It is necessary to take into account different scenarios of agricultural sector development and be ready to adapt to them - Agro Marketing Agency

Due to the war and its consequences, Ukrainian farmers harvested 40% less wheat, 42% less barley and 33% less corn this year. The total grain harvest was 53.6 million tonnes, down 38% year-on-year.

The situation with oilseeds is no better. In particular, the sunflower harvest is 36% lower, while rapeseed is 3% higher and soybeans are 2% higher. In total, the harvest of oilseeds was down by 25% compared to 2021.

However, it is worth remembering that next year we may have an even smaller harvest of grains and oilseeds. This is due to the delay in sowing winter crops, problems with material resources, fuel, fertilisers, etc. Given the price hike, many farmers have simply refused to buy fertilisers, as the same nitrate currently costs UAH 36-40 thousand per tonne. In addition, farmers located in the temporarily occupied or recently liberated territories have not started working at all.

As for exports. In 2021, Ukraine sold almost $28 billion worth of agricultural products to foreign markets. At the same time, in 2021/22 MY (July-June), 61.52 million tonnes of grains and oilseeds were exported with an estimated value of $22.2 billion. For comparison, exports of metal and ore then amounted to about $21.1 billion. That is, before the full-scale war, these two categories were the main contributors to the country's foreign exchange earnings. Currently, the country relies only on the agricultural market.

Of course, the grain corridor helps us to export agricultural products, including the export of last year's harvest, which we still have enough of. The grain from the new harvest is stored in hoses and granaries and then processed. Of course, this is not very convenient, but we have to adapt to the conditions of war.

It is quite interesting that Spain and Turkey are currently the leading importers of Ukrainian grain. China ranks fourth in the overall structure. However, everyone understands that Spain is essentially a "transshipment point" - the grain goes on to other countries. It is also not new that Turkey buys Ukrainian wheat, processes it into flour and supplies the finished product to other countries. It is not for nothing that Ankara is the world's leading flour exporter. Therefore, Ukraine may face some difficulties with milling wheat varieties. After all, the quality of grain is declining year on year, and only about 30% of wheat in grades 2-3 is suitable for flour production. Instead, Ukraine exports a lot of milling wheat. Therefore, our flour millers and bakers will once again have to figure out how to make products of more or less the right quality. There may also be some minor problems with rye, which is also sown less and less every year. We all remember when rye and rye flour were imported from Belarus.

But the biggest problem is that through the grain corridor we trade grain at a very large discount. For example, second-class wheat costs 6.5 thousand UAH/t, while feed wheat on CPT terms with VAT costs 5.3 thousand UAH/t. Prices for other crops have also fallen. The situation is the same in European ports. Thus, Ukrainian grain will now find