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.
Grain harvest in Ukraine in the 2018/19 agricultural year (July-June) could grow by 3% compared with the previous year, to 61.85 million tonnes, according to projections of the Ukrainian Grain Association (UGA). “In the 2017/18 agri-year exports of grain will be 40.6 million tonnes, and next agri-year we forecast growth of exports by 6%, to 43.3 million tonnes,” UGA President Mykolav Horbachev said.
In particular, wheat harvest in the 2018/19 agir-year could expand by 2.2%, to 27.1 million tonnes, that for corn – by 9%, to 27 million tonnes, and the barley harvest could narrow by 9.3%, to 7.8 million tonnes.
The association said that in the 2018/19 agri-year wheat exports could grow by 5.8%, to 18 million tonnes, corn – by 10.5%, to 21 million tonnes, and barley exports could fall by 6.5%, to 4.3 million tonnes.
As of April 24, 2018, Ukraine exported 15.4 million tonnes of wheat, 4.1 million tonnes of barley and 13.8 million tonnes of corn, according to the UGA.
The grain harvest in Ukraine may grow from 61.3 million tonnes in 2017 to 62 million tonnes in 2018, according to the UkrAgroConsult consulting agency. “This year the gross harvest will reach the level of 62 million tonnes. Exports will amount to 41 million tonnes for the 2017/2018 marketing year. In the next marketing year we forecast growth of exports by at least one million tonnes,” grain market analyst at UkrAgroConsult Maryna Sych said at a press conference at Interfax-Ukraine.
According to her, this year there is a competition between crops due to the fact that the timing of sowing early and late spring crops has almost coincided.
“Now we have virtually a week to fulfill the barley sowing plan, as further it will be necessary to start sowing maize and sunflower. The question of implementing the plan for sowing spring barley remains open,” she said. UkrAgroConsult expects in the current conditions that the area under barley this year will be reduced, the yield will be about 7.7-7.8 million tonnes. If the farmers manage to fulfill the barley sowing plan, the crop can reach eight million tonnes against 8.3 million tonnes in 2017.
The area under maize, according to the agency, will remain at last year’s level. There may be a slight increase in the area if it is necessary to compensate for the reduction of barley crops. The maize harvest is projected at 26 million tonnes, or at 28 million tonnes if the sowing area is increased, compared to 24.1 million tonnes in 2017.
The analysis of weather information and gardeners’ reports on the situation in the gardens make it possible to hope for a record high apple harvest, as well as the yield of many other types of fruits and berries in Ukraine in 2018, the Ukrainian Horticultural Association has said. According to a preliminary forecast of the association, the anomalously cold and snowy March of the current year with a high probability will delay the flowering of the gardens, which will allow reducing the likelihood of losses from spring frosts, while the relatively stable climatic conditions of the winter allowed gardeners to almost completely prevent damage and depletion of trees.
The experts expect the total harvest in 2018 to increase, as a significant number of young gardens will begin to bear fruit.
The union said the EU expects a record high apple harvest after last year’s frosts sharply reduced productivity in the gardens. Accordingly, competition in the European apple market will intensify, which will affect prices.
“It’s worth expecting a sharp decline in prices in the apple market in Ukraine. Especially it will be difficult for producers who grow apples of not very popular varieties and low quality. It is likely that such apples will be sold at the same price as industrial ones. At the same time, quality apples of prospective varieties will be actively exported, so exporting producers can even increase their revenue compared to the 2017/2018 season. Quality apples will be sold in the domestic market at a 30-50% lower price than in the previous season,” the association notes.