UGA Increased the Crop Forecast in 2023 by Almost 8 MMT to 76.8 MMT of Grains and Oilseeds

The Ukrainian Grain Association has updated its estimate of the potential harvest in 2023, increasing it by 7.8 mln tonnes to 76.8 mln tonnes of grains and oilseeds. In 2022, the UGA estimated the harvest to reach 73.8 mln tons of grains and oilseeds.

The increase in the forecast for this year’s crop is due to favorable weather conditions and better crop yields than expected, although the planted area is 2.2 million hectares less than last year.

Under these conditions, exports from Ukraine in the new season 2023/2024 could potentially amount to almost 48 million tons. Last season (which ended on June 30, 2023), according to the UGA, exports reached 58 mln tonnes.

The UGA emphasizes that in general, exports of grains and oilseeds in the new 2023/2024 MY can be expected at the mentioned level if Ukraine is able to export through its Black Sea ports, as well as if the logistics of alternative routes, including the Danube route, are improved and cheaper. 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.

However, with russia blocking shipping in the Black Sea and attacking port infrastructure, it is crucial to make alternative export routes close to the cost of logistics by sea. UGA appealed to the European Commission to introduce compensation to European carriers for the transportation of Ukrainian grain from the border to European ports. This will allow Ukrainian producers to retain the margin they are currently forced to spend on much more expensive logistics. The idea of the UGA was actively supported by the European Association COCERAL, which also addressed the European Commission with a letter of support for the UGA proposal.

Also, as recently noted by the President of the UGA Mykola Gorbachov, Romania has confirmed the creation of anchorages in its territorial waters for the transshipment of Ukrainian grain from barges to larger vessels such as Handysize and Panamax, which will make logistics across the Danube more efficient.

The estimate of the wheat harvest in 2023 improved from 17.9 to 20.2 mln tonnes (20.2 mln tonnes in 2022 and a record 33 mln tonnes in 2021). Potential wheat exports in 2023/2024 MY may amount to about 15 mln tonnes, taking into account that at the beginning of the season the carry-over stocks amounted to 4.3 mln tonnes.

The forecast of the barley harvest in 2023 also increased – from 4.4 to 5.2 mln tonnes (in 2021 – 10.1 mln tonnes, and in 2022 – 5.8 mln tonnes), and potential exports in 2023/2024 MY can be expected at 2.6 mln tonnes. Expectations for the corn crop in the new season improved from 24.2 to 26.9 mln tonnes (in 2021 – 37.6 mln tonnes, in 2022 – 27.3 mln tonnes), while exports may amount to about 22 mln tonnes.

The sunflower crop in 2023 is also expected to be higher – the estimate increased from 12.7 to 13.9 mln tonnes (in 2021 – 16.9 mln tonnes, in 2022 – 11.1 mln tonnes), and potential exports could reach 1.1 mln tonnes. Sunflower processing for oil may reach 12.5 mln tons.

Rapeseed crop in 2023 is estimated at 3.9 mln tonnes, while exports in 2023/2024 MY are expected at 3.7 mln tonnes. The soybean harvest is also expected higher – the estimate increased from 4.4 to 4.8 mln tonnes, and the potential exports in 2023/2024 MY may reach 3.3 mln tonnes.

We would like to remind you that further obstacles to grain exports from Ukraine will have a negative impact on the availability of grain on the world market and will lead to higher prices and, consequently, to higher food inflation in the world. Moreover, if Ukrainian farmers are unable to export their products, they may reorient their production and abandon growing grain, which will further deepen the crisis on the global food market in the midterm.

Tags: Black Sea ports, exports, Danube, harvest, estimate, Grains, oilseeds, yields, crop, planted area, Ukrainian Grain Association, Ukraine, UGA, weather conditions