Ukraine’s grain sales have soared in the 2024-25 (July to June) marketing year, despite Russian strikes at Black Sea ports.
According to the data of the Agriculture Ministry, Ukraine exported 13 million tons worth of grain during this period, as opposed to the 8.3 million tonnes it exported at the same time last year.
Total wheat production was 7.2 millions tons, corn was 3.8 million tonnes, and barley 1.7 million tonnes.
Although exports in Ukraine have increased dramatically over the past few months, they continue to be challenged by dry weather that has caused crop failures, and Russian attacks on their ports.
UK warns that Russian strikes could cause a delay in supplies
On Tuesday, UK Prime Minister Keir starmer said that Russian attacks on Black Sea port in Ukraine is delaying grain deliveries to the Global South.
BBC reported that Russian drones attacked at least four cargo vessels in early October. One of them was carrying 6,000 tonnes of corn.
Starmer stated in a press release that “Russia’s indiscriminate attacks on Black Sea ports underscore (Russian president Vladimir) Putin’s willingness to gamble with the global food security to try to force Ukraine to submit.”
Ukraine exported approximately 6,000,000 tons of grain per month via the Black Sea before Russia invaded in 2022. Grain exports are still a major source of income for Ukraine despite the conflict.
The dry weather in Ukraine affects Ukraine’s agriculture
The dry weather in Ukraine negatively affected the harvesting and production of key grains in 2024-25.
It is expected that the country will produce 25 million tons, a decrease of 7.5 millions tons from last season. The wheat production is expected to drop by 600,000 tonnes, totaling 22,4 million tons in 2024-25.
According to S&P Global Commodity Insights, the exports of corn and wheat are both expected to decrease. Corn exports will drop by 25,4%, to 22 million tonnes.
In order to maintain an adequate supply of wheat, the Ukrainian Government has set a cap on exports at 16,2 million tons per year for 2024-25.
Demand for goods and services is booming, as are exports
The Ukrainian exports are still strong despite the Russian strikes. Spain is the leading destination for Ukrainian wheat. It imported 1.6 million tonnes this season.
A S&P Global Report states that Indonesia imports 944,000 tons and Vietnam imports 478,00 tons. Egypt, Algeria and Bangladesh also actively source wheat from Russia or Ukraine.
Also, Russia announced recently that it will sell wheat directly to buyers in state-owned companies without intermediaries. This could increase the demand for Ukrainian grain on the global market.
As the harvest season (October to September) begins, Spain will likely be the top importer of Ukrainian corn.
Ukrainian corn could lose to US and Brazil
According to reports, European nations including Spain, Portugal Italy and the Netherlands have shown interest in Ukrainian Corn. S&P Global reported that these countries have shown a competitive interest in buying Ukrainian corn, since maritime trade is cheaper than rail transport.
The higher prices of Ukrainian corn on the European Union market have reduced its competitiveness compared to Brazil or the US.
China is another important destination for Ukrainian corn, but Ukraine has lost ground to Brazil and US due to the limited supply. China also decided to reduce corn imports in order to boost domestic prices and production.
Turkey is a major destination for Ukrainian corn
According to S&P Global, the buying interest in Turkey reached $239 per tonne during the second half of October for an one-month contract.
According to S&P Global, the buying interest in Turkey has reached $239 per tonne for one-month deliveries contracts during second week of October.
The Turkish government has recently reduced the duty on corn imports to 5%, from 130%. This applies to up to one million tons of corn until 2024. Buyers are now seeking spot deliveries.
S&P Global reported that this has resulted in a decrease in the domestic price of Turkish corn. This makes Turkish corn more attractive and reduces demand for Ukrainian corn.
CIF (Certificado de Identificacion Fiscal), offers for forward deliveries of corn to Spain’s Mediterranean Region were $250 per ton during the first weeks of October. Buying interest was in the range between $230 and $250.
According to S&P Global, as of October 21, the bids received from the buyers were in the low $230s.
This post Analysis: Ukraine’s grain exports thrive in spite of Russian strikes on Black Sea could be updated as new developments unfold.
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