Three dry cargo vessels with corn and sunflower meal departed from Ukrainian ports on Wednesday, the Joint Coordinating Centre (JCC) has reported.
“On January 4, three ships left Ukrainian ports, carrying a total of 197,851 tonnes of grain and other food under the Black Sea Grain Initiative,” the JCC said.
Three bulk carriers – Presinge (70,514 tonnes of corn), Shen Yu 79 (64,667 tonnes of corn) and Mona KH (44,670 tonnes of corn and 18,000 sunflower meal) – are heading to China.
Seventy applications to join the Black Sea Grain Initiative have been submitted, the center said.
In addition, six ships are awaiting permission to enter the Ukrainian ports, 26 loaded dry cargo ships are waiting to sail to their destinations.
“As of January 4, the total tonnage of grain and other foodstuffs exported from the three Ukrainian ports is 16,630,516 tonnes. A total of 1,239 voyages (616 inbound and 616 outbound) have been enabled so far,” the JCC said.
Three dry cargo ships carrying corn and sunflower seeds left Ukrainian ports on Friday, the Joint Coordination Center (JCC) reported.
“Three ships left Ukrainian ports on December 2, carrying a total of 106,500 tons of grain and other agricultural products under the Black Sea Grain Initiative,” the report said.
Vessel Aspasia Luck is transporting 63 thousand tons of corn to China, Sea Inspiration is delivering 26.5 thousand tons of corn to Italy. Lady Perla dry-cargo carrier will carry 17 thousand tons of sunflower seeds to Bulgaria.
Three vessels, which passed through the sea humanitarian corridor on December 2, are also on their way to Ukrainian ports.
“As of December 2, the total tonnage of grain and other agricultural products exported from the three Ukrainian ports is 12,713,836 tons. A total of 1,031 vessels have been allowed to move so far: 515 to arrive at Ukrainian ports and 516 to leave them,” the report said.
Representatives of the oil and fat industry of Ukraine are asking the Ministry of Economy of Ukraine to increase the duty on the export of sunflower seeds to 10% from 3.5%, this will allow them to be processed domestically into higher-margin sunflower oil, especially in the face of a reduction in the oilseed crop in 2022 from – for the aggression of the Russian Federation.
The proposal to create a working group between the ministry and the specialized association “Ukroliyaprom” to resolve the relevant issue was made by its representative Stanislav Tarshin, the beneficiary of the GradOlia company.
“We understand that the gross harvest of sunflower this year will be 30% less than last year, not 16 million tons, but 9-10 million tons. You can assume that since the beginning of the war, 1.7 million tons have already been exported, and no less will be taken out in the future. We will again be left without jobs, without receiving foreign currency and other things,” he stressed during a panel discussion with Economy Minister Yulia Sviridenko at the business forum “Dialogue between civil society, business and government: wartime challenges” in Kyiv on Friday.
He emphasized that the oil and fat industry of the country may face a shortage of raw materials for the production of sunflower oil due to a smaller sunflower crop in Ukraine in 2022 due to Russian invasion and temporary occupation of part of its territory. This can lead to underloading of enterprises in the industry, a reduction in foreign exchange from oil sales abroad, as well as the closure of enterprises and an increase in unemployment in the country.
To prevent such a development of events, Tarshin proposed to establish a duty on the export of sunflower seeds from the country at a rate of 10% instead of the current 3.5%.
In addition, the representative of Ukroliyaprom called on the Minister of Economy to stimulate deep processing of sunflower oil in Ukraine, including its purification and packaging before selling it abroad.
“We should have reduced the export of crude sunflower oil (in favor of processed – IF-U). Many people think that if we export not sunflower, but crude oil, then this is the final product. This is a big mistake – such oil is a raw material that is subsequently processed many countries of the world. We export 6-6.5 million tons annually, while we only eat 0.5 million tons in the country,” Tarshin specified.
According to him, in order to increase the deep processing of sunflower oil by 50% of the current level, it will be necessary to build about 20 enterprises of this profile in Ukraine, which will additionally create tens of thousands of jobs in the country.
Agroholding KSG Agro harvested sunflower from 5 thousand hectares, which is 60% of the planned 8.4 thousand hectares, the harvesting of this crop is scheduled to be completed by October 12.
According to a press release from the agrarian group, the average sunflower yield was 18 centners per hectare.
“Of course, the current sunflower yield is lower than last year, but our weather pattern is completely different, since spring precipitation was very uneven even within the same farm. c/ha up to 29 c/ha, but on average 18 c/ha,” the holding company quotes the head of its crop production division, Dmitry Emelchenko.
According to him, the completion of the sunflower harvesting campaign depends on weather conditions and is scheduled, tentatively, for October 12.
KSG Agro also sows winter wheat on a total area of 4.2 thousand hectares and cares for winter rape crops on an area of 2.15 thousand hectares.
The vertically integrated holding KSG Agro is engaged in pig breeding, as well as the production, storage, processing and sale of grains and oilseeds. Its land bank is about 21 thousand hectares.
According to the agricultural holding, he is in the Top 5 pork producers in Ukraine.
In 2021, the holding increased its net profit by 16 times compared to 2020, to $20.27 million, revenue by 44%, to $30.75 million, while doubling EBITDA to $12.28 million.
The owner and chairman of the board of directors of KSG Agro is Sergey Kasyanov.
Most oil extraction plants in Ukraine stopped working due to Russia’s military aggression against Ukraine, but in April-May, the plants in the western, central and southern regions of the country began to resume operations due to an increase in sunflower processing margins up to $200/tonne.
“Currently, processors are actively buying sunflower against the backdrop of disappointing production forecasts for the next season… Some plants provide processing services at a price of $80-150/tonne, while others buy sunflower at UAH 15,000-16,500/tonne, receiving a processing margin of up to $200/tonne,” according to the website of the electronic grain exchange GrainTrade.
According to its data, the resumption of the work of Ukrainian oil extraction plants in the western, central and even southern regions of the country is caused by a sharp reduction in the price of sunflower due to difficulties with its export from Ukraine due to the blockade of the country’s seaports by Russian ships.
GrainTrade notes that the price of sunflower will continue to grow, as it is under pressure from its significant stocks from producers and processors, as well as difficulties with the export of oil products – sunflower meal and cake.
“Now it is difficult for processors to sell meal and cake to European consumers due to the increase in logistics costs and falling prices in the EU amid an increase in the supply of Ukrainian products. At the same time, producers are in no hurry to sell sunflower seeds at low prices, expecting an increase in production costs in the new season,” the grain exchange said.
American farmers plan to significantly increase sunflower crops this year due to supply disruptions amid Russia’s military invasion of Ukraine, Bloomberg writes.
At the same time, a jump in agricultural prices to record levels for many years could increase motivation among farmers to plant more, said John Sandbakken, executive director of the National Sunflower Association. The USDA tentatively forecasts a 10% increase in sunflower acreage this year.
“I’m sure the increase will be more, almost 20%,” Sandbakken said in a telephone interview with Bloomberg.
Sunflower is used in a very wide range of products, from potato chips and sunflower oil for frying to bird food and shampoos. However, this year this commodity may be in short supply, as Ukrainian farmers are forced to reduce acreage and exports due to hostilities in the country. Ukraine is considered one of the world’s largest sunflower exporters.
Meanwhile, last year’s devastating drought in the northern Great Plains of the United States plays into the hands of American farmers this year, as it left excess nitrogen in the ground, which reduces fertilizer costs, Bloomberg notes.
The price of new crop sunflower in the US is about $34 per 100 pounds (about 45 kg), higher than the previous record price of $30.5 reached in 2008. Old crop sunflower prices are also nearing their highest since 2011, Sandbakken notes.
