Tendencies of Ukrainian agrarian market in March 2020.

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.

No doubts that in March two main news prevailed – the COVID-19 pandemic and a sharp significant drop in oil prices. In fact, all other news are only derivatives from the above.

In mid-March in USA a sharp fall in prices for agricultural products was recorded against the background of the ongoing epidemiological and financial crisis. At the same time, the domestic prices of Ukraine for the main oilseeds during March were in flat, which runs counter to global trends. This is due to the devaluation of the hryvnia, the high rate of export and processing of oilseeds. Since late March, Black Sea wheat prices have risen significantly on FOB, CPT or EXW-farm terms due to the rally observed both at Euronext and Chicago. Strengthening stock quotes, a significant increase in French wheat prices and logistical difficulties fueled the interest of some importers in the Black Sea grain. As a result, quotes recovered to a monthly maximum. And thanks to the growth of quotations for soybean meal in the USA, prices for sunflower meal in Ukraine also increased. Also, export quotes for Ukrainian corn strengthened last week after a long decline earlier.

In Ukraine, the consideration by deputies of amendments to draft law No. 2178-10 “On Amending Certain Legislative Acts of Ukraine Concerning the Turnover of Agricultural Land” is postponed due to quarantine due to coronavirus. According to experts, the volume of shadow lease of agricultural land amounts to 20-70 billion UAH with less than taxes from it up to 22 billion UAH., AgroPolit.com says.

The agricultural sector will suffer less in contrast with other sectors of the Ukrainian economy due to the spread of the coronavirus pandemic. This opinion was expressed by the economist of the investment department of The Food and Agriculture Organization, Andrei Yarmak. He argues that core values will remain unchanged – food is needed daily, unlike everything else. And the main risk to farmers is not a pandemic, but a fall in oil prices.

On March 25, the Cabinet of Ministers of Ukraine decided to introduce an emergency regime and extend quarantine throughout the country for 30 days. It is an emergency regime, not an state of emergency.

Quarantine does not have much effect on spring field work. The pace of the sowing campaign is approximately the same as last year with a slight advance, thanks to the early spring.

In Ukraine the Telegram-bot grain price analysts was launched. Zernotorg.ua, an electronic platform for grain trade, has launched its chat bot on Telegram. Now all the necessary information about grain prices can be obtained without going to the company’s website.

In 2019, the Agroliga company received € 6.75 million in net profit, which is € 995 thousand, or 17.3% more than in 2018 (€ 5.75 million). According to the report, the company’s revenue was € 50.44 million, which is 2.3 times more than in 2018 (€ 21.65 million). Gross profit in 2019 compared to 2018 increased by 75% – to € 10.61 million, operating – by 34% to € 8.02 million. The company’s EBITDA increased by 60% – to € 11.2 million (2018 – € 7.01 million). According to the results of the year, net debt increased almost 2 times – up to € 21.47 million against € 11.01 million in 2018.

With kind regards, team of GC “Agroliga”.

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