Ukraine grain harvest set to fall further

Published : 27 Jan 2023 07:20 PM

Ukraine's harvest of grains and oilseeds will see further declines this year as Russia's invasion drags on, an industry official warned Thursday, putting further pressure on global prices for essential foodstuffs.

Planting acreage will again shrink and the total harvest is forecast at 53 million tonnes for 2023 after 65 million tonnes last year, said Nikolay Gorbachov, president of the Ukrainian Grain Association.

Ukraine's farmers had produced a record 106 million tonnes in 2021, making it the world's fourth-largest exporter of corn and on track to be the third-largest exporter of wheat before Moscow launched its invasion one year ago. "We are at war. We are still producing grain but the harvest will be down," Gorbachov told a Paris conference organised by Argus Media.

The fighting has resulted in fuel shortages and the destruction of agriculture equipment and storage facilities, and a one-fourth reduction in planting acreage, according to the UGA.

Russian forces had also blocked grain exports from Ukraine's Black Sea ports, sparking a surge in prices that has especially hurt developing countries. "For farmers it became unprofitable to produce the grain and that's why they cut the planted area," Gorbachov said.

A deal reached last July to open a Black Sea export corridor for grain shipments has allowed 20 million tonnes of grain to leave Ukraine, but Gorbachov accused Russian inspectors of obstruction. "They are checking even ballast water," he said.

He also warned that export levels were unlikely to reach levels that could ease global market prices.

"For the national food security, that will be fine. But for exports? What if Ukraine cannot export those 40 or 50 millions? Prices will rise," he said.

"Europe can afford it, but not developing countries."