Tendencies of Ukrainian agrarian market in February 2021.

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

Since September 2020 export prices for staple crops have risen by an average of 47%. From September 1, 2020 to February 1, 2021, the price of corn increased by 51%, wheat – by 42%, barley – by 39%. The export price of sunflower rose the most – by 93%, soybeans rose by 40%, rapeseed – by 24%. As analysts from Zernotorg.ua noted, corn and sunflower became the leaders in price growth, which clearly correlate with gross harvests both within the country and with the situation in foreign markets.

After a long and rapid rise in prices since the end of January, a downward trend has emerged on the Ukrainian wheat export market. Since the end of January, wheat began to fall in price under the pressure of the previous collapse in world quotations and a decrease in external demand against the background of uncompetitive prices. Even the Egyptian tender and the purchase of wheat, including Ukrainian, could not change the situation. Under the influence of the above factors, the supply prices for Ukrainian wheat on the FOB basis by February 9 gradually decreased from $ 292-303 to $ 280-288 per ton, pulling along with them the prices on the CPT-port site.

The forecast of ending world corn stocks in 2020/21 MY was increased by 2.7 million tons to 286.53 million tons (the previous forecast was 283.53 million tons). In general, according to the report, world production of corn is expected at the level of 1,134.05 million tons, which is slightly higher than the previous forecast of 1,133.89 million tons, exports – 185.7 million tons (+2.07 million tons). At the same time, the report predicts an increase in China’s import of corn to 24 million tons, which is 6.5 million tons (37%) more than the previous one (17.5 million tons). The final stocks of corn in the country, according to USDA estimates, are expected to be 4.5 million tons more than in January – 196.18 million tons. For Ukraine, USDA experts left all forecasts for grain unchanged: harvest – 29.5 million tons, exports – 24 million tons. tons, the remainder is 0.89 million tons.

USDA experts estimate the world production of sunflower oil in 2020/21 MY at 19.47 million tons, which is 2.03 million tons (9.4%) less than the previous season. The USDA report indicates that the global sunflower harvest is estimated at 50.14 million tons, which is 4.75 million tons less than MY 2019/20 (54.89 million tons). At the same time, the global production of sunflower meal is expected to reach 20.93 million tons against 22.24 million tons in 2019/20 MY. USDA experts have not changed their January forecast and estimate the yield of sunflower seeds in Ukraine in 2020/21 MY at 14 million tons, the production of sunflower meal and oil is also 5.69 million tons and 5.92 million tons, respectively.

All markets continued to decline in prices under the influence of the bearish USDA report, as stocks, especially in the US, exceeded traders’ expectations. “This dynamic is also viewed by many traders as a technical correction after strong growth since the beginning of the year. Fundamentals continue to point to a moderate decline in prices,” analysts said.

Export quotations for crude sunflower oil from Ukraine rose sharply, adding $ 65-70 over the past week, following the strengthening of quotations for oil and, as a result, for other vegetable oils. “The supply prices are also supported by rumors about the possibility of introducing restrictive measures on the export of sunflower oil from Russia. At the same time, external demand for sunflower oil remains rather restrained,” analysts said. In addition, the small volumes of purchases of sunflower oil carried out by India for delivery in the period March and April-June only pushed the offer prices up.

Barley prices have reached their maximum in the entire history of independent Ukraine. According to the report, under the influence of these factors, traders’ demand prices for barley reached new record levels by the end of last week – UAH 8100-8400 / t CPT-port, dollar demand prices were often announced in the range of $ 243-249 per ton CPT-port.

President of Ukraine Volodymyr Zelenskyy signed the Law “On State Support of Investment Projects with Significant Investments in Ukraine” No. 1116-IX, which the Verkhovna Rada adopted on December 17, 2020. The law provides for the provision of state support to Ukrainian and foreign investors with a total investment of € 20 million or more.

President of Ukraine Volodymyr Zelenskyy signed the Law “On Amendments to the Tax Code of Ukraine regarding the rate of value added tax on operations for the supply of certain types of agricultural products” No. 1115-IX, which the Verkhovna Rada adopted on December 17, 2020. The document provides for a reduction in the VAT rate from 20% to 14% on operations for the supply and import of certain types of agricultural products into the territory of Ukraine, in particular: cattle, pigs, whole milk, wheat and rye, barley, oats, corn, soybeans, sugar beet, flax seeds, rapeseed or rapeseed, sunflower and other oilseeds. The law comes into force on February 25, 2021, and applies to tax periods starting on March 1, 2021.

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