Gross production of soybeans in Ukraine in 2018 could be 4.2-4.3 million tonnes, which is 10% more than in 2017, Regional Director of the Donau Soja Association Oksana Prosolenko has said.
“It is expected that by the end of 2018, we will reach 4.2-4.3 million tonnes of soybeans. It is too early to predict the situation for 2019, given that the rules of the game have changed. You can estimate it at the end of winter and early spring,” Prosolenko told Interfax-Ukraine.
In the eight months ending August 2018, 3.426 million tonnes of soybeans were harvested, while for the whole of 2017, 3.8 million tonnes were harvested, President of the Ukrainian Association of Soybean Producers and Processors (Ukragropromsoya) Viktor Tymchenko said at the second Annual Agrarian-Practical Fat-and-Oil Conference in Kyiv on Thursday.
According to him, the average yield of soybean in 2018 is 2.53 tonnes from one hectare, while in 2017 the yield was 1.6-1.7 tonnes from one hectare due to adverse weather conditions.
Tymchenko also said that the export of soybeans for eight months amounted to 1.5 million tonnes of soybeans, whereas in 2017 – 2.8 million tonnes. The largest importer of Ukrainian soybeans is Turkey (700,000 tonnes of raw soybeans for processing). The import of Belarus has noticeably increased (from 70,000 tonnes to 200,000 tonnes), as the country built a plant for processing soybeans at the border with the EU.
At the same time, according to Prosolenko, Ukraine now has the opportunity of increasing the export of soybeans to EU countries.
According to Tymchenko, soybean export is complicated by the logistics problems of Ukrzaliznytsia. Prosolenko also said that although officially the cultivation of genetically modified soybeans in Ukraine is not allowed and does not officially exist, but in fact, 60-70% of soybeans are modified. It also complicates exports, the expert said.
According to the president of Ukragropromsoya, soybean processing in Ukraine is about 1 million tonnes: 751,000 tonnes of meal and 174,000 tonnes of oil. Export of meal amounts to 39,000 tonnes, oil – 166,000 tonnes.
At the same time, according to the expert, the increase in the processing of soybeans is unlikely, since Ukraine’s domestic sales market is shrinking due to the decrease in the number of animals fed with soybean meal.
Ukraine’s Agricultural Policy and Food Ministry predicts that corn harvest in Ukraine would increase by 19.4% in 2018 compared with 2017, to 29.5 million tonnes.
“We expect the corn harvest this year to be about 29.5 million tonnes, while the export of the crop this agricultural year [2018/2019 agri-year, July-June] will amount to 22 million tonnes,” First Deputy Minister of Agricultural Policy and Food Maksym Martyniuk said at a press conference on Tuesday.
The ministry estimates that the wheat harvest in 2018 may decrease by 7.6%, to 24.2 million tonnes, barley by 13%, to 7.2 million tonnes, rye – by 15%, to 0.38 million tonnes, buckwheat – by 25%, to 0.14 million tonnes, soybean – by 2.6%, to 3.8 million tonnes, and sugar beet – by 10.7%, to 13.3 million tonnes.
The harvest of sunflower can grow by 9.8%, to 13.4 million tonnes, and rapeseed – by 18.2%, to 2.6 million tonnes.
The areas planted with crops for the 2019 harvest will be 8.09 million hectares, in particular 6.2 million hectares with winter wheat, 0.89 million hectares with winter rape, and 0.87 million with winter barley.
The Agricultural Policy and Food Ministry of Ukraine has reviewed upwards the 2018 grain harvest forecast from over 60 million tonnes to 63.1 million tonnes, which is 1.1 million tonnes more than in the previous agricultural year, acting Agricultural Policy and Food Minister Maksym Martyniuk wrote on his Facebook page. “A group of late grain crops will contribute to the growth. Weather conditions were far from optimal, but losses were fragmentary, and as a result we have a decent ratio of bread wheat/coarse grains at 60/40,” he said.
The head of the agrarian ministry added that the export forecast was also increased, to 42 million tonnes.
“It is good news. The situation in the world (poor harvests in supplying countries, rising prices) raises its status to” magnificent,” Martyniuk said.
He also said that if the field works started late spring, the sowing campaign began almost a week earlier: as of September 10, 237,100 hectares were sown with grain, which is 3% of the forecast.
“Rain is a bonus,” the acting minister said.
According to the ministry, as of September 10, the harvest of grain and leguminous crops amounted to 35.4 million tonnes from 10.1 million hectares, or 68% of the forecast. These include early cereals: 34.3 million tonnes were harvested from an area of 9.9 million hectares, and 0.82 million tonnes of corn was harvested from 147,000 hectares (3% of the forecast).
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.
Taking into account grain harvests in the past years and the skills of farmers to work in different weather conditions, Ukraine would have more than enough grain for consumption, Deputy Agricultural Policy and Food Minister of Ukraine Viktor Sheremeta has said.
According to the press service of the ministry, one fifth of wheat harvest is enough for domestic consumption of Ukrainians.
“I want to lift all fears of our compatriots that in Ukraine there may be a shortage of grain, in particular wheat. Today we have so much grain that we need a fifth for domestic consumption of bread, and we export the rest of the grain. We feed the whole world. We harvest and we will harvest at least 60 million tonnes of grain,” the press service said, citing Sheremeta.
According to the ministry, as of June 20, 2018, 610,000 tonnes of grain have been threshed from 192,000 hectares with a yield of 31.7 centners per hectare, of which 48,000 tonnes of winter wheat from 18,000 hectares with a yield of 26.9 centners per hectare.
The grain harvest forecast in Ukraine remains at the level of 2017 – 60 million tonnes and more, despite that some regions in the south and east of the country have no rains, Ukraine’s Agricultural Policy and Food Ministry has reported. According to the report, since early April there were cases of drought in Ukraine, although rains in June stabilized the situation and brought most of the regions from the risk zone. “Rains have started and we expect that in general, gross early and late grain crop harvest will be at the level of the last year,” First Deputy Minister Maksym Martyniuk said.
He said that good hibernation of winter crops and moisture stock positively influenced the start of the harvesting campaign, and no plunge in the yield is expected.
As reported, Ukraine as of June 18, 2019 harvested first 10,500 tonnes of winter wheat.