21.04.2022
At the beginning of 2022, analysts had predictions and collected statistical data on grain production, export and the development of the grain and grain crops market in Ukraine. Our specialists prepared the next digest. But, as you know, war of conquest against Ukraine changed a lot.
Statisticians took into account harvest in this marketing year and last year, forecast and weather conditions, ground moisture, which affects both harvests and sowing season. They were taking account all details… Or almost all. They just haven`t taken into account that another state would attack sovereign Ukraine without a declaration of a war. However, we will try to show you some important figures of grain market.
Production of grain and leguminous and oil seeds in Ukraine in 2021-22 marketing year is about 76 million tons. The interim forecast for cereal production was based on high yields of early harvest data according to operational data from the fields. And also took into account the dry weather in the sowing season and heavy rains in the harvest season (as you know, heavy rains restrained harvesting works).
As for corn, for example, the prevailing weather conditions and a sufficient amount of moisture in the ground always contribute to the growth and increase in its crops. Thus, Ukrainian agrarians could collect the record harvest in 2021.
All these nuances and details were reflected in prices at the beginning of 2022 (January-February). That time prices for cereals have increased significantly in Ukraine.
Compared to December 2021, rice and millet prices rose even before the war.
For example, the increase in the average monthly price of millet on February 1 amounted to 1.76 UAH. – from 19.91 UAH/kg to 21.67 UAH/kg. Long rice has risen in price by 3.56 UAH. – from 38.34 UAH/kg to 41.9 UAH/kg, round rice – from 34,54 UAH/kg to 35,2 UAH/kg.
Before the war, the price of buckwheat increased significantly. As per data of “Minfin” publication, as of January 30, 2022, the average monthly price of buckwheat increased by 3.59 UAH. – from 47.26 UAH/kg to 50.85 UAH/kg. Today the price of buckwheat has risen by about 58 %!
Export. In common, export volume increased almost 4 times in Ukraine for last 10 years. As National Scientific Centre "Institute of Agrarian Economics" published, in 2021, Ukraine exported 50.8 million tons of grain and earned $ 12.3 billion. In 2021, 24.7 million tons of corn were exported, which is 12% less than in 2020, but six times more than in 2010.
The beginning of this year was very successful to corn export. January, February and part of March are exactly the period when the corn exports from Latin America is slowing down significantly. But the supply of grain by sea routes from Ukraine is impossible for two months already.
The war in Ukraine has already affected about 25% of the world cereal trade and has caused an increase in world prices, food inflation and reduced access to food in the countries importing food from Ukraine and Russia. In particular, those are wheat and sunflower oil. This was announced by the First Deputy Minister of Agrarian Policy Taras Vysotskyi. He said "All border countries responded to the problem of grain exports from Ukraine to third countries and either has significantly simplified the procedures for processing cargo transportation or are actively working on that. In particular, liberal conditions for Ukrainian carriers were implemented by Romania, Slovakia, Hungary, Lithuania, Latvia, Estonia, as well as Italy, Turkey, Bulgaria, Georgia, Denmark, Greece and recently Austria".
Sowing campaign. In spite of war, agrarians have sowed barley, pea and wheat in Ukraine. The sunflower is next. Today, farms have enough fuel and seeds. But there are difficulties anyway. The pernicious consequences of Russia’s aggression are already palpable for the world’s economy, but these consequences will actually be catastrophic in certain respects for several regions of the world. According to Antonio Guterres, UN Secretary-General, the war in Ukraine threatens hunger and poverty for 1.7 billion people worldwide, which is 20% of the world’s population.
By the way, the food market can and should work! Company “AGRO-SIMO-MASHBUD” stay in Ukraine and with Ukraine. We work for you. We produce high quality technological equipment to process grain into cereal, flakes, feedstuff and flour.
We finished last digest by words “We hope, all of us are looking forward so interesting year”. Now we hope the war will be over soon. In victory we trust! We wish you all peace!
