Ukraine develops into major grain competitor

Nikolay Gorbachov, president of the Ukrainian Grain Association, is forecasting a bumper crop in 2021-22. | Reuters photo

Ukraine will be a fierce competitor in grain markets this year and for years to come, according to a senior agriculture official from that country.

Nikolay Gorbachov, president of the Ukrainian Grain Association, is forecasting a bumper crop in 2021-22.

The association’s official estimate calls for 97.3 million tonnes of grains, oilseeds and pulses.

But after a recent road trip from Odessa to Kiev, he believes the harvest will be more than 100 million tonnes, topping the previous record of 98.3 million tonnes set in 2019-20.

“What I can tell you about Ukraine is the conditions are just perfect,” Gorbachov told delegates attending the International Grains Council’s Grains Conference 2021, adding that abundant rain reminds him of Scotland.

“All the fields are green,” he said.

Gorbachov believes farmers will produce more than 30 million tonnes of wheat. The current record is 28 million tonnes.

“A group of traders think the wheat crop could be up to 35 million tonnes,” said Gorbachov. “In that case we can export 25 to 27 million tonnes.”

For now, the association is sticking with its forecast of 21 million tonnes of wheat exports because there are still a few weeks before harvest and a lot can happen between now and then.

Crop quality could be compromised due to persistent rain. Excess moisture could cause fungus problems but for the moment the crop looks fantastic.

Ukraine’s wheat crop is typically 70 to 80 percent milling wheat quality but the proportion may be lower this year. There is a risk that farmers may not achieve that 12.5 or 13 percent protein level due to the lack of sunshine.

Gorbachov also anticipates record corn and barley crops. However, he noted that analysts were forecasting 35 million tonnes of corn at this time last year but it shriveled to 30 million tonnes because the weather turned hot.

He is forecasting 37 million tonnes of corn but it could climb as high as 40 million, resulting in a 34- to 35-million-tonne export program.

He expects growers to produce 2.5 million tonnes of canola, about the same as last year.

Ukraine crushes about 250,000 tonnes a year and exports the rest.

Sunflower production is forecast at 16.56 million tonnes, a 28 percent increase over last year. Ukraine will crush 16.3 million tonnes of that crop and export the oil.

Ukraine’s grains, oilseeds and pulses production has steadily risen to an estimated 100 million tonnes in 2021-22, up from 9.5 million tonnes 20 years ago.

The Ukrainian Grain Association is forecasting 97.3 million tonnes of grains, oilseeds and pulses production in 2021. But the president of the association thinks it could easily top 100 million tonnes, setting a new record for the country due to persistent and plentiful rains. He is forecasting up to 35 million tonnes of wheat production and 27 million tonnes of wheat exports. | Source: Ukrainian Grain Association

And the forecast is for continued growth. The Ukrainian Grains Association estimates production will reach 113 million tonnes by 2026.

That forecast is based primarily on improved yields due to increased irrigation. Ukraine has 25 percent of the world’s most fertile black soil and there are many lakes and rivers.

The most productive region Ukraine has shifted from the centre of the country to the north and west, with western Ukraine offering the best potential return on investment.

A crop of 113 million tonnes would result in 79 million tonnes of exports.

Gorbachov said there used to be legitimate concerns about Ukraine’s ability to move that much grain to overseas markets but the logistical issues have been addressed.

Ukraine has 28,000 rail hopper cars, up from 10,000 three years ago.

“We have no more deficit of these hoppers and we can move grain easily to the ports,” he said.

“Now we can load without any problem 70 to 80 million tonnes of grain per year.”

An estimated 65 percent of Ukraine’s grain destined for export markets moves to port position by rail, another 25 percent by truck and 10 percent by river.

He anticipates the amount moving by river will increase due to new federal legislation that comes into effect on Jan. 1, 2022, that will make it more economical to ship grain that way.

Ukraine has about a dozen ports but Mykolaiv, Chornomorsk, Pivdenniy and Odessa account for 93 percent of total grain exports. New grain export terminals have been built at the ports and there are more to come.

China accounted for 25 percent of Ukraine’s grain exports last year. The other key markets are the European Union, the Middle East and North Africa.


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