So heard attendees at a key meeting yesterday in Prague organized by EU sustainable soy promoting organization, Donau Soja, in collaboration with Ukraine’s agriculture and economy ministries and the Karlova Burza congress team.
Jiří Šír, deputy minister of agriculture, Czech Republic, opened the event, which was aimed at finding ways to expedite agricultural exports from the conflict hit country.
Ukraine has consistently been in the top five grain and oilseed exporting countries in recent years, with 90% of its agricultural exports shipped out through the ports of Odesa and Mykolaiv. Those two ports have been closed for well over a month now due to the Russian invasion.
In February, 150,000 tons of grain and oilseed products along with by-products were exported by rail, with those volumes increasing to 300,000 tons in March, according to the Ukrainian ag ministry.
While Kyiv continues to look for alternative routes by land, that effort has been hampered by logistical challenges and red tape.
Taras Vysotskyi, first deputy minister in Ukraine agriculture ministry, told delegates the objective of the meeting was to try, through a collaborative effort involving governments, private companies, and other stakeholders, to find solutions to such export constraints.
“From our side, we have updated our internal policies to allow the export of agricultural commodities. I want to confirm that, so far, there are no limits on and no plans to impose any limits on the export of barley, corn, rapeseed, soybeans, sunflower seeds, sunflower oil, and other products. We are allowing the export of wheat through a license. The license is free of charge, it is just to organize the process.
“Ukrainian farmers are really dedicated, they are continuing with the sowing campaign despite all the challenges. Around 2 million hectares of planted area have been sown so far.”
The ministry expects that about 70% of the total planted areas will be sown with crops in Ukraine this year.
Logistic hurdles
Polish and Romanian government spokespersons at the event summarized the work those countries have done to date to facilitate greater cross-border transport of crops from Ukraine, while Vitaly Kushnir, commercial director of one of the leading Ukrainian agriculture companies, ATK Group, spoke about the existing challenges related to export logistics.
Ukraine can export more grains and oilseeds, he said, but it needs EU countries to step up and accelerate the delivery of additional wagons and river barges to facilitate cross-border transit. “Our country is efficient in relation to internal logistics, but we need more support from our EU partners. We are willing to work 24/7, but we are struggling due to lack of equipment, we need more wagons, barges, grain and oil trucks,” said Kushnir.
A Reuters story last week noted that the Ukrainian railway network uses a Russian gauge measuring roughly 1.5 meters, or some 10 centimeters more than the tracks used in most of Europe, so railway staff have to lift wagons with a jack and manually change the chassis to fit the Polish tracks. Alternatively, they can unload the grains from the Ukrainian wagons and pour them into the Polish ones - a process that can take up to 30 minutes per wagon.
Ukraine currently has two export port terminals that are still functioning, Izmail and Reni, both located on the Danube River, but their capacity is very limited, compared with that of Odessa.
The focus now is trying to enable a large increase in rail shipments, said UkrAgroConsult director general, Sergey Feofilov, during a webinar last week. But other ports being considered in relation to export bulk shipments of Ukrainian grain are Gdansk in Poland and Constanta in Romania, he said.
Likely export figures
UkrAgroConsult, as part of that webinar, provided estimates for crop production in Ukraine, cautioning that the figures could change, given the ongoing volatility in ag markets.
Ukrainian wheat production for MY 2022/23 is likely to reach 19.8m Mt, with exports projected at between 14m and 16m Mt, primarily due to the unprecedentedly large ending stocks of the 2021/22 season, said the agency.
Forecasting Ukrainian corn production right now is more challenging, it said, given that a significant percentage of the corn area falls in regions with active hostilities and because corn requires significant inputs compared to other crops. Moreover, Ukraine farmers may receive lower prices for their corn relative to other grains, and this reduced revenue might influence their decision and encourage them to switch to cereals, said Feofilov.
The consultancy forecasts that the country’s corn output for MY 2022/23 could reach between 19m and 24m Mt, with export potential being somewhere between 19m and 26m Mt due to high carryover stocks.
The sunflower area could decrease considerably, and yields will be low because of deficit of some inputs. “Our forecast is for 10-12m Mt for the harvest of 2022," said Feofilov.
He does not expect Ukraine’s soybean area to shrink significantly, as almost all soy fields are located in areas of low risk in relation to the conflict. The forecast is for 2.9m Mt for the harvest of 2022 compared to 3.5m Mt last year.
UkrAgroConsult predicts the same tonnage for the rapeseed harvest. Record large winter rapeseed areas for the 2022 crop were sown in the autumn 2021, it added.
About 98% of rapeseed areas in Ukraine are winter varieties. Rapeseed plantings are in good condition, after wintering with minimal losses, said the consultancy. The harvested area might decrease though as around 300k hectares are located in high risk regions in terms of the conflict.
