Farming.in.ua

Late February 2004 witnessed a sharp raise in prices on the domestic market of sunflower seed. The upward trend seemed to persist in early March, though the pace of this process has significantly decelerated. The Ukrainian market's behavior just replicated the process of growing prices for sunflower seed on international markets.

Partly, it could be attributed to Ukrainian sunflower seed exporters' anticipation of the Government's positive move to repay the VAT-related debts. The bulk of Ukrainian sunflower seed exporters do not view the prices as having reached their ceiling, which is why they have stepped up purchasing sunflower seed. Replicating the exporters' behavior, Ukrainian sunflower seed processing businesses have had to raise their purchasing prices.

This is particularly applicable to large batches of sunflower seed, which recently were sold at up to 1,600 UAH per ton, EXW. The weather's vicissitudes have adversely influenced shipments of sunflower seed oil from Ukrainian seaports. As a result, export demand for sunflower seed oil remains rather high, which is reflected in the export prices' stability. This could not be said about the internal market, on which the lowest threshold of supply prices has somewhat risen.

On the market of sunflower seed cakes the peak of prices was reached somewhat earlier and the downward trend has become manifest. However, in view of many contracts having been concluded for immediate shipments, the exporters are not particularly interested in considering vernal purchases, moreover so that these will involve lower prices. So far, the domestic market has not reacted to lowering export prices for sunflower seed cakes.

As far as the internal market of food grain crops in concerned, the traders' pessimistic sentiment is becoming increasingly dominant. They are worried about whether prices for food grain crops will keep climbing up on the internal market and whether potential buyers will be able to purchase food grain crops in amounts big enough to warrant additional imports. The main point is weather shipments of flour from the State Reserve's stocks will adversely influence the traders.

True enough, the market is oversaturated because of massive imports of food wheat grain, which makes Ukrainian flour producers too choosy. In late February the pricing situation on the internal market of imported wheat remained stable, though apprehensions became more prominent that the Government may opt for regulating the market through administrative levers, in view of the presidential race looming on the horizon.

After marked price hikes on the internal market of fodder corn in last February a spell of price stabilization appears setting in, with prices having rather definitively differentiated, depending on the quality of fodder corn varieties and mixes. Demand has been particularly high for fodder corn, which contains 15 percent and 20 percent of grain mixes. Ukrainian exports are demonstrating signs of lull, though some traders tend to believe that prices for corn won't significantly rise, despite the recently registered growth in prices on the global market.

According to the State Statistics Committee, in January 2004 Ukrainian agricultural machinery manufacturers made 454 tractors, which was 18.5 percent down from the December 2003 figure. A total of 419 sowers was made, which was a 26.9 percent reduction versus last December. In 2004's first month 195,000 tons of mineral fertilizers was made in Ukraine, which was a 2.6 percent increase as compared with December 2003. As far as pesticides and other agricultural chemicals are concerned, manufacture of these totalled 257 tons, which was a 50.2 percent reduction versus December 2003.

Odesa region agricultural crop growers need 553 M. UAH for vernal sowing, part of which sum will be forthcoming from the national budget. This was that A. Novakovsky, chief of the Odesa Regional Administration's Main Agency for agriculture and food products, told hot telephone line callers. As he noted, the Odesa region's agricultural development programs provide for allocating over a million hryvnias to subsidize purchases of elite seed materials by regional agrarians. In particular, they will be entitled to subsidies to the tune of 50 UAH per ha of plowlands, sown with vernal food wheat grain.

As he further disclosed, at least 75 percent of winter crops in the Odesa region have weathered winter colds and are currently appraised as in good condition, despite latest temperature fluctuations.

In Sevastopol, South Crimea a 100,000 ton grain terminal has been built, ordered by the closed-type joint-stock company AVLITA, a private stevedore company, in which a Cyprus-based partner has an over 10 M. USD stake. The terminal consists of ten storages, each of 10,000 ton capacity. Its operation will involve stockpiling, storaging grain, meant for carriage by sea. In late January an early batch of 2,500 tons of grain reached the terminal.

According to the State Statistics Committee, as of February 1, 2004, Ukraine's herd of sheep and goats amounted to 1,864,600 head, which was 7.4 percent less than last year's figure for the same period. The Odesa region topped the list of biggest herds of sheep and goats (461,500 head) and was followed by Crimea (174,500 head) and the Donetsk region (145,400 head).

The Odesa region's herd remained unchanged since early 2003, the herds of sheep and goats regicide in Crimea (by 6.7 percent) and somewhat grew in the Donetsk region (by 0.2 percent). Most drastic reductions in the herds of sheep and goats were registered in the Kherson region (by 22.1 percent, to 50.700 head) and the Kharkiv region (by 17.7 percent, to 66,500 head).

As of February 1, 2004, Ukrainian farmers kept 13,365,900 head of poultry, which was 3.7 percent down from February 1, 2003. The Kyiv region topped the list of Ukrainian poultry keepers (11,820,700 head, which was 1.8 percent less than the year ago) and was followed by Dnipropetrovsk (10,326,700 head, a 1.1 percent increase), Donetsk (9.673,400 head, a 1.9 percent reduction), Zaporizhia (4,427,100 head, a 17.8 percent decrease) and Mykolaiv (2,377,900 head, a 17.3 percent reduction) regions. In seven regions of Ukraine (in particular, Cherkasy, Ivano-Frankivsk, Kharkiv) the number of poultry head somewhat increased (by 0.1 percent to 7.3 percent).

According to ProAgro estimates, in 2004 Ukrainian agricultural crop growers will harvest 9.4 million tons of barley, which will be 38 percent up from last year's yield. Around 1.25 M. tons of rye will be harvested versus last year's 0.65 M. tons. However, there will be a 23 percent reduction in yields of corn, which will likely be caused by shrinking lands under this grain crop and its diminishing productivity. Ukraine's aggregate yield of grain crops, peas and beans in 2003 amounted to 20.22 M. tons and was only 52 percent of what Ukraine harvested in 2002. Only 3.6 M. tons of wheat, 6.8 M. tons of barley, 0.6 M. tons of rye, 6.9 M. tons of corn, 0.9 M. tons of oats, 0.3 M. tons of millet, 0.3 M. tons of buckwheat was harvested last year because of extremely adverse weather conditions.

As Ukrainian agricultural experts contend, this year Ukraine will stage its comeback as a grain exporter on the global market. Last year Ukraine had to virtually withdraw from the international grain market as an exporter because of 2003's extremely poor harvest of grain crops, basically wheat. We hope to return to the export market this season and count on thrashing about 35 million tons of grain in 2004. This means that we will be able to resume sizeable shipments of grain abroad, First Deputy Minister for agrarian policies Mykola Bezuhly told a Reuters correspondent in Kyiv.

Last year's weather vicissitudes resulted in Ukraine's drastically reduced yields of major grain crops. A mere 20.2 million tons of grain crops was harvested in Ukraine in 2003, the lowest figure over the past 50 years. In 2002 Ukraine harvested 38.8 million tons of grain, though.

As traders and market analysts say, last year's poor harvest has affected this year's grain export prospects. So, a total of two million tons of grain may be exported from Ukraine, chiefly barley and corn. In 2002/2003 Ukraine exported 10.7 million tons of grain versus 9.1 million tons in 2001/2002. Though officials with the Ministry for agrarian policies are rather reticent in forecasting likely amounts of Ukraine's exports of grain this year, they say millions of tons may be exported. According to Mykola Bezuhly, Ukraine, traditionally viewed as a major exporter of fodder grain, will export food grain because the global grain market's conjuncture is likely to encourage supply as demand tends to grow.

As I believe, if Ukraine succeeds in harvesting good yields of food grain we will be able to meet part of the global market's growing demand, Mr Bezuhly said. Ukrainian grain traders pin big hopes on resumption of export shipments of grain. Thrashing 35 million tons of grain is quite a realistic goal to attain this year, Volodymyr Klymenko, director of the Ukrainian Grain Association, said.

If this figure is reached, he noted, Ukraine will be able to export around seven million tons of grain. As Mr Klymenko further noted, wheat and barley are likely to dominate exports of grain from Ukraine. As Marina Moiseyeva, an analyst with the company ProAgro, says, the company's forecasts state 2004's yield of grain in Ukraine around 30 million tons, which will be enough to restitute Ukraine's status as a grain exporting nation. Ukraine needs between 25 M. tons and 27 million tons of grain on the yearly basis, including grain for stockpiling reserves, and whatever grain is harvested in excess of that aount may be safely exported. As Ms Moiseyeva specified, Ukraine needs 12.5 million tons of wheat and 5.5 million tons of barley a year.

According to Ukrainian weathepeople, 88 percent of winter crops, which were sown last fall, are in a good state and promising nice yields of grain. As Tetiana Adamenko, chief of the national Hydrometeorological Center's agrarian meteorology division, commented on this fact, yields of winter grain crops this year will be between 12 million tons and 14 M. tons. According to Ms Adamenko, only up to 12 percent of the aggregate area under winter grain crops will have to be resown during vernal crop sowing. In fall 2003 around six million ha of arable lands in Ukraine were sown with winter grain crops.

In winter and spring 2003 over 50 percent of winter grain crops perished in Ukraine because of severe frosts and the vernal drought. According to the State Statistics Committee, in January 2004 Ukrainian farms of various proprietorial status realized 243,400 tons of meat and poultry meat, which was 3.6 percent less than in January 2003.

The Kharkiv region topped the list, having sold 16.300 tons of meat and poultry meat (-5.8 percent versus January 2003), and was followed by Cherkasy region (14,700 tons, 5.0 percent up from January 2003) and Kyiv region (14,000 tons, a 19.1 percent decrease). In January 2004 production of milk in Ukraine decreased by 6.6 percent to 613,200 tons, as compared with January 2003.

The Kyiv region was Ukraine's topmost milk producer (46,300 tons, 7.8 percent down from January 2003), and was followed by Khmelnytsky region (38,000 tons, 5.2 percent down from January 2003) and Vinnytsia region (36,500 tons, 2.4 percent less than in January 2003). Production of eggs decreased in January 2004 versus January 2003 by 3.7 percent to 745.9 M. eggs. The Kyiv region was Ukraine's topmost egg producer (95.7 M. eggs, 3.3 percent up from January 2003) and was followed by Donetsk region (85.8 M. eggs, -6.6 percent) and Dnipropetrovsk region (53,300 M. eggs, 10.6 percent up from January 2003).