Ukraine crop can reach 2020/21 marketing year levels despite war

Ukraine's farmers are on track to harvest a corn and wheat crop that could match pre-war levels, despite the ongoing challenges facing the country following the Russian invasion on February 24, Agricensus research suggests.

Despite an official estimate that around 30% of the total planted area will be lost amid ongoing military actions or Russian occupation, planting progress suggests that at least 78% of last year’s area has been sown with corn already, and the regions currently unavailable for planting did not rank among the main regions for corn production.

Trade sources put their estimates for Ukraine's corn crop at a range from 22 million mt and up to 28 million mt, with forecasts from local analytical agencies standing now in the middle of the range - APK Inform expecting it to reach 25.2 million mt, while Ukragroconsult has put its figure at 25.7 million mt.

However, even the lowest estimate of 22 million mt also has potential to increase by a few million mt, as it is calculated based on a lower yield of 5 mt/ha - versus a more typical yield of over 7 mt/ha - amid worries over cost of inputs such as fertilizer.

“I thought that farmers would not invest much, but as I talk with people it seems they are making fertilizer. Thus, I keep an upside of several million mt in my head,” one analyst said.

Last year, Ukraine's final corn production figure was put at 42 million mt, but a year prior to that the output was at 28 million mt amid drought and hot temperatures - with the figure seemingly in reach once again despite all the challenges facing the country.

Wheat

For the wheat crop, the situation is more complex.

The winter crop takes the lion’s share of production and was planted before the invasion began on February 24.

As a reference, up to 5 million mt of wheat was harvested only from Donetsk, Luhansk and Kherson regions together last year, the regions that are the fulcrum of the Russian invasion and occupation and regions that are not expected to be available for harvest this year.

Thus, the market ideas for the wheat crop stands in the 17-20.5 million mt range, with the lowest forecast made by APK and the highest by Ukragroconsult (19.5-20.5 million mt range).

Those figures are given without factoring in the occupied territories - taking those into account and the production of wheat could also reach the 2020/21 level of 24-26 million mt.

In the 2021/22 marketing year Ukraine harvested 32 million mt and in 2020/21 it reached 25.3 million mt.

Taken together, production of grains is expected to be quite sizeable still - although significant challenges remain in terms of harvesting, storing, transporting and exporting.

At the same time, consumption is expected to drop amid big internal movement of the country's citizens while many processing plants have been forced to stop work amid the war in a dynamic that is likely to only add to the already existent huge stocks.

That also comes as exports still face huge difficulties in transiting to the deep water ports of the Black Sea, and Ukraine is not yet able to move abroad more than 1-1.2 million mt of grains per month.