to 143.8 million tons (5.6% lower than last year). The oat harvest will be the lowest in 11 years – 23.1 million tons.

At the same time, corn production may reach a record high of 1 billion 215 million tons. The forecast has been raised by 3.6 million tons, mainly due to “richer than expected harvests in Brazil and Ukraine.” This will more than compensate for the lower forecast for corn harvest in the US and EU.

The FAO estimates this year’s rice harvest at 523.2 million tons. This is 500 thousand tons lower than the July forecast, but 1.1% higher than the harvest last season.