Ukraine prioritizes higher-value crops for rail exports amid port shutdowns

At the start of August, rail shipments of grain to the ports of Greater Odesa virtually came to a standstill. In the first six days of the month, only 40.8 thsd tons of grain were exported by sea — 84.3 pct. less than during the same period in July. This is reported by Latifundist.com, citing analysts at Spike Brokers.

“In total, between 1 and 6 August, Ukraine exported 312.9 thousand tonnes of agricultural produce — compared with 784.5 thousand tonnes during the same period last month. In physical terms, the decline amounts to 60.1 per cent. Revenue was less affected — it fell by 38.4 per cent, from $326.9 million to $201.5 million,” the article states.

Why, then, did revenue fall less than tonnage? The reason lies in a change in the structure of exports. The share of bulk grain cargoes (wheat, maize) has decreased, whilst the share of products with a higher price per tonne — such as oil, rapeseed and processed goods — has, conversely, increased. In other words, fewer raw materials are being shipped ‘in bulk’, whilst more processed goods with higher added value are being exported.

What has happened with the main crops:

• 93.2 thsd tons of wheat were exported, compared with 294.9 thsd tonsat the start of July;
• maize — just 33.5 thsd tons, compared with 293.7 thsd tons a month earlier;
• by contrast, seasonal rapeseed exports have begun, totalling 27.9 thsd tons for the week;
• more soya meal was exported than during the same period last year: 25.7 thsd tons compared with 18.6 thsd tons;
• sunflower oil exports, however, were lower — 30.7 thsd tons compared with 52.1 thsd tons a year earlier.

When it becomes more difficult to export grain by sea, grain storage facilities and traders hold back on purchases or offer lower prices — demand from exporters is the first to weaken. If you have unsold stocks of wheat or maize, it is worth keeping a closer eye on offers over the coming weeks and not rushing to sell large consignments until rail logistics to the ports have resumed.

Tags: Ukraine, export, grain