Business news from Ukraine

Business news from Ukraine

UGA lowered estimate of 2024 harvest to 75 mln tons

The Ukrainian Grain Association (UGA) has lowered its estimate of the potential harvest in 2024 by 1.5 million tons compared to the previous forecast – to 74.6 million tons of grains and oilseeds, the association’s press service reports.

According to the report, the current forecast is based on the average weather conditions over the past five years, so the improvement or deterioration of these conditions in spring and summer may make adjustments.

“The potential decline in the harvest in the new season is caused by both a reduction in sown areas (mainly under grain crops due to unfavorable price conditions on the world market and relatively expensive export logistics) and a somewhat dry period in May this year in a number of regions in the east and south of the country,” the UGA explained and added that under such conditions, exports in the 2024-2025 marketing year will amount to 43.5 million tons.

According to the forecast of the UGA, in the ending season, exports of grains and oilseeds may reach 53.2 million tons of grains and oilseeds.

The UGA forecasts the wheat harvest in 2024 at 19.1 million tons, which is 900 thousand tons less than the previous estimate (22 million tons in 2023). Potential wheat exports in 2024/2025 MY may amount to about 13 mln tonnes, taking into account that at the beginning of the season the carry-over stocks will be about 2.4 mln tonnes.

According to the UGA, barley harvest in 2024 may reach 4.6 mln tonnes (5.8 mln tonnes in 2023), and potential exports in 2024/2025 MY can be expected at around 2 mln tonnes (this season barley exports are forecasted at 2.5 mln tonnes).

Expectations for the corn harvest in the new season are deteriorating due to a potential reduction in corn acreage and dry conditions in a number of regions. The UGA estimates the corn harvest forecast at 25.5 million tons, which is 800 thousand tons less than the previous estimate and 4.1 million tons less than last year’s 29.6 million tons. At the same time, potential exports may amount to about 20.5 mln tons (in the current season, exports are expected to reach 26 mln tons).

The UGA expects the sunflower harvest in 2024 to reach 13.7 mln tons (in 2023 – 14.2 mln tons). Potential exports could reach up to 250 thsd tonnes (0.4 mln tonnes in the current season), while sunflower processing for vegetable oil could reach almost 13.6 mln tonnes. In the current season, processing will reach 13.5 mln tons.

In 2024, rapeseed harvest can be expected at 4.3 mln tonnes (in 2023 – 4.5 mln tonnes), while exports in 2024/2025 MY may reach 3.4 mln tonnes (in the current season – 3.7 mln tonnes).

As for soybeans, this is the only crop under which farmers can increase the area due to its profitability this year. The soybean harvest is expected to reach 5.5 mln tons in 2024 (4.9 mln tons in 2023). Potential exports in 2024/2025 MY may reach 4 mln tons (in the current season it is expected to reach 3.3 mln tons).

As reported, the UGA estimated the harvest in 2023 at 82.8 mln tonnes of grains and oilseeds.

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Agrarians sowed 96.4% of spring crops for harvest of 2024

As of May 23, Ukraine sowed 5.4 million hectares with grains and legumes, which is 96.4% of the forecasted spring crops for 2024, the press service of the Ministry of Agrarian Policy and Food reported on Friday.

According to the report, 252.5 thou hectares were planted with wheat (249 thou hectares a week earlier), which is 102.6% of the plan, 782.2 thou hectares with barley (781.6 thou hectares) or 95.6%, 162.5 thou hectares with peas (162.1 thou hectares) or 101.6%, 163.7 thou hectares with oats (162.7 thou hectares) or 100.7%. hectares) or 100.7%, millet – 60 thou hectares (43.1 thou hectares) or 70%, buckwheat – 85.5 thou hectares (48.1 thou hectares) or 68%, corn – 3.809 mln ha (3.57 mln ha) or 97% of the plan, other grains and legumes – 84.4 thou hectares or 91% of the plan.

Last week, the farmers sowed 311.7 thou hectares of spring crops. A week earlier, this figure was 784.7 thou hectares, and 912.9 thou hectares the week before.

In addition, sunflower was sown on 4.958 mln ha, or 94% of the plan (a week earlier the figure was 4.605 mln ha), soybeans – on 1.83 mln ha, or 92% (1640.9 mln ha), sugar beet – on 250.1 thou ha.

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Ukraine will be able to harvest more than 4 mln tons of rapeseed – forecast

Ukraine will be able to harvest more than 4 mln tonnes of rapeseed in the season-2024, UkrAgroConsult analytical agency forecasts.

“The State Statistics Service released the official data on the rapeseed harvest in 2023 – 4.2 mln tonnes (+26% compared to 2022/2023 MY), but the export and domestic processing rates prove that the official statistics need to be reassessed,” the analysts said.

They reminded that the export of rapeseed and processed products continues to be at the record pace even in the last months of the season. During the 10 months of the season, the country exported 3586.2 thsd tonnes of rapeseed (+5% compared to 2022/23 MY), 134.1 thsd tonnes in April; 406.1 thsd tonnes of rapeseed oil; 351.9 thsd tonnes of rapeseed meal.

Experts believe that the 2024 rapeseed harvest can also be forecasted on the basis of the revised estimates, according to which it may reach more than 4 mln tonnes.

“Weather remains the key factor in the yield formation. The impact of the cold wave and night frosts on the soil in early May is yet to be assessed, so in the future, the forecast of rapeseed harvest may be reduced,” UkrAgroConsult said.

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Agrarians sowed 3.4 mln ha of spring grains and pulses for harvest of 2024

As of May 2, Ukraine planted 3.407 million hectares of spring grains and pulses, up 1.5 times year-on-year, the press service of the Ministry of Agrarian Policy and Food reported on Friday.

According to the report, 240.7 thousand hectares were planted with wheat (223.3 thousand hectares a week earlier), 775.7 thousand hectares with barley (761.5 thousand hectares), 161.1 thousand hectares with peas (159.2 thousand hectares), 159.9 thousand hectares with oats (146.6 thousand hectares), and 16.7 thousand hectares with millet.

Over the past week, farmers sowed 861 thsd ha of spring crops. A week earlier, the figure was 492.9 thou hectares, and 792.6 thou hectares the week before. The leaders are farmers in Sumy region, where 97.4 thou hectares were sown during the week.

According to the Ministry of Agrarian Policy, Kyiv region is the leader in terms of sowing rates, having planted 31.3 thou hectares of wheat, 43.1 thou hectares of barley, 5.8 thou hectares of peas and 6 thou hectares of oats. Dnipropetrovs’k region – 28 thou hectares of wheat, 50 thou hectares of barley, 14.17 thou hectares of peas, 1 thou hectares of oats; Ternopil region – 18.9 thou hectares of wheat, 63.6 thou hectares of barley, 3.6 thou hectares of peas and 5.1 thou hectares of oats. hectares of oats; Sumy – 18.2 thousand hectares of wheat, 17.9 thousand hectares of barley, 5.6 thousand hectares of peas and 9.8 thousand hectares of oats; Zhytomyr – 16.5 thousand hectares of wheat, 19.3 thousand hectares of barley, 3 thousand hectares of peas and 26 thousand hectares of oats. hectares of oats; Khmelnytsky – 14.8 thou hectares of wheat, 59.1 thou hectares of barley, 2.6 thou hectares of peas and 2.5 thou hectares of oats; Vinnytsia – 11.5 thou hectares of wheat, 55 thou hectares of barley, 6 thou hectares of peas and 1.1 thou hectares of oats.

In addition, sunflower was planted on 2,967.5 thou hectares, soybeans – 566.7 thou hectares, sugar beets – 248.4 thou hectares.

According to the April forecast of the Ministry of Agrarian Policy, in 2024, the gross production of grains and oilseeds in the country is expected to reach 74 mln tons, including about 52.4 mln tons of grains and 21.7 mln tons of oilseeds.

In 2024, farmers will be able to harvest 19.2 million tons of wheat (22.2 million tons in 2023), 4.9 million tons of barley (5.7 million tons), 26.7 million tons of corn (30.5 million tons), 5.2 million tons of soybeans (4.7 million tons), 12.4 million tons of sunflower (12.9 million tons), and 4.1 million tons of rapeseed (4.7 million tons).

In 2024, the planted areas of grains and pulses are forecasted at 10.6 mln ha, which is 395 thou ha lower than in 2023.

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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.

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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.

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