Business news from Ukraine

Forecast of grain and oilseeds harvest in Ukraine improved by 5-7 mln tons to 65-67 mln tons

The forecast for the harvest of grain and oilseeds in Ukraine this season has been improved by approximately 5-7 million tons – up to 65-67 million tons from 60 million tons, according to the website of the government portal on Wednesday.
It is specified that the increase in the harvest forecast was announced by the Minister of Agrarian Policy and Food Mykola Solsky during a conference call between Prime Minister Denys Shmyhal and the heads of regions.
In turn, the Prime Minister noted that in the context of the Russian military invasion in Ukraine, 12 million tons of new crop grain have already been harvested from a total area of 3.5 million hectares.
Shmyhal also announced the emergence of additional opportunities for grain exports due to the unblocking of the Odessa seaport under the Istanbul Agreement on the export of agricultural products from Ukraine, concluded on July 22 under the auspices of the UN.
“In total, in June we exported 3.2 million tons out of 5 million tons (pre-war monthly volumes – IF-U) that were required. Exports are gradually growing both by rail, by road, and through the Danube ports. Sea ports will significantly expand these opportunities and farmers will receive new opportunities for the sale of products. The state is doing everything necessary for this,” the Prime Minister’s government portal quotes.
Shmygal also noted the recently introduced grant program for the development of horticulture, greenhouses, the development of processing and micro-enterprises, under which over 5,000 applications have already been submitted and processed, and this week the first applicants will receive state support.
As reported, the US Department of Agriculture in the July report predicts the harvest of Ukrainian wheat in the 2022/2023 marketing year (MY, July-June) at the level of 19.5 million tons, its export – 10 million tons, domestic consumption within the country – 10.2 million tons . The corn harvest is estimated at 25 million tons, export – 9 million tons, domestic consumption – 10.7 million tons.
In early July, the Ukrainian Grain Association (UGA) increased the forecast for the harvest of grains and oilseeds in Ukraine in 2022 by 4.4% compared to the May forecast, to 69.4 million tons from 66.5 million tons.
According to her forecasts, in 2022 the wheat harvest is expected at the level of 20.8 million tons (+8.3% to the organization’s May forecast); 27.3 million tons of corn (+4.6%); 6.6 million tons of barley (forecast kept); 9 million tons of sunflower (forecast kept); 2.2 million tons of soybeans (+4.7%); 1.5 million tons of rapeseed (+13.3%).

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Kazakhstan would like to become supplier of wheat and oilseeds to Saudi Arabia – Tokayev

The agricultural sector of Kazakhstan has great potential and can become one of the long-term suppliers of high-quality wheat and oilseeds to Saudi Arabia, President of the Republic Kassym-Jomart Tokayev said.
“Kazakhstan ranks second in the world in terms of arable land per capita and fifth in terms of pasture resources (180 million hectares). Our country is one of the 10 largest producers of wheat and flour. We are ready to become one of the stable, long-term suppliers of high-quality wheat, flour and oilseeds to the kingdom,” Tokayev said, speaking at an investment round table with representatives of the business community of Saudi Arabia on Sunday in Jeddah.

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The Ukrainian Grain Association (UGA) increased the forecast for the harvest of grain and oilseeds in Ukraine in 2022 by 4.4% compared to the May forecast – up to 69.4 million tons from 66.5 million tons, according to the UGA website on Wednesday.

At the same time, the assessment by the association of sown areas under these crops increased by 1.6% compared to forecasts in May – up to 19.1 million hectares from 18.8 million hectares.

“Ukrainian farmers, despite the difficult wartime conditions, minefields and hostilities due to the aggressive war of the Russian Federation, continue to courageously fight for the harvest so that Ukraine has enough grain and can export part of the crop to the world market. This year, Ukraine can get 69 .4 million tons of grain and oilseeds from an area of about 19.1 million hectares,” the UGA said in a statement.

At the same time, the export of grain and oilseeds from Ukraine in the 2022/2023 marketing year (MY, July-June) can reach 31.5 million tons, subject to a significant increase in the throughput capacity of border crossings on the western borders of Ukraine. Given the current throughput capacity, Ukraine can count on the export of about 25-30 million tons of crops in the 2022/2023 marketing year that has begun.

According to the results of 2021/2022 MY, it is expected that the transitional crop balances in the country will amount to about 25.9 million tons (+0.9 million tons compared to UGA forecasts in May). In 2022/2023 MY, this figure may increase to 36.6-48 million tons due to the inability to export agricultural products at the usual pace for Ukraine. In May, the association predicted transitional balances for 2022/2023 MY at the level of 31-43 million tons.

According to UGA forecasts, in 2022, a wheat harvest is expected at the level of 20.8 million tons (+8.3% compared to the organization’s May forecast); 27.3 million tons of corn (+4.6%); 6.6 million tons of barley (forecast kept); 9 million tons of sunflower (forecast kept); 2.2 million tons of soybeans (+4.7%); 1.5 million tons of rapeseed (+13.3%).

UGA also predicts the export of wheat in 2022/2023 MY at the level of 10 million tons, corn – 10 million tons, barley – 2 million tons, sunflower – 6 million tons, soybeans – 1.8 million tons, rapeseed – 1.45 million tons.

“In general, the export of grains and oilseeds in 2022/2023 MY can be expected at the indicated level, if Ukraine, under the blockade of the Black Sea ports, can double the throughput of other logistics directions, including railway crossings at the borders with the EU countries,” the association explained in message.

At the same time, the unblocking of the Black Sea ports will greatly simplify the logistics and cost of transporting grain for export, and producers will be able to make a big profit for the grown crop in accordance with the high prices for agricultural crops that are currently prevailing on the world market. “Unblocking Ukrainian ports and ensuring the safety of navigation in the Black Sea is the only way to quickly and effectively resume Ukrainian grain exports to countries in dire need. The lack and high cost of food can cause, according to UN estimates, famine in many poor countries of the world, mass protests and riots, and as a result mass migration of people from Africa and the Middle East to the EU,” the UGA summed up in the message.

As reported with reference to the data of the State Statistics Service, in 2021 Ukraine harvested a record harvest of grain and leguminous crops in the amount of 85.7 million tons, which is 32% more than in 2020. In total, 32.07 million tons of wheat (+28.9%), 41.87 million tons of corn (+38.2%) and 9.42 million tons of barley (+23.3%) were harvested.

Ukraine in 2021 also harvested 16.38 million tons of sunflower (+25% compared to 2020), 10.8 million tons of sugar beet (+18.1%), 3.5 million tons of soybeans (+24.4%), 2.92 million tons of rapeseed and 42 thousand tons of oilseed flax (an increase of 3.7 times).

The Ukrainian Grain Association (UGA) is an association of producers, processors and large grain exporters who annually export about 90% of Ukrainian grain products.

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The production of grains and oilseeds in 2022 in Ukraine is preliminary estimated at 53.3 million tons, which is 51% lower than the record figure of the previous season, due to the Russian military invasion and ongoing hostilities, this year’s harvest may be the lowest in the last 10 -15 years.
“We estimate the total production of grains and oilseeds in 2022 at 53.3 million tons, which is 51% lower than the record figure of the previous season. At the same time, for grains, the harvest may be minimal over the past 15 years, and for oilseeds – over the last decade,” such harvest estimates are given on the website of the APK-Inform agency on Thursday.
The organization clarified that for the 2022 harvest, the area under winter grain crops decreased by 7% compared to last year – to 7.6 million hectares, which practically coincides with the figure for 2020. At the same time, the area under spring grain and leguminous crops, the sowing of which began this month, due to the occupation of part of the territories and hostilities by Russian invaders, can be reduced much more significantly – by 39%, to 4.7 million hectares.
In turn, the total area sown with oilseeds in Ukraine in 2022 may be about 6.8-6.9 million hectares, taking into account the areas already sown under winter rapeseed.
At the same time, a change in the structure of oilseed crops is expected. In particular, the share of sunflower acreage is projected to decrease from 73% in 2021 to 61% in 2022, while the share of rapeseed will increase from 12% to 21%, and soybean from 15% to 17%.
It is specified that as a result of hostilities, the sowing campaign in nine regions of the country looks very dangerous: Chernihiv, Sumy, Kiev, Kharkov, Luhansk, Donetsk, Zaporozhye, Kherson and Nikolaev. Partially risky areas for sowing are currently noted in Zhytomyr, Poltava and Dnepropetrovsk regions.
The agency emphasized that in addition to a decrease in the area under crops, a general decrease in crop yields is expected in Ukraine due to the limited access of farmers to the necessary resources, such as fuel, fertilizers, plant protection products, etc. However, even the projected volumes of crop production are enough to meet the domestic food needs of Ukraine .
As reported, as of March 25, Ukraine sowed 150,000 hectares of agricultural land in regions where there are no active hostilities against the troops of the Russian invaders.
Due to the military aggression of the Russian Federation in Ukraine, a decrease in the acreage of high-margin crops (sunflower and corn) is expected this season, while increasing the acreage of crops that are easier to produce, but important in terms of food security, peas, barley and oats.
In 2021, during the spring sowing season, Ukraine sowed 14 million hectares of agricultural land, including sunflower – 6.5 million hectares, corn – 5.3 million hectares, barley – 1.35 million hectares, peas – 0.242 million hectares, sugar beet 0.227 million ha, oats – 0.194 million ha, spring wheat – 0.176 million ha.

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Exports ofgrains and oilseeds in the 2020/2021 marketing year (MY, September-August) will amount to 46.8 million tonnes, which is a quarter less than in the record 2019/2020 MY.
According to the website of the Ukrainian Grain Association (UGA), citing data from grain traders, the maximum export volume of these crops in the current season will not exceed the values specified in the annexes to the memorandum between the Ministry of Economic Development, Trade and Agriculture and market participants.
The UGA clarified that the rate of grain export in the current MY is significantly lower than last year’s indicators, which is due to the conjuncture of world markets.
The association expects that wheat exports in the current season will not exceed 16 million tonnes, which is significantly lower than the volume specified in the appendix to the memorandum of 17.5 million tonnes. Corn exports in the current season will not exceed 22 million tonnes, which is also below the limit set in the annex to the memorandum – 24 million tonnes.
As reported, Ukraine exported 37.71 million tonnes ofgrains and legumes since the beginning of 2020/2021 MY, which is 23.6% less than on the same date of the previous MY.
According to the information and analytical portal of the agro-industrial complex of Ukraine, to date, 14.78 million tonnes of wheat, 18.19 million tonnes of corn, 4.12 million tonnes of barley and 102,200 tonnes of flour have been exported.

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The harvest of grains and oilseeds in the 2021/2020 marketing year may exceed 100 million tonnes, Minister of Agrarian Policy and Food Roman Leshchenko said on Monday.
“If the amount of precipitation is at the same level as we see in May, then there will be an increase in soybeans as well,” the minister told Interfax-Ukraine.
According to him, the timely implementation of the complex of spring field work by the farmers makes it possible to assess the volume of the harvest in the current season with “healthy optimism.”
“We have all the prerequisites for setting an absolute record this year – the harvest of grain and oilseeds [at the level of] 100 million tonnes,” he said at a press conference in Kyiv.
As reported, the Ukrainian Grain Association (UGA) estimated the growth of the potential harvest of grains and oilseeds in the 2021/2022 marketing year by 14.5% compared to 2020/21, to 96.25 million tonnes thanks to good wintering of winter crops and favorable weather conditions.

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