January 31, 2023

Ukraine's corn and wheat production is set to fall for a second year

The Ukraine Grain Association (UGA) said the country's corn and wheat production is set to decline for a second year in 2023 due to the war, with corn output not expected to surpass 18 million tonnes and wheat output not anticipated to surpass 16 million tonnes, BusinessWorld reported.

Nikolay Gorbachov, head of the UGA, said these forecast totals were a best-case scenario, and output could decline further depending on weather and financial difficulties of farms.

Many farmers are producing grains at a loss as a result of the disruption to exports caused by Russia's invasion, he said. Farmers had reduced the area they had planted because it was no longer profitable for them to grow grain.

According to UGA estimates, Ukraine's overall grain and oilseed crop output may decrease to about 50 million tonnes in 2023 from roughly 67 million in 2022.

Gorbachov said Ukraine has so far been successful in exporting 30 million tonnes of grains and oilseeds during the 2022/23 season using alternative routes via European Union nations and the Black Sea grain corridor that it had negotiated with Russia.

He said that delays in the Black Sea corridor and less effective logistics on alternate routes were driving up costs that had an impact on farmgate prices.

He also aid because corn is relatively expensive to grow, dry, and ship, it has been particularly impacted by financial constraints, adding that 10% of the 2022 crop was still unharvested as farmers waited for some fields to dry out.

Ukraine's Agriculture Minister said the country's corn output could decrease from 41.9 million tonnes in 2021 to 22 million to 23 million tonnes in 2022. The amount of wheat produced last year was only around 20 million tonnes, based on estimates.

-      BusinessWorld