Losses of the Ukrainian grain and oilseed sector could exceed 3.2 billion dollars in 2023 due to the high cost of logistics, as well as price increases for fuel and fertilizers, which threaten to reduce the sown areas next year and beyond , farmer unions said on Thursday.
Ukraine, in order to be one of the leading global food producers and exporters, is first and foremost responsible for shipping most of its exports through deep-water ports on the Black Sea, which have been fully or partially blocked. since February 2022.
Yet limited export opportunities, now centered on the small ports on the Danube River and the railway to Eastern Europe, have multiplied the logistical component and consequently reduced the price that traders can offer farmers. Port closures also led to a sharp increase in the price of imported fuel, seeds, fertilizers and spare parts for agricultural machinery.
The Agrarian Council, Ukraine's largest agribusiness group, said the cost of wheat production in 2023 was about $146 per metric ton, with an average selling price of $102. Farmers spend $149 to grow corn and can sell it for $94.
Financial and climate challenges shake Ukraine's agricultural sector in 2023
The council said that by 2023, even the production of sunflower and rapeseed would not be profitable and only soy would give farmers some profit. Producers said that the large losses have already led to a reduction in plantings for the 2024 harvest.
“We planned to sow 2,000 hectares of winter wheat. However, we only sowed 1,000 hectares,” said Ruslan Holub. He is director of the “Tak” farm, which covers more than 10,000 hectares in central and southern Ukraine.
“Farmers will make decisions about planting area based on their financial capacity,” said Oleh Khomenko. He is the director of the Ukrainian Agribusiness Club, a trade association.
Farmers' unions have not forecast the area for the 2024 wheat harvest. Ukraine's Ministry of Agriculture maintains its wheat sowing forecast at around 4.4 million hectares.
Not only financial difficulties, but also unfavorable weather can significantly reduce the sowing area this autumn. Ukraine is a traditional producer of winter wheat, barley and rapeseed.
This week, state meteorologists warned that a prolonged lack of rain has negatively affected ongoing winter crops. It also harmed plants already sown in several regions of Ukraine.
Farmers had sown 3.02 million hectares of winter wheat by October 16, 2023. This compared to 2.5 million hectares on the same date last year, according to data from the Ministry of Agriculture.
Source: Pavel Polityuk | Notícias Agrícolas
