Ukrainian Agribusiness Club together with UCABevent agency organized the next webinar for foreign partners on April 28, during which speakers shared their thoughts about spring planting progress, harvest 2022 forecast, export of grains and other ag products.
- Roman Slaston, CEO of UCAB
- Kateryna Rybachenko, CEO of Agro-Region Ukraine
- Dmytro Los, Chairman of the Board of UBTA
We offer to get acquainted with the main messages of the event:
Ukraine has already some kind of assessment of spring planting areas which we will be able to plant this year taking into account that we have a very big share of Ukraine under occupation, and especially in the south and east, and also we regained control of the Chernihiv and Sumy regions. But still there is the damage to agricultural companies which operate in those regions with a loss of some part of machinery, tractors and storages, also not enough employees workers to perform seeding campaign, financial issues. Because of that, Ukraine is going to plant around 14 mln ha (75%) of spring crops area in 2022. Biggest loss in South, East and North-East. In many regions, more than 50% of the territories were affected by active hostilities.
Financing and diesel fuel are crucial to fulfill planting plans. Ukrainian farmers have a big gap between what we need and what we get from from banks at the moment. The problem which was imposed months ago by the government is mostly active in terms of crediting from the state owned banks, private banks, not all of them, but in most cases they are not so active with providing finance to farmers and also the issue with international banks. limits from the headquarters of those banks are very tight for Ukraine from commercial point of view, because of the risks, but still will be glad to see more commitment from the point of viewer to support farmers.
We also made an estimation and forecast so what would be the total areas planting of different crops and we took four main the biggest spring crops here in Ukraine spring barley, maize, sunflower and soybeans. And we also made survey among our members and based on the results we see that many companies they reduce in the structural sowings maize and switch those areas to sunflower soybeans or cereals like spring barley or wheat or buckwheat or other other cereals.
Occupation of South and East results in bigger lost for sunflower, barley, pea, mustard, tomato, onions, other vegetables. The loss of areas under sunflower is big. It's 29% compared to the year before. The biggest win is for soybeans, definitely soybeans is in the favor. First thing that's because of the lower inputs need per hectare, so you need too much less fertilizer for this crop. Another issue that you basically can take stock to have commercial grain or soybeans and clean it a bit better apply fungicide insecticide and get the seed. You can't do that with sunflower for example, which is supplied from international companies or produced here in Ukraine by international companies in cooperation with farmers. And the third reason is the availability to or easiness to explore this group in the Western EU. It is easier to put soybean through this narrow logistics, which we have right now.
We have almost finished phase “one” - seeding early spring crops — barley, wheat, oat, pea, sugar beet, rapeseed. Now actively seeding sunflower, maize (corn), potato with later coming soybeans, buckwheat. On 25th of April we found 3.6 million hectares of spring crops already planted. That is 21% compared to what we got compared to 2021.
Export remains one of the main problems for farmers. One of the ways of export is exporting to the western border of Ukraine and the biggest areas goes to the railway. So we have a very limited possibility to export not only due to lack of practice which is able to export to do international transportation but also of course we have a very high cost of transportation which is over much over $100 per tonne at the moment we transport grains from Ukraine to the Baltic Sea. With the railway we still have really big problems. And we can't reach the theoretical maximum capacity of 1.1 million tonnes per month of grains and 250,000 metric tons per month of sunflower oil. With such opportunities, Ukraine will not be able to export a new harvest.
So Kateryna Rybachenko stressed: “Export is a huge challenge because of blocated of ports and without unblocking those ports, there is going to be a big problem with the next harvest. Smaller farms made a decision not to do this sowing campaign, to good they still have a harvest on the previous year. That is also sort of a reaction on what is happening. Without unblocking ports we don't know how we're gonna do the planting of 2023.
In March we managed to export only 200,000 metric tons of grain, which is 4% of normal. we hope that export volumes will increase. Sometimes we're a big critics of railway. Now we are the biggest fans. Those guys are doing an incredible job.
We really need to unblock Black Sea and that will be the solution for Ukraine. Otherwise the next year is not going to happen the next sowing season of 2023, because without sales farmers would not have money to continue doing the work.”
Roman Slaston spoked about the latest important event for Ukrainian export: “Very generous decision from the European Commission to cancel input tariffs for all products from Ukraine for agricultural products as well import tariffs, quotas, import duty suspension. The EU is also already taking measures on the ground to facilitate overland goods transport to help to get Ukrainian products out into the world. It sounds very good for Ukraine and it really gives the belief that respectable farmers not only in the grain business but companies that produce apples or berries who are also in tough conditions now, will be able to improve their export”.
Finally Dmytro Los added: “This is not only about the European Union, but also about the abolition of export quotas for Ukraine in United Kingdom. And these opportunities are outstanding. It is a unique possibility for Ukraine to become a member of a large European family and a member of a large United Kingdom family. The decision politically has been made, but there are still two technical procedures left to adopt them here. We were reassured that this procedure does not take a lot of time, it means that hopefully till the end of May everything will be working. What does it mean for Ukrainian producers? That it is an urgent call to those who want to export to the European Union as well still not registered there to do it as soon as possible”.