Ukraine’s wheat, corn crops seen shrinking again as farmers struggle

PARIS — Ukraine’s corn and wheat production is set to fall for a second year in 2023, with corn output not expected to exceed 18 million tons and wheat production 16 million tons as farmers reduce planting due to the war, a grain sector group said.

The projections were a best-case scenario, and production could fall more sharply depending on weather and financial difficulties of farms, Ukraine Grain Association (UGA) head Nikolay Gorbachov told Reuters on the sidelines of Argus Media’s Paris Grain Conference.

Disruption to export trade following Russia’s invasion last year has left many farmers producing at a loss, he said. “For farmers it became unprofitable to produce the grain and that’s why they cut the planted area,” he said.

Overall, Ukraine’s grain and oilseed crop output may decline to around 50 million tons from some 67 million in 2022 and about 106 million in 2021, according to UGA estimates.

Ukraine has managed to export around 30 million tons of grains and oilseeds so far in the 2022/23 season using a Black Sea grain corridor negotiated with Russia, as well as alternative routes via European Union countries, he said.

But backlogs in the Black Sea corridor and less efficient logistics in alternative routes were creating high costs that hit farmgate prices, he said, blaming Russia for slowing vessel inspections in the corridor.

Corn has been particularly affected by financial constraints as it is relatively expensive to grow, dry and transport, he said, adding about 10% of the 2022 crop remained unharvested as farmers wait for some fields to dry out.

Ukraine’s agriculture minister said last month that 2022 corn production could fall to 22 million-23 million tons from 41.9 million in 2021. Wheat production is estimated to have fallen to about 20 million tons last year.

In oilseeds, production of rapeseed and soybeans, seen as more profitable to produce and export, could hold steady this year at around 3 million tons each, Mr. Gorbachov said.

But sunflower seed output might fall due to difficulties faced by local crushing facilities that usually process the crop to export sunflower oil, he added. — Reuters