Ukraine office: GrainCorp moves in


ONE of Australia’s largest grain trading bodies has registered a branch in Ukraine, aiming to participate in the growing Black Sea grains market.

GrainCorp last month registered the new firm GrainCorp Ukraine Ltd.

A GrainCorp spokesman told The Weekly Times the opening of a trading office in Ukraine was consistent with the company’s strategy of “diversifying our origination footprint”.

“Our Ukraine presence has been established on a relatively small, asset-light basis. It involves a small trading desk and personnel, but without any supply chain assets,” the spokesman said.

“The Black Sea is a very important grain region, with large and growing production, and improving yields as technology and processes evolve.

“It is important that GrainCorp becomes a participant in this region.”

GrainCorp owns the largest eastern Australian grain storage and transport network.

The June World Agricultural Supply and Demand Estimates by the US Department of Agriculture shows projected Ukrainian wheat production for 2018-19 to be 26.5 million tonnes.

Rabobank senior analyst grains and oilseeds Dr Cheryl Kalisch Gordon said GrainCorp’s newest branch was a natural step, as many other trading houses have had a presence in the Black Sea in recent years.

“Both wheat and corn account for about 30 per cent of Ukraine’s annual grain production, and there are high exportable surpluses of both,” Dr Kalisch Gordon said.

“While their 2018-19 wheat harvest volume has been forecast down almost 2 per cent year on year, due mostly to a return to trend yield and dryness in some areas, the forecast 26.5 million tonnes is still up 3.5 per cent on the five-year ­average.

“The corn harvest is forecast to be up 25 per cent year on year, and at the highest level since 2013-14. This is based on both higher yields and increased planted area to corn.”

Dr Kalisch Gordon said growth in wheat supply from Russia had been staggering in recent years due to the size of the industry, yield growth, and favourable conditions.

“Russian exports of pulses, while off a small base, have grown at 24 per cent annually over the past five years,” she said.

“It’s worth pointing out, in the context of the WASDE forecast for Russian wheat production to be almost 20 per cent down on last year’s production, that at 68.5 million tonnes the 2018-19 Russian harvest would still be almost 4 per cent above the five year average.

“Of course, if the dryness continues and their stocks are eroded more quickly than currently expected, a more bullish scenario for world wheat prices will open up.”

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