Despite decline, Ukraine's cereal production still above average

by World Grain Staff
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KIEV, UKRAINE — Ukraine’s harvesting of the 2015 cereal crops, with the exception of maize, is virtually completed and aggregate output is estimated at 60.2 million tonnes, 5% down from the 2014 record level but well above the five-year average, according to a Food and Agriculture Organization (FAO) of the United Nations report issued on Sept. 30.

Wheat output increased by 7% to the near-record level of 25.8 million tonnes, although grain quality is poorer compared to 2014: about 60% of the output is reportedly graded as feed due to adverse weather, mainly in western regions the FAO reported. By contrast, despite higher yields, barley production decreased by 9% to 8.2 million tonnes as a result of reduced plantings in response to high input costs. For maize, however, a reduction in area, coupled with lower yields, is expected to result in a significant 14% contraction in output to 24.5 million tonnes.

Regarding the winter cereals for harvest in 2016, planting conditions are reported to be generally satisfactory in western and northern parts the FAO reported. By contrast, dry weather persisted in eastern and southern regions, particularly Kherson, delaying planting activities.

Total cereal exports in the current 2015-16 marketing year (July/June) are forecast at 32.4 million tonnes, 5% below the previous year’s record level but 32% above the average of the past five years, supported by the sharp devaluation of the national currency during the marketing year. Wheat exports increased by 7% to 12 million tonnes, while barley and maize exports reduced by 28% to 3.2 million tonnes and by 6% to 17 million tonnes.

Domestic prices of wheat and wheat flour declined in September due to abundant supply in the market following the 2015 bumper harvest the FAO reported. However, after the sharp devaluation of the national currency in past months some strengthening in September added to the downward pressure on prices. Despite recent declines, however, prices remained well-above their year-earlier levels, after sustained increases since late 2014 due to the devaluation.

Export prices of maize and wheat also declined in September and were almost one-third below their year-earlier levels, in line with trends in the international market the FAO reported.