Readers choice: TOP-10 articles of 2016 by UkrAgroConsult
1. Brexit after-effect. Investment slowdown to hit commodity markets
30.06.2016, author – Sergey Feofilov
Certainly, never too much of a good thing, but the UK got such broad autonomy and independence from the EU’s requirements in February 2016, that the referendum seemed to be superfluous. Undoubtedly, Brexit will lead to a long uncertainty period in the global economy. Shock effect of the referendum results is still unclear:
- what will be the major financial market trends?
- unclear "divorce" proceedings (under EU legislation it may take up to two years);
- disruption of economic ties between EU and the UK is unlikely, but particular bilateral trade conditions are obscure.
2. Russia forces Ukraine out of Turkish sunflower oil market
19.09.2016, author – Svetlana Kupreeva
As UkrAgroConsult previously reported, in September 2016 Turkey has decided to raise duties on safflower and sunflower oil imports. Import duty on safflower was risen from 4% to 23.4%, while the duty on raw sunflower oil imports increased from 12% to 36%, on processed - from 50% to 67.5% per 1 MT. Such measures are taken in order to protect local oilseeds producers and crushers.
The reason for these changes is understandable and justified, if taking into account forecasts of record sunflower production in the Black Sea region, including Russia and Ukraine that are the major sunflower oil suppliers to Turkey. Combined share of these countries in Turkey's imports exceeds 90%. It should be noted that over the past five years participation of Russia and Ukraine in Turkish imports changed diametrically.
3. Russia loses ground in Saudi Arabia
19.09.2016, author – Marina Sych
Barley harvesting in Russia entered the final straight. More than 18.2 MMT of barley were collected from about 93% of acreage, which already exceeds last year’s harvest. According to UkrAgroConsult, this year Russia will obtain 9% more barley than a year before (about 18.7-19 MMT).
Undoubtedly, export potential will also grow in the 2016/17 season. UkrAgroConsult believes that it may surpass last season’s rate by 20% and exceed 5 MMT. However, there are some important "but" in its implementation.
4. Ukraine will not be able to sow winter grains in the optimal terms
26.09.2016, author - Elizabeth Malyshko
Precipitations have been observed in the Southern and Eastern parts of Ukraine since September, 20. Abundant rains were seen in Odessa region and in the westrn regions. According to meteorologists it will be raining this week as well and precipitations will replenish soil moisture stocks in the key winter wheat producing regions.
Dry weather conditions in August and September – key risk factor for the successful sowing and good start for plants development. The expectations of rain cause farmers to increase winter crop sowing pace, even in the case of rapeseed. Despite the fact that sowing pace is behind 5-years average, it is still ahead of the last year.
5. Ukrainian traders export grain at loss?
05.09.2017, author - Elizabeth Malyshko
Prices do not gladden traders in the new season. World grain production continues to set new records, and pressures prices. CBOT wheat futures fell to a ten-year low affecting the Black Sea export prices. Compared with early September 2015, grain prices lost no less than USD 10/MT.
6. Ukrainian sunflower seed market: 2015/16 season results
17.10.2016, author – Svetlana Kupreeva
The 2015/16 marketing year was quite successful for Ukraine in markets of sunflower seed and its processed products. All-time high sunseed production at 11760 KMT was the key to such a success. Favorable agro-meteorological conditions allowed to obtain the best result on close to record planted area (5650 Th ha), owing to minimal losses (50 Th ha) and high productivity (2.1 MT/ha).
The bulk of sunflower seed harvest becomes raw materials for crushing enterprises, which total crushing capacity has already reached 16.5 MMT in Ukraine. Last season fat and oil industry processed 11.8 MMT of sunflower seed and produced 4.9 MMT of sunflower oil, which was 14% more than during the previous marketing year.
7. Ukraine. Sunflower oil is underestimated on the world market
12.09.2016, author – Yulia Garkavenko
(Based on the materials of International conference “Black Sea Oil Trade - 2016”)
In the new 2016/17 MY due to the unparalleled sunflower crop -14 MMT (UkrAgroConsult`s forecast), Ukraine will be able to reach the record volume of sunflower oil production and exports – 5.65 MMT and 5.17 MMT respectively.
According to our previous forecasts (at the conference Black Sea Grain – 2016, April) due to the new records the spread between sunflower oil and soybean oil as well as between sunflower oil and palm oil can reach the negative values. This means that sunflower oil will be cheaper as it was observed in 2011/12 and 2013/14 MY.
8. Russia. Wheat production is likely to surpass all expectations
22.08.2016, author – Marina Sych
The beginning of 2016/17 season was characterized by constantly raised grain production estimates. Revision of harvesting area expectations and record high grain yields were the main drivers of crop estimates increase.
Favorable weather conditions in winter along with sufficient amount of heat and moisture in spring and summer ensured high wheat productivity this year (in particular – winter wheat) in most regions. Concerns that excessive rainfalls in spring and summer could trigger yields decline, did not prove true.
9. Black Sea region – world largest wheat supplier
31.10.2016, author – Marina Sych
In the current season the Black Sea region has become the key player in the world wheat market by achieving record high productivity during the 2016 harvesting campaign.
No doubt, in the 2016/17 marketing year the region will confirm the leadership as world largest wheat supplier. But will the key countries of the region sell as much grain, and particularly wheat, as expected by the market?
10. Ukraine squeezing out competitors in the Asian wheat market
26.12.2016, author – Olena Hesova
According to USDA estimates, global wheat exports will increase 4.34 MMT in 2016/17 season, to a volume of 176.83 MMT. Taking into account that the current pace of world wheat exports is indeed faster than last year and wheat price is at a multi-year low, this forecast is quite realistic.
The IGC reports that overall exports from major wheat supplier countries totaled 54.33 MMT in the first four months of 2016/17 season (July-October) that is up 4.45 MMT from last season. At the same time, the key sellers continue competing in outlet markets of Asia, Africa and the Near East.
- Romania. Farmers began sowing early cold-resistant crops
- Cocoa better bet than coffee, sugar, says Commerzbank
- Ukraine. January production of soybean oil reached record in the current season
- The Russian region of Samara imports directly from Ivory Coast
- Belarus. Vegoil output shrank to 5.7 KMT in January