Let us sum up the results of 2020 and go through its key events in Ukraine and the world.
Undoubtedly, 2020 will be remembered by everyone, first of all, as the year of the onset of the Covid-19 pandemic and the year of incredible price bends in the agricultural sector.
Various pandemics have already happened over the past 20 years, and they all seriously affected the grain market. If you study the dynamics of wheat futures, you can see the following factors: spring 2003, the bird flu pandemic, a very serious drop in wheat prices. Then, in the summer-autumn of 2009, the outbreak of swine flu and again a very serious drop in prices. Now a new pandemic, but the response of key global markets to it is very different.
For example, corn, soybeans and barley: the pandemic is driving down world prices in these markets. Corn prices are strongly associated with the bioethanol market, which in turn correlates with oil. Oil fell, bioethanol too. Barley, a culture that lives its own life, has also fallen. Soy is a slightly different situation – the world market depends on demand from China. Therefore, at the first stage of the pandemic, soybean prices collapsed, and when China began to revive, in the second half of March, prices jumped sharply.
A very interesting situation was observed with wheat. At first, we see a decline in prices as well as for other crops. At the second stage, the same factor – coronavirus – provoked a rapid rise in wheat prices on the world market.
Over the course of the year, prices for various crops fell and then rose again. At the very beginning of November, after reaching 4-year highs, export quotations for Ukrainian corn fell following the drop in world indicators. A 5.6% decline in stock quotes in 2 days after reaching a 15-month high put pressure on prices. Cereal prices in the Black Sea region tended to stabilize, while oilseed prices continued to rise.
Regarding Ukraine, a number of important events of the outgoing 2020 can be distinguished. Ukraine has become the main supplier of vegetable oils to the European Union. This is evidenced by the data of the report of the European Commission. Also, in Ukraine, the system of registration of land plots has been simplified. In the summer, at a government meeting, a resolution was adopted that introduces the principle of extraterritoriality in the state registration of land plots. The document was developed to increase the level of accessibility, openness and transparency in the provision of state services for state registration of a land plot. And the most important event for Ukraine was the opening of the land market. A little more than half a year remains before the start of the land market in Ukraine. According to Law No. 552-IX, the moratorium will be lifted on July 1, 2021.
The Agroliga is also ready to take stock of the year. Our most significant achievement is the launch of the TPS. For the first 3 months of operation, the TPS reached the planned production indicators. Apart from minor delays, payment for the generated energy goes to our accounts in full.
The operation of our oil extraction plant at full capacity allowed us to double our revenue in 2020. We do not plan to slow down, even during a period of high raw material prices.
Since October, our share price has been steadily going up. In this connection, it was decided to move to the main market. At the moment, all preparatory work is underway to make the transition as soon as possible.
Together, these factors contributed to an increase in consolidated revenues and profitability.
Our company plans in 2021 include the purchase of land and the optimization/adaptation of the current business process.
With kind regards, team of GC “Agroliga”.