Traditionally, representing to your attention a brief overview of the world and Ukrainian agrarian sector news.
According to the results of 2019, the level of profitability of sunflower seed production in all enterprises was 23.5% and became the highest among all types of agricultural products. This level at the same time became the lowest since 2008, when the profitability of sunflower seed production was 18.4%, and is inferior to the 2018 indicator of 32.5%. The profitability of sunflower seed production reached the highest level in 2015 (80.5%) and in 2016 (63%).
Vegetable oil prices in June rose by 11%. Analysts noted that the sharp increase in international prices for palm oil recorded in June is associated both with the intensification of international import demand amid the weakening of restrictions related to the COVID-19 pandemic in many countries, and with concerns about a possible decrease in production volumes due to the continuing shortage of migrants. Increased international demand also had a positive impact on the quotes of other vegetable oils, but in the case of soybean and sunflower oils, the main reason for the price increase was the decline in export stocks in the leading exporting countries. As for rapeseed oil, according to experts, the rise in prices for it was facilitated by the revival of demand from producers of biodiesel in the EU.
Ukrainian corn prices of the new crop rose after the USDA report. Export prices for Ukrainian corn of the new crop strengthened after the release of the USDA report on crops and grain reserves. Stronger prices boosted trade in new crop corn. According to the report, trade in corn of the new crop in Ukraine has revived due to concerns of market operators about a possible decrease in prices in the future under the influence of the expected large harvest in the world in 2020/21 MY. According to USDA forecasts, the world corn harvest in the new season may reach a new record of 1.188 billion tons. According to analysts, the corn harvest in Ukraine in 2020 is formed on a record area of 5.4 million hectares. As analysts note, back in June there were certain doubts about the preservation of high indicators of grain yield. But weather conditions made it possible to make positive changes, and this figure is estimated at 7 t/ha. As a result, the gross harvest of corn may reach another record and amount to 36.6 million tons.
During July, wheat was in a bullish trend on the leading stock exchanges despite an active harvesting campaign in the Northern Hemisphere. Analysts argue this by the high harvest rates in the United States and France, the bullish USDA wheat report in July, uncertainty in the estimates of wheat production in Russia, the activity of importers from North Africa, in particular Egypt, and a local shortage of supply in the Black Sea region due to low harvest rates harvest compared with last year and lower yields in the southern regions of Ukraine and Russia. By the end of the month, quotations for wheat in the Black Sea region corrected downward after strong growth. At the same time, the price of Russian wheat continued to remain at a fairly high level until the Egyptian tender, at which cheaper Ukrainian wheat was purchased. Russian prices are supported by lower yields in the south compared to last year and the reluctance of farmers to sell wheat. After the tender, which showed the low competitiveness of Russian wheat, prices for it dropped. In turn, the price of Ukrainian wheat corrected downward even more strongly. The promotion of the harvesting company inland, a more significant supply of grain volumes and a decrease in quotations on the Chicago Stock Exchange contributed to a decrease in the price of Ukrainian wheat.
In January-June 2020, 3.17 million tons of unrefined sunflower oil was produced in Ukraine. This is evidenced by the data of the State Statistics Service. The production of sunflower oil is 8.3% higher than the result of the same period in 2019.
With kind regards, team of GC “Agroliga”.