Lower prices and switching to oilseeds as a possible response to the ban on exports through Ukraine’s western borders
Grain prices will be even lower, and farmers will grow more oilseeds. These are the expected consequences of the ban on Ukrainian grain exports to Western neighboring countries.
Pavlo Martyshev, a researcher at the Center for Food and Land Use Research of the Kyiv School of Economics, told AgroPortal.ua.
“There is no possibility to reduce crops. It makes no sense to leave the land fallow, because the farmer needs at least a penny,” he commented.
According to the expert, farmers are likely to grow more oilseeds, as there is an opportunity to export their processed products across the western borders: “There will be more sunflower and soybeans and less corn.”
Currently, farmers have little revenue and little money. This situation could have been avoided with a hedging mechanism.
By purchasing futures a year ago, farmers could have even made money on rising world prices. This would have partially offset the fall in our prices. Farmers would not have traded in physical grain, they would have bought futures at a lower price and sold them at a higher price later – this is called hedging. It could have saved farmers. Now it is unclear in which direction the global market will move.
The expert adds that today it is important to communicate with neighboring countries and the European government.
“There are no secret ways to improve the situation. We need to talk about transit, do everything to make the grain deal really work,” emphasized Pavlo Martyshev.
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