As of November 8, farmers in all regions of Ukraine have harvested 71.4 million tons of new crops from 19.2 million hectares, compared to 68.9 million tons and 18.9 million hectares a week earlier. As reported by the Ministry of Agrarian Policy and Food on Friday, 52.1 million tons (49.9 million tons) of grains and 19.3 million tons (19 million tons) of oilseeds have already been harvested. The Ministry specified that the harvest of wheat has been completed, with 22.3 million tons harvested from 4.9 million hectares at a yield of 42.4 c/ha, barley – 5.6 million tons from 1.4 million hectares at a yield of 39.2 c/ha, peas – 470.4 million tons from 212.2 thousand hectares at a yield of 21.9 c/ha, and rapeseed – 3.5 million tons from 1.3 million hectares at a yield of 27.3 c/ha. Corn harvesting continues, with 22.4 million tons harvested (20.2 million tons a week earlier) from 3.5 million hectares (88% of the plan), buckwheat – 127.2 thousand tons (126.9 thousand tons) from 87.8 thousand hectares (99%), millet – 161 thousand tons (160.3 thousand tons) from 88.1 thousand hectares (95%). Agrarians in 16 regions are harvesting sugar beets, which have been dug up on an area of 238.1 thousand hectares (92%), with 11.4 million tons of sweet roots. Grain harvesting is led by farmers in Odesa region, who have threshed 4.6 million hectares, Chernihiv region – 4.2 million tons, and Poltava region – 4.1 million tons. In terms of yields, farmers in Khmelnytsky region are ahead with 76.9 c/ha, Chernihiv region – 69.1 c/ha, and Ternopil region – 66.8 c/ha.
Revenues from exports of grains, oilseeds, meal and oil in the first quarter of the 2024/2025 season (July-October this year) amounted to $6.1 billion, up $1.6 billion, or 35.6%, compared to the previous season, the Ukrainian Grain Association (UGA) reported on Facebook.
“Over 4 months, Ukraine has received significantly more export revenue from the sale of wheat, barley, rapeseed and soybeans compared to last season,” the industry association stated.
According to the chart below, in July-October 2024, sales of wheat on foreign markets brought Ukraine $1.456 billion, which is 1.9 times more than a year earlier, while revenue from rapeseed exports increased by 50.6% to $1.119 billion, corn by 32% to $849 million, soybeans by 2.1 times to $477 million, and barley by 3 times to $286 million.
At the same time, the revenues from sunflower oil exports in July-October 2024 decreased by 0.7% to $1.356 bln, and sunflower meal by 9.2% to $344 mln compared to the same period last year.
“Kernel, one of Ukraine’s largest agricultural holdings, processed 684 thousand tons of oilseeds in the first quarter of fiscal year 2024-2025 (July-September), up 12% year-on-year, a record high for the first quarter, according to the company’s annual report released on Monday evening.
“This growth was driven by the additional capacity of our new plant, which was commissioned in February 2024, and the earlier start of sunflower harvesting, which improved the availability of seeds in the reporting period. To maximize capacity utilization, Kernel processed oilseeds from third parties under tolling contracts, as well as rapeseed along with sunflower. Out of the total volume, 132 thousand tons were supplied under tolling contracts,” the report says.
According to the agroholding, in the first quarter of 2024-2025, it has already processed 589 thsd tonnes of sunflower seeds and 95 thsd tonnes of rapeseed.
At the same time, oilseed processing volumes decreased by 28% due to a one-month break for maintenance of processing plants in the summer and preparation for the new season.
“Taking into account the quarterly decline in oilseed processing volumes, Kernel reduced sales of edible oil by 30% in July-September 2024-2025 MY to 269 thousand tons, of which 18 thousand tons were bottled sunflower oil.
Kernel Agro Holding is the world’s largest exporter of sunflower oil, one of the largest producers and sellers of bottled oil in Ukraine. It is also engaged in the cultivation and sale of agricultural products.
Kernel’s net profit for FY2023 amounted to $299 million, while the company ended the previous year with a net loss of $41 million. The agricultural holding’s revenue for FY2023 decreased by 35% to $3.455 billion, but EBITDA increased 2.5 times to $544 million.
In the first nine months of FY2024, the agricultural holding reduced its net profit by 53% to $204 million, while revenue decreased by 4% to $2.595 billion, and its EBITDA decreased by 36% to $384 million.
Kernel Agro Holding, one of the largest agricultural companies in Ukraine, processed 951 thousand tons of oilseeds, including 17 thousand tons of rapeseed, in the fourth quarter of fiscal year (FY) 2024, bringing the total processing volume to 3.2 million tons in FY 2024.
“This represents an increase of 27% year-on-year, primarily due to new crushing capacity added in February 2024 and the commissioning of a new oil extraction plant in Western Ukraine,” the company explained in a report to the Warsaw Stock Exchange on Monday.
According to the report, sales of sunflower oil in April-June 2024 increased by 1% quarter-on-quarter to 384 thousand tons, including 20 thousand tons of bottled sunflower oil.
The volume of silo acceptance in the fourth quarter of FY2024 was seasonally low and amounted to 53 thsd tonnes, bringing the total production in FY2024 to 2.8 mln tonnes, which is the same as in the same period last year, the agroholding said.
At the same time, the volume of grain exports from Ukraine in the last quarter of the financial year amounted to 1.61 mln tonnes, 46% of which were to foreign buyers. This is 14% less than in the previous quarter, but 2.6 times more than in the same period last year.
“For the whole of fiscal year 2024, Kernel exported 5.5 million tons of grain, up 47% year-on-year. Grain received from external suppliers accounted for 2.6 million tons of the total export volume. The agricultural holding attributed this growth to well-functioning export routes through the Black Sea for most of the year.
In April-June 2024, the transshipment volume of the group’s export terminals decreased by 8% compared to the previous quarter and amounted to 2.3 mln tons, indicating a slowdown in grain exports.
For the whole of FY2024, Kernel transshipped 6.7 mln tons of grain, sunflower oil and meal through its terminals, up 51% year-on-year. This growth was driven by the resumption of export routes through deep-water ports starting in the second quarter of FY2024. Grain accounted for 75% of the total transshipment volume in FY2024, edible oil for 12%, and meal produced from residues.
To improve terminal capacity utilization, the Group provided transshipment services to third parties in FY2024, totaling 486 thousand tons.
“Critically high temperatures and prolonged lack of precipitation in all regions of the group’s presence negatively affected the yield potential of spring crops in the fields, especially soybeans and, to a lesser extent, corn,” the agricultural holding summarized.
Before the war, Kernel Agro Holding was the world’s leading producer of sunflower oil (about 7% of global production) and its exports (about 12%). It is one of the largest producers and sellers of bottled oil in Ukraine. In addition, it is engaged in the cultivation and sale of agricultural products.
Kernel’s net profit for FY2023 amounted to $299 million, while the company ended the previous year with a net loss of $41 million. The agricultural holding’s revenue for FY2023 decreased by 35% to $3.455 billion, but EBITDA increased 2.5 times to $544 million.
In the first half of FY2024, Kernel’s net profit fell 3.6 times compared to the first half of FY2023, to $102 million, and EBITDA halved to $223 million, with revenue down 16% to $1.59 billion.
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.
Oilseeds harvest in Ukraine could grow by 1.5 million tonnes this year compared with 2017, to 21.7 million, according to the UkrAgroConsult consulting agency.
“According to the results of this year, we forecast growth of the harvest to 21.7 million tonnes for three main oil crops – sunflower, rapeseeds and soybeans,” Director General of the UkrAgroConsult consulting agency Serhiy Feofilov said at a press conference at Interfax-Ukraine.
According to him, Ukrainian farmers continue expanding crop areas, increasing yield and general production of sunflower and other oilseeds, as these crops are currently the most profitable.
“Now the prices for wheat and barley are very close to each other, it is about $230 per tonne FOB, but even six months ago wheat was at around $180-190 per tonne FOB. The prices for corn are about $185 per tonne FOB, which is due to expectations of a high harvest, but even these prices are $30 higher than a year ago,” the UkrAgroConsult director general said.
At the same time, he said that even now grain crops will not be able to compete significantly with oilseeds, although the prices for grain have grown by 15-20%.
“Presumably, the main reason for the increase in grain prices will be the current unfavorable weather conditions in the three major grain-producing regions of the planet, but probably in 12-18 months the prices for grain will return to the previous level,” Feofilov said.
In his opinion, despite the increase in oilseed crushing capacities, the demand for raw materials and the supply of oil, the growth of exports is not accompanied by an increase in foreign exchange earnings, which is the fundamental reason for the trend towards a decrease in the profitability of the oilseed complex of Ukraine.
“Currently, the prices of vegetable oils, including sunflower, are at the lowest level over the past decade – about $700 per tonne FOB. It should be emphasized that the export of oilseed products – oil, meal, soy and rape is about 40% of all agrarian and food exports of Ukraine,” Feofilov said.
According to the forecasts of UkrAgroConsult, in Ukraine the production and stocks of both sunflower and sunflower oil will be significant by the end of the next season, and this will put pressure on prices both domestic and export.
“It is likely that sunflower areas (6.5 million hectares in 2018) will be stable in the structure of crops in Ukraine in the future, which is due to the considerable demand and crushing capacities, which in Ukraine are 20 million tonnes,” Feofilov said.
The director general of the consulting agency said that the creation and promotion of a national brand of sunflower oil is an effective and proven tool for overcoming the tendency of falling profitability.
“Manufacturers now do not think about creating a national brand, most likely because they are getting enough margin, but the situation may change, moreover, it is already changing. Export in physical terms, in tonnes, is a trend towards growth, and exports in revenue at cost, in dollars – a downward trend. Branding is expensive, we are talking about hundreds of millions of U.S. dollars, but the results will be extremely positive,” he said.