Business news from Ukraine

UKRAINIAN AGRIBUSINESS CLUB LOWERS 2020 CORN HARVEST FORECAST

The Ukrainian Agribusiness Club (UCAB) has revised downward the forecast for the corn harvest this year from 32 million tonnes to 29.4-29.5 million tonnes under the optimistic scenario due to unfavorable weather conditions during July-August, and also taking into account the situation with harvesting in September and October in a number of regions of Ukraine.
According to a message from UCAB on Wednesday on Facebook, about 13 million tonnes of corn have already been harvested with an average yield of 5.18 tonnes per ha, in some regions corn has already been harvested from more than 50% of the sown area.
“Usually, farmers start harvesting first from less productive fields, so there is some hope, as well as statistical confirmation from the example of last year, when at the end of the harvest, the yield increases slightly. By the end of field work, according to optimistic forecasts, an average yield of 5.75 tonnes per ha is expected,” UCAB said.
According to the Ukrainian Agribusiness Club, unfavorable conditions have developed almost throughout the entire territory of Ukraine, however, the greatest reduction in the expected yield occurred in Cherkasy, Vinnytsia, Poltava, Kirovohrad and a number of southern regions. As a result of dry conditions and a lack of moisture in the soil, premature drying and maturation of plants is observed. During field surveys, insufficient fullness and relatively small sizes of corn ears are often detected.
UCAB’s expectations for the sunflower harvest have been reduced to 12.2 million tonnes from the forecast of 13.6 million tonnes in early September. According to calculations, the average yield is 2.2 tonnes per ha. The largest decline was due to the southern regions, where the production of this oilseed is focused, as well as the central ones.
According to UCAB, soybeans also suffered significantly from unfavorable conditions, so its gross yield is expected to be only 2.7 million tonnes, which is 30% less than last year. This significant decrease occurred, among other things, due to a decrease in the area under crops from 1.6 to 1.3 million hectares.

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INTERNATIONAL RESERVES OF UKRAINE MAY EXCEED $27.2 BLN– FORECAST

The international reserves of Ukraine by the end of 2020 may exceed the level of $27.2 billion in the April forecast of the National Bank of Ukraine (NBU), the press service of the regulator has told Interfax-Ukraine. “The relatively favorable situation in the world commodity markets, a significant decline in imports, and the signing of a new program with the IMF give reason to expect that international reserves ($25.4 billion at the end of May) will grow even more by the end of the year than according to our April forecast ($27.2 billion),” the report said.
The press service said that the corresponding forecast is the current assumption, recalling that the central bank will present a new macroeconomic forecast in July.
“It’s probably hard to say what the next steps will be like – the uncertainty is too high. Back in April, let’s say, we didn’t even forecast a reduction in the refinancing rate below 7% this year, but today we have already reduced it to a record level of 6%,” the regulator’s press service said.
As reported, the IMF predicts a reduction in Ukraine’s international reserves this year from the current $25.4 billion to $19.3 billion, with a recovery in 2021 to $23.4 billion and in 2022 to $26.5 billion.

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UKRAINE EXPERIENCES OPTIMISTIC FORECAST OF EPIDEMIC DEVELOPMENT

Prime Minister of Ukraine Denys Shmyhal declares that Ukraine experiences an optimistic forecast of the development of the epidemic in the country.
“We are heading in accordance with an optimistic forecast for the development of the epidemic in Ukraine,” he said at an extraordinary government meeting on Monday.
The premier also noted that Ukraine is approaching a “plateau” when there are no significant increases in the disease rate.

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ECONOMY MINISTRY IMPROVES FORECAST FOR GRAIN HARVEST IN UKRAINE

The Ministry of Economic Development, Trade and Agriculture predicts that Ukrainian farmers will harvest 63-65 million tonnes of grain and leguminous crops in 2020 against the previously projected 60 million tonnes. “Looking at the sown area, we expect the final gross grain production at the level of 63-65 million tonnes, which is 2.5 times more than the domestic market needs. We can formulate the final figure at the end of May, everything will depend on rains in this period. According to the forecast, they should be. Perhaps even the figure will be larger,” Deputy Economy Minister Taras Vysotsky said on the air of Ukraine 24 TV Channel.
Vysotsky noted that there are no threats to food security nationwide due to adverse climatic conditions, a critical situation has developed only in Odesa region.
“The losses there are large, sometimes up to 50% of the sowings. Now they’ll sum up the potential losses, they will transfer documentation, hold commissions and consider the possibility of financing from the reserve fund or other available instruments. We will study the situation in this region to support those farmers who have a large percentage of losses and there is a risk of becoming bankrupt,” the official said.

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UKRAINE’S GRAIN HARVEST FORECAST INCREASES TO 94 MLN TONNES, EXPORTS TO 57.2 MLN TONNES

The Ukrainian Grain Association (UGA) in the April report updated its forecast for the harvest of grain and oilseeds in the 2020/2021 marketing year (MY) compared to March, to 94 million tonnes from 92.6 million tonnes.
According to the association’s Thursday press release, the forecast for grain and oilseeds exports for next season is also increased from 55.6 million tonnes to 57.2 million tonnes.
According to the association, in the current marketing year, Ukraine produced 98 million tonnes of grain and oilseeds, exports can reach 60 million tonnes.
The association said that a slightly decrease in the forecast for the harvest of grain and oilseeds in 2020 does not change the upward trend of the last three years, when Ukraine harvested more than 90 million tonnes. In the medium term, gross harvest in the country will approach 100 million tonnes and will continue growing.
The forecast for the harvest and export of wheat in the next marketing year has not changed compared to the March report and will reach 25.8 million tonnes and 18 million tonnes, respectively.
The association said that in 2019, Ukraine had a record-hitting wheat harvest of 28.2 million tonnes, and exports, according to its estimates, will reach 20.2 million tonnes in the 2019/2020 marketing year.
The forecast for corn harvest in the April report of the association increased from 34.3 million tonnes to 36.8 million tonnes, and export for the next season from 27.5 million tonnes to 30 million tonnes. Thus, Ukraine in the 2020/2021 marketing year may break its own record for the current marketing year, when 35.2 million tonnes were harvested with an expected export of about 28.5 million tonnes, the association said.
At the same time, the association decreased the forecast for barley harvest compared to the previous month forecast from 7.96 million tonnes to 6.8 million tonnes, and export for the next season from 4.5 million tonnes to 3.5 million tonnes.
According to its estimates, in the current marketing year in Ukraine, some 9 million tonnes of barley were grown with the planned export of about 4.6 million tonnes.
The Ukrainian Grain Association is an association of producers, processors and large exporters of grain, which annually export about 90% of Ukrainian grain products.

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UKRAINE TO DOUBLE ELECTRICITY IMPORTS, REDUCE PRODUCTION–FORECAST

The Ministry of Energy and Environmental Protection of Ukraine has included in the forecast balance of electricity generation in the Integrated Power System (IPS) of Ukraine for 2020 the growth of electricity imports at twice compared to the actual indicator of 2019, to 5.615 billion kWh.
According to the updated balance posted on the ministry’s website, electricity exports are also expected to grow by 30%, to 8.455 billion kWh.
The electricity generation will decrease by 1.2% compared with the actual indicators of 2019, to 152.105 billion kWh. In particular, nuclear power plants expect to reach 80.639 billion kWh of electricity generation (2.9% less compared to 2019), thermal power plants 42.129 billion kWh (6.2% less), combined heat and power plants and cogeneration plants 11.064 billion kWh (1.8% more), all hydroelectric power stations 5.088 billion (22% less), pumped storage plants 1.258 billion kWh (6.6% less), block stations 1.643 billion kWh (7% less), and alternative energy sources 10.284 billion kWh (85.6% more).
Thus, according to forecasts, the share of nuclear power plants of the structure of electricity generation in 2020 will be 53.02% (53.91% at the end of 2019), thermal power plants some 27.7% (29.17%), combined heat and power plants and cogeneration plants some 7.27% (7.06%), hydroelectric power stations some 3.35% (4.24%), pumped storage plants some 0.83% (0.87%), block stations some 1.08% (1.15%), and alternative energy sources some 6.8% (3.6%).
Electricity consumption in the country is expected to reach 147.517 billion kWh in 2020, which is 1.8% less compared to the actual indicators of 2019.
Electricity consumption of pumped storage plants in the pump mode is predicted to be 1.752 billion kWh (1.834 billion kWh in 2019).

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