Business news from Ukraine

Ukraine plans to harvest up to 20 mln tons of wheat this year

Ukraine plans to harvest up to 20 million tons of wheat, which is five times more than domestic demand, Prime Minister Denys Shmyhal said.
“Yesterday, the first ship with Ukrainian food left the port of Odessa… Firstly, this makes it possible to increase foreign exchange earnings and business income. Not only in the agricultural sector, which employs hundreds of thousands of people, but also in related industries. The second aspect: Ukraine remains important player in the global food market,” he said at a government meeting on Tuesday.
The prime minister stressed that the unblocking of exports is also directly related to the new crop, which is now being harvested by Ukrainian farmers.
“As of the end of July, about 12 million tons have already been harvested. At the same time, we expect to harvest up to 20 million tons of wheat alone, which is five times more than domestic demand. Therefore, it is important for us to help farmers preserve and sell the new crop,” Shmyhal summed up.


Export of wheat from Ukraine in new season may be reduced by more than third – opinion

The export potential of Ukrainian wheat in the 2022/2023 marketing year (MY, July-June) may be about 12 million tons, which is 36% lower than in the previous 2021/2022 MY (18.7 million tons) and by 28% less than the year before last 2020/2021 MY (16.6 million tons).

As reported on the APK-Inform agency website on Friday, the decline in wheat exports is due to a 39% decrease in the expected gross grain harvest in Ukraine in 2022/23 MY compared to the previous season – to 52.3 million tons from 86 million tons, as well as the limited capacity of the country’s export infrastructure.

According to him, Egypt and Indonesia have been the key importers of Ukrainian grain products for several seasons: at the end of 2021/2022 MY, their shares in total exports amounted to 16% and 14%, respectively (2.9 million tons and 2.5 million tons in natural expression). It is specified that in 2021/2022 MY, Egypt increased purchases of Ukrainian wheat in relation to the season 2020/2021 MY by 19%, and Indonesia – by 2%.

Turkey became the third largest importer of Ukrainian wheat in the past MY – its imports more than doubled compared to the previous season – from 794 thousand tons to 1.9 million tons, and its share in total exports increased from 5% to 10%.

As reported, the US Department of Agriculture (USDA) 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.

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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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In the July report, the US Department of Agriculture (USDA) reduced the forecast for the harvest of Ukrainian wheat in 2022/2023 marketing year (MY, July-June) by 2 million tons compared to June, to 19.5 million tons, while the estimate of its exports is kept at the level of 10 million tons.
“Production in Ukraine is reduced by 2 million tons to 19.5 million due to a reduction in acreage, as indicated in the statistics provided by the government of the country,” the US Department of Agriculture said in a report released on Tuesday.
According to the document, the assessment of domestic wheat consumption in Ukraine was reduced by 1 million tons – from 11.2 million tons to 10.2 million tons, including for feed – from 6 to 5 million tons, follows from the USDA July report.
In addition, from 6.01 million tons to 5.24 million tons, the forecast for carryovers at the end of the current marketing year was reduced compared to 5.84 million tons at its beginning.
The US Department of Agriculture in the new forecast kept the forecast for corn exports from Ukraine in 2022/2023 MY at the level of 9 million tons, and its harvest – 25 million tons. At the same time, the forecast for its domestic consumption in Ukraine was also left at the same level of 10.7 million tons.
According to the report, in general, the forecast for the feed grain harvest in Ukraine for MY 2022/23 remains at 31.76 million tons, and its exports at 10.83 million tons.
As reported, Ukraine in the marketing year 2021/2022 (MY, July-June) exported 48.51 million tons of grain and leguminous crops, which is 8.4% higher than in the previous marketing year, despite the full-scale invasion of the Russian Federation and difficulties with the export of agricultural products from -for the blockade of Ukrainian seaports.
In general, in MY 2021/2022, the country supplied to foreign markets 18.74 million tons of wheat (12.6% more compared to the same date in 2020/2021MY), 23.54 million tons of corn (+1.9%), 5 .75 million tons of barley (+35.9%), 70.9 thousand tons of flour (-44.1%).
The wheat harvest last year amounted to 33 million tons, feed grain – 53.5 million tons, including corn – 42.13 million tons.

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Wheat and its mixture with rye (meslin) are excluded from the list of goods whose export is subject to licensing, the Cabinet of Ministers made the corresponding decision at a meeting on Friday, Taras Melnychuk, a government representative in parliament, said.

“The commodity items “Oats” and “Mineral or chemical, nitrogen fertilizers” have been excluded from the volume of quotas of goods whose export is subject to licensing. These items are included in the List of goods whose export is subject to licensing,” he added in his telegram message.

As reported, on March 7, the Government of Ukraine expanded the list of goods the Ministry of Economy will issue export permits for: wheat, corn, poultry meat, chicken eggs and sunflower oil were included in the list of licensed exports.

Already in March, corn and sunflower oil were excluded from this list, but wheat remained, despite the requests of market participants.

As for oats, on March 5, a ban was introduced on its export in the form of a zero quota.

Nitrogen fertilizers were also banned for export at first, but at the end of March the government allowed their export within the quarterly quota of 210,000 tons, or 70,000 tons per month.

In June this year, Ukraine managed to increase grain exports by 23% by May – up to 1.4 million tons. In terms of crops, corn accounted for 86%, wheat – 10%, barley – 3%.

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Licensing of wheat exports from Ukraine, introduced on March 6 amid Russian aggression, has created additional pressure on domestic wheat purchase prices, and the abolition of this state regulation will revive exports and stabilize prices for this exchange commodity.

This is how experts of the electronic grain exchange GrainTrade commented on the statement made recently by First Deputy Minister of Agrarian Policy Taras Vysotsky about the abolition of licensing for wheat exports in July, according to the website of the grain trading platform on Monday.

“Amid blocked ports, the purchase prices for grain in Ukraine fell sharply, but the introduction of licenses for the export of wheat further increased pressure on prices, which dropped to UAH 5,500-6,500/tonne with delivery to the mill… In anticipation of the harvesting of the new crop, agricultural producers have to vacate warehouse space, therefore, they are activating wheat sales, which increase pressure on prices. Therefore, the cancellation of licenses will revive exports and stabilize wheat prices,” GrainTrade said in a statement.

According to it, licensing complicates the export of wheat bran for processing enterprises, which are forced to spend additional funds on their storage or disposal, which also pushes down the price of wheat in Ukraine.

As reported, last week, Deputy Minister Vysotsky, at a meeting with representatives of the European Business Association, said that Ukraine planned to cancel the licensing of wheat exports in July and recalled active cooperation with Baltic and Polish partners to create alternative routes for the export of Ukrainian agricultural products.

The Ministry of Agrarian Policy is also working to continue the abolition of quotas and duties for the entire period of Ukraine’s candidacy for the EU, as well as the harmonization of legislation with the European one.

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