March 10, 2014


Ukraine's grain exports rise 36% despite unrest



Despite the current political unrest and the threat of invasion of the Crimea Peninsula by Russia, Ukraine's grain exports continued to exceed 2013's volume while meat production remains stable.


According to the Ukrainian agriculture ministry, from the beginning of the current marketing year on July 1 until March 7, Ukraine exported 24.939 million tonnes of grain, an increase of 35.99% from the corresponding period in the previous marketing year. To date, it exported nearly 15.12 million tonnes of corn, 2.15 million tonnes of barley and 7.44 million tonnes of wheat, of which 6.1 million tonnes was milling wheat.


The agriculture ministry said earlier that Ukraine's grain export in the July 2013-June 2014 marketing year is likely to rise to 32.5 million tonnes from about 23 million tonnes in the previous marketing year, due to a greater harvest this year.


Ukraine is the fifth-largest grain exporter worldwide, accounting for roughly 16% of global corn exports and 6.3% of wheat, according to the USDA. 


Ukraine sends 600 tonnes of wheat through its ports every week, two of the major ports being Sevastopol, in the Crimea, and Odessa, where pro-Russian rallies have occurred. Potential problems at Ukrainian ports or a delay in the spring planting season could affect exports.


Similarly, the meat industry has thus far continued production in a relatively untroubled manner, according to Anna Sergienko, marketing manager of Poultry Ukraine, the industry board, who also spoke on behalf of other meat sectors. "The crisis has not affected the market of meat," she said. "Consumption has not decreased, and there have been no problems with logistics."


According to the forecast by Poultry Ukraine, the poultry market will grow in 2014 by about 10%. The country's total poultry production in 2013 was 1.2 million tonnes. Data from Euromonitor shows that pork is the next largest category, with production of fresh pork reaching 591,700 tonnes in 2013, followed by beef (263,900 tonnes). The industry has a small lamb, mutton and goat sector which produced 19,600 tonnes in 2013.


The EU announced on March 5 that it would abolish import duties on most goods from Ukraine, including meat products, bringing Ukraine closer to a trade association deal with the EU. On the other hand, some analysts believe that the meat sector will need to continue to work with Russia. "It's clear that Russia is an important market for Ukraine," said Wojtek Boniaszczuk, an agribusiness analyst with the European Bank for Reconstruction & Development (EBRD). "Should production increase to levels that warrant export, Russia would be a significant partner."

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