Sharply increased price of grain and natural gas becomes a driver for growth in production costs in 2022

Author:  Maryna Marynych

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This season’s record grain crop in Ukraine entailed a whole series of other good and not very good records. In the first quarter of the season, farmers much more willingly parted with barley and wheat because they expected a bumper corn crop and had to empty their granaries for it. In this connection, exports of early grains in MY 2021/22 reached a record high.

At the same time, amid strong demand, Ukrzaliznytsya (Ukrainian Railways Company) has raised the cost of leasing grain carriers to the highest in few years. And because of sharply increased prices of natural gas, fertilizer prices in Ukraine rose as well:

Growth in production costs will negatively affect next year’s margin of growers. The planting conditions this fall were somewhat worse than usual. There is a probability that part of the plantings will enter the winter in weakened condition. Therefore, spring fertilization will be particularly important. Rising fertilizer prices may cause part of farmers to violate the requirements for proper crop growing, UkrAgroConsult reports.

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