Tendencies of Ukrainian agrarian market in July 2019.

Agroliga Group brings together a number of dynamically developing medium-sized companies that operate in the agriculture sector of Ukraine



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Traditionally, representing to your attention a brief overview of the world and Ukrainian agrarian sector news.

This year a record cereal harvest is expected in Ukraine. However, due to problems with logistics, agrarians predict a traffic collapse in the south of the country and significant problems with the export of harvested grain. In addition to the existing problems, “Ukrzaliznytsia” will increase the cost of transportation of seed oil by rail by 20% for those who do not have specialized tanks. “This is an internal order of the management of “Ukrzaliznytsia”, in which new requirements for transportation in tanks are prescribed. In particular, tanks should receive the specialization of the “food wagon,” says mind.ua. All this will lead to a significant increase in logistics costs for Ukrainian farmers. For comparison: in the EU, these costs are about 12%, in the US – 9%, in Ukraine they will soon exceed 30%.

The Cabinet of Ministers of Ukraine approved the requirements for the banks participating in the joint project of financing the AIC with the European Investment Bank, reports the Ministry of Finance of Ukraine press service. The total cost of the project is € 800 million. The project provides funding from the EIB in the amount of € 400 million and co-financing from other sources.

Experts from the US Department of Agriculture (USDA) lowered the forecast for wheat production in 2019/20 MY by 1 million tons compared with the June forecast. Analysts say that the forecast for wheat production has decreased for Ukraine and the EU as a whole because of the heat and lack of precipitation. Despite the projected decline in yield, it will still be higher than last season. The same experts predict world production of oilseeds in 2019/20 MY is projected at 586 million tons, which is 11.7 million tons (1.98%) lower compared with the June forecast (597.8 million tons).

In Ukraine, corn prices of the new crop are gradually increasing after US quotes recovered to the level of $ 172-174 per ton for December deliveries, Grain Trade reports. Experts note that due to the fact that the weather in Ukraine contributes to the development of corn crops, the forecast yield in the range of 33-34 million tons may become a reality.

Analysts say that Ukraine enters the new season with lower prices for cereals than last year. However, experts expect their growth in the future, writes AgroPolit.com. “The expected higher yield of wheat in 2019/20 MY should compensate for lower prices at the start of harvesting. Wheat of Ukrainian origin is still the cheapest in its segment, which contributes to its competitiveness in the global market. The prices of our competitors are also lower than last year, thanks to the expectations of a high yield once in the Black Sea region”, – explained Agritel analyst Alexei Eremin.

The agricultural holding LNZ Group will create the first Ukrainian agricultural online store LNZ web from the official distributor of LNZ-MARKET. The purpose of creating such platform is to provide an opportunity for medium and small businesses to receive products of internationally recognized brands at the same price as for large agribusinesses without intermediaries.

Because of the moratorium, Ukrainian agricultural land fell in price by a quarter. In Ukraine, agricultural land prices are at the bottom of expert estimates of its value in the event of a market opening, and in 2019 they fell just below this limit. Thus, according to experts, subject to the lifting of the moratorium, the price per hectare of land may be 1.48-6.03 thousand USD or 38.9-158.9 thousand UAH. According to the report, the fact that now the price of land is lower than expected, means that if the moratorium is lifted, a sharp increase in the price of land will not occur. Most likely, prices will gradually increase and eventually will fall within the limits of expert assessments.

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