UGA increased the crop forecast in 2023 by 1 MMT – up to 69 MMT of grains and oilseeds

The Ukrainian Grain Association has updated its estimate of the potential harvest in 2023, increasing it by 1 MMT to 69 MMT of grains and oilseeds. In 2022, the harvest reached 73.8 MMT of grains and oilseeds.

It is worth reminding that the smaller volume of the future harvest compared to previous seasons is due to the occupation of part of the territory of Ukraine, mining, hostilities, and lack of funds and other resources for farmers to carry out a full sowing campaign and grow crops. According to the UGA, a total of about 19.7 million hectares have been sown, compared to an average of 25 million hectares in previous years. Of course, much depends on further weather conditions, which have been favorable for grains and oilseeds so far.

Under these conditions, Ukraine’s exports in the new season 2023/2024 may reach 44.8 MMT. Last season (ended June 30, 2023), the exports reached 58 MMT.

In general, grains and oilseeds exports in 2023/2024 MY can be expected to reach the mentioned level if Ukrainian Black Sea ports continue operating and alternative routes, particularly the Danube route, are actively developed. The world has already seen that exporting grain through Ukrainian ports and ensuring the safety of navigation in the Black Sea is the only way to quickly and efficiently supply Ukrainian grain to countries that desperately need it.

Therefore, Ukraine is considering Plan B and plans to continue grain exports from Black Sea ports without a “grain deal” and actively develop the Danube route. The UGA is actively cooperating with the European Commission and the Ministry of Infrastructure of Ukraine to increase the capacity of grain transshipment for export, in particular, on the Danube Route.

As the UGA President recently noted at the UGA Grain Club, Plan B refers to both the Danube ports and additional financial instruments that will allow insuring vessels for those companies whose vessels will visit the ports of Greater Odesa and transport grain without a “grain deal”. The development of the Danube Route through the creation of anchorage for transshipment in Romanian territorial waters for barges with Ukrainian grain from Danube ports, optimization of ship calls through the Bystryi Estuary and the Sulina Channel will increase grain transshipment in Danube ports from 2 to 4 MMT, which will increase the volume of export transshipment by 20 MMT per year.

The forecast of the wheat harvest in 2023 remained unchanged at 17.9 MMT (20.2 MMT in 2022 and a record 33 MMT in 2021). We remind that such a harvest is more than enough to meet domestic demand and food security of the country, but will reduce the export potential to ensure food security in the world. Given the lower harvest, wheat exports in 2023/2024 MY may amount to about 15 MMT.

The forecast of barley harvest in 2023 also remained unchanged – 4.4 MMT (in 2021 – 10.1 MMT, and in 2022 – 5.8 MMT), and exports in 2023/2024 MY can be expected at 2 MMT. Expectations for the corn harvest in the new season increased slightly from 23.3 to 24.2 MMT (in 2021 – 37.6 MMT, in 2022 – 27.3 MMT), while exports may amount to about 20 MMT.

In 2023, the sunflower harvest is expected to reach 12.7 MMT (in 2021 – 16.9 MMT, in 2022 – 11.1 MMT), while exports may reach 1.1 MMT. Sunflower crush for oil may reach 11.5 MMT.

Rapeseed harvest in 2023 is estimated at 3.8 MMT, while exports in 2023/2024 MY are expected at 3.5 MMT. The soybean harvest is expected to reach almost 4.4 MMT, and exports in 2023/2024 MY – 3 MMT.

We remind you that any further decrease in the harvest and exports of grain from Ukraine will have a negative impact on the availability of grain on the world market and will lead to higher prices and, accordingly, to an increase in food inflation in the world.

Tags: food security, exports, Ukrainian Grain Association, harvest, UGA, sunflower, transshipment, barley, Black Sea ports, estimate, demand, soybean, план Б, Grains, alternative routes, oilseeds, Danube route, rapeseed, Bystryi Estuary, Ukraine, forecast, Sulina Channel, weather conditions