Ukrainian grain export expansion plans suffer setback

Ukraine’s rapidly increasing pace of exports has suffered a knock this marketing year, with government data showing a slowdown in demand for its bulk agricultural commodities.

Ukrainian exporters have sold 53.4 million mt of agricultural products since the start of the year worth $14.7 billion, the Ministry of Agrarian Policy and Food said Tuesday, including 15.57 million mt of corn, 14.22 million mt of wheat, and 4.62 million mt of barley.

While an impressive return since January, when compared to numbers from the State Statistics Service, the pace of exports has stalled in the face of increased competition from around the world.

Corn sales for 2017 are 26% higher than in 2016, but exports since the start of July are down 12% on the 2016/17 marketing year.

It is still early days, with most corn sales typically coming later in the year, but volumes of 1.76 million mt are by far the lowest seen since UkrStat started publishing figures in 2012.

Wheat sales are down in both calendar and marketing year terms.

Since July 1, wheat sales stand at 8.19 million mt – 6% lower than at the same stage last year.

However, Ukraine’s wheat sales seem to be building up a head of steam.

October’s sales volumes are the biggest monthly total seen in the last seven years, while total exports for the 2017/18 marketing year to October are only surpassed by last year’s record-breaking exports.

Although wheat looks to be in better shape than corn, it faces stiff competition from neighbouring Russia, which has produced its biggest-ever harvest this year.

This competition looks only set to intensify as a new crop from Argentina and Australia comes to market from January.

By historic standards, this year’s barley crop is unremarkable. Up 10% in sales volumes on year, the marketing year is down 3% on 2016/17, despite significant interest in barley around the world as tight supply has pushed prices up.

As Ukraine has boosted export sales by $2.7 billion over the course of the last 10 months, the Ministry’s decision to focus on sales of value-added processed goods in its statement is telling.

While the three grain products accounted for 64% of the volume of Ukraine’s agricultural exports over the course of 2017, they represent just 20% of the total $14.7 billion paid since January.