The Ministry of Agrarian Policy and Food of Ukraine has updated its forecast for gross production of grain and oilseeds. This year Ukrainian agrarians can harvest about 56.4 million tons of grains, as well as 20.3 million tons of oilseeds, the ministry’s press service reported.
“At the beginning of spring 2023, the total gross harvest for the current year was projected at 63.5 million tons, which was 13% less in relation to the indicator of 2022. In June, after harvest began, the forecast was raised to 68 million tons, which was 7% less than the 2022 figure. Now, thanks to favorable weather conditions, there is every reason for another change in the forecast in a positive direction to 76.7 million tons, which is 5% more than the figure of 2022,” – noted on the website of the Ministry.
According to the report, despite the fact that the total area of sown spring and winter cereals this year was less by 980 thousand hectares than last year and amounted to 10,895 thousand hectares, weather conditions contributed to almost record yields of grain crops (up to 51.8 c/ha), which allows to significantly increase the volume of crop production.
According to preliminary estimates of the Ministry of Agrarian Policy, in 2023 agrarians will be able to harvest grain in the following volumes: wheat – 20.9 million tons, barley – 5.8 million tons and corn – 28.1 million tons.
Gross production of oilseeds, according to the Ministry’s forecasts, will reach 20.3 million tons, in particular, sunflower – 12 million tons, rapeseed – 4 million tons, soybeans – 4.2 million tons.
Agrarians will harvest 13.7 million tons of sugar beet this year.
Ukraine has already harvested 12.5 million tons of wheat with record yields, but due to weather conditions 60% of the crop will be sold as fodder, which is twice as much as last year’s figure, according to the analytical cooperative “Pusk”, established within the framework of the All-Ukrainian Agrarian Rada (VAR).
“The key problem of the new harvest was its low quality: due to weather conditions, the grain has a low protein content. Most exporting countries also have problems with the quality of grain,” analysts said.
According to their information, the volume of feed grain in the season-2023 may amount to 60% of the new harvest. In previous years, this figure was at the level of 30%, and the remaining 70% was food grain.
Ukraine will get no more than 40% of high-protein wheat in 2023, which will affect prices.
“The spread between fodder and high-protein wheat is already $15-18/ton, in the future it may exceed $20/ton,” experts noted.
The current season will be problematic with the supply of food grain worldwide, stated the WAR and added that a lot of feed grain will be produced by France, Germany and the Russian Federation, which are experiencing problems with grain quality.
“Those who have high-protein wheat are selling to Lithuania, to Germany, and at small ports the supply is low. If last season the markets were surplus, traders dictated prices, now we are moving to a deficit model. Farmers are not taking wheat to the ports, and prices will rise,” the analysts explained.
They reported that prices in Danube ports on the basis of CPT are $170-175/tonne, by the end of the week they are expected at $180/tonne, and by the end of August may exceed $200/tonne.
“World demand is just starting to grow, there will be news of quality problems in other regions as well,” predicted the CAP.
Agrarians of all regions of Ukraine have harvested early grain and leguminous crops on the area of 3782 thousand hectares, having threshed 16 million 574 thousand tons of grain at a yield of 44 c/ha, the press service of the Ministry of Agrarian Policy and Food reported.
According to the report, in terms of threshing rates the agrarians of Mykolaiv and Odessa regions are leading, which threshed 1772.2 thousand tons and 2.009 million tons of grain, respectively. In these regions grain has been threshed on 82% and 64% of areas.
To date, Ukraine has harvested barley on 939 thousand hectares, which is 66% of the planned, of which threshed 3.755 million tons; wheat from 2.698 million hectares (60%) harvested 12.513 million tons; peas from 125.3 thousand hectares (87%) received 306.4 thousand tons.
In addition, on the area of 1182.3 thousand hectares (86% of the planned area) harvested 3319.8 thousand tons of winter rape.
The Ministry of Agrarian Policy changes weekly information about the yield of harvested crops and indicates its growth. Thus, for barley this week it amounted to 40 c/ha, and a week earlier 39.4%, wheat from 44.4 c/ha reached 46.4 c/ha, winter rape from 26.8 c/ha – to 28.1 c/ha. Only peas slightly “gave up positions” from 24.7 c/ha to 24.5 c/ha.
According to the report, agrarians of nine regions have completed pea harvesting. In Dnipropetrovsk region they have started harvesting buckwheat.
As reported, winter wheat sowing this season amounted to 4166 thousand hectares (-834 thousand hectares to the previous season), winter barley – 536 thousand hectares (-255 thousand hectares), rape – 1374 thousand hectares (+110 thousand hectares).
The Ukrainian Grain Association (UZA) has updated its estimate of the potential 2023 harvest, increasing it by 7.8 million tons to 76.8 million tons of grains and oilseeds, 3 million tons more than last year.
“The increase in this year’s crop forecast is due to favorable weather conditions and better-than-expected crop yields, although the area planted is 2.2 million hectares smaller than last year,” the association said in a statement on Thursday.
According to the updated forecast, exports from Ukraine in the new season 2023/2024 could potentially reach almost 48 million tons, while last season, which ended on June 30, according to UZA estimates, it reached 58 million tons worth about $20 billion.
It is specified that the 2023 wheat crop estimate has improved from 17.9 million tons to 20.2 million tons (2022 was 20.2 million tons and 2021 was a record 33 million tons). Potential wheat exports in MY 2023/2024 could be around 15 million tons, given the early season transitional residue of 4.3 million tons.
UZA also raised its 2023 barley crop forecast to 5.2 million tons from 4.4 million tons (10.1 million tons in 2021 and 5.8 million tons in 2022) and potential exports to 2.6 million tons.
Corn crop expectations for the new season have improved from 24.2 million tons to 26.9 million tons (2021 – 37.6 million tons, 2022 – 27.3 million tons), with potential exports of about 22 million tons, the report said.
According to it, the sunflower crop estimate for 2023 is raised from 12.7 to 13.9 million tons (2021 – 16.9 million tons, 2022 – 11.1 million tons), potential exports could be 1.1 million tons, and sunflower seed processing could be 12.5 million tons.
The UZA tentatively estimates the 2023 rapeseed harvest at 3.9 million tons and exports at 3.7 million tons, while the soybean harvest is expected to be larger – the estimate has increased from 4.4 to 4.8 million tons, and its potential 2023/2024 MY exports could reach 3.3 million tons.
UZA emphasizes that in general, grain and oilseed exports in the new 2023/2024 MY can be expected at the indicated level if Ukraine is able to export through its Black Sea ports and if logistics of alternative routes, including the Danube route, improve and become cheaper.
“Further impediments to grain exports from Ukraine will have a negative impact on the availability of grain on the world market and will lead to higher prices and, consequently, increased food inflation in the world. Moreover, in case of impossibility to export products, Ukrainian farmers may reorient their production and refuse to grow grain, which will further aggravate the crisis in the world food market in the medium term,” UZA said.
The Ukrainian Grain Association (UZA) is an association of grain producers, processors and major exporters of grain, which annually export about 90 percent of Ukrainian grain products.
Harvest of seeds of the main types of oilseeds in Ukraine in 2023/24 MY will grow to 19.5 million tons, which is 7.7% higher than in the previous season, predicted the association “Ukroliaprom”.
The industry association recalled that by exporting sunflower seeds from Ukraine sufficient to meet the needs of the EU and other countries in volumes, the country loses the market for sunflower oil and meal in these countries.
“The mass export of oilseeds from Ukraine to the world market has led to a sharp drop in prices, which has caused discontent among farmers in European countries. As a consequence, the mass export of sunflower seeds from Ukraine has led on the part of some EU countries to a ban on imports into their territory until mid-September 2023, and possibly until 2024”, – noted in “Ukroliaprom”.
The association expressed confidence that this would not have happened if the repeated requests of Ukroliaprom to limit sunflower seed exports, particularly to EU countries, by introducing additional fees and licensing had been taken into account.
Ukroliaprom expects soybean exports from Ukraine to exceed 3.0 million tons at the end of MY 2022/23, or more than triple against MY 2021/22.
“This may negatively affect domestic processing, which even under martial law remained not only stable, but also increased,” experts emphasized.
The industry association expects the highest production growth in MY 2023/24 for soybeans – by 12.2% to 4.107 million tons. This will happen thanks to a 20.5% increase in sown areas, which reached 1.84 million hectares, but the yield of the oilseed crop will increase by only 0.4% to 22.3 c/ha.
Sunflower production this season will increase by 6.5% year-on-year to 11.813 million tons. Despite the expansion of areas under the crop by 7.7% to 5.64 million hectares, analysts expect yields to be 3.3% lower than last year’s -20.9 c/ha.
Ukrpoliyaprom expects a 9.1% increase in the gross rapeseed harvest, which will amount to 3.318 million tons. It will be harvested from almost 1.35 million hectares (+16.3%) at a yield of 26.5 c/ha (-9.3%).
“At the same time, we should take into account significantly lower carryover residues of oilseeds in Ukraine at the beginning of MY 2023/24 against the beginning of the previous season. Accordingly, the supply in 2023/24 MY will be less, which requires urgent action at the government level to create conditions for maximum domestic processing and increase exports of products with high added value,” – summarized in the industry association.
The low average yield of rapeseed of 1.2-1.3 tons/ha will not allow Ukrainian agrarians to get a high gross of oilseed crop, the yields may level out in the future, but there will not be a record harvest, said the analytical cooperative “Pusk”, created within the All-Ukrainian Agrarian Rada (AAR).
“Rapeseed prices have started to rise sharply, and this trend will continue both in Ukraine and around the world,” the analysts said at a weekly briefing Tuesday.
According to their information, in small river ports the indicative rapeseed prices for a week increased from 330 euro/ton to 345 euro/ton. Supply of Ukrainian rapeseed was low last week. The situation will not change quickly, as the harvest has recently started.
Analysts expect indicative prices in small ports to grow to € 348 / ton by the end of the week, on the terms of CPT – up to € 355-360 / ton in the coming weeks.
Processors sounded purchase prices for rapeseed in a wide range, depending on the region – 12300-13200 hryvnia / ton, the lowest mark in the Odessa region, stated the “Pusk”.
The world prices for biodiesel are rising again, vegetable oils are becoming more expensive, so rapeseed will rise in price at the exchanges. But July and early August will be unfavorable for sales under the pressure of the new harvest, analysts summarized.
