Ukraine cannot afford to buy up surplus grain from farmers

Government grain intervention purchases will not solve the problem of excess supply on the Ukrainian market. Buying 20 mln tons of grain at UAH 9,000/t would require UAH 180 bln, funds that the government does not have. This was stated by Agrarian Policy Minister Taras Vysotsky during a discussion with journalists in response to a question from Latifundist.com.

Intervention purchases are a mechanism under which the government buys part of the grain supply during periods of oversupply to support domestic market prices. Later, when supplies decline, the grain is released from government stocks. This mechanism can also help prevent sharp price increases in the event of a poor harvest.

According to Vysotsky, this instrument is generally used for short-term price regulation, with intervention volumes typically accounting for around 20–25% of domestic consumption.

However, Ukraine faces a different situation. According to his calculations, carryover stocks could reach 30 mln tons of grains and an additional 5 mln tons of oilseeds by July 1, 2027. Meanwhile, domestic grain consumption amounts to less than 20 mln tons.

“Therefore, this instrument would not be economically viable in this situation, given the scale of the market relative to domestic consumption,” Vysotsky explained.

He noted that purchasing substantial grain volumes would require significant budget expenditures and create additional challenges for their subsequent sale. If seaports remain closed next year, the government would once again face the need to purchase surplus grain from the new harvest.

“This would require enormous financial resources,” Vysotsky emphasized.

Instead, the government is working on alternative mechanisms to support the agricultural sector. According to Vysotsky, the relevant proposals are expected to be presented by the end of November. They will cover the next two marketing years, through July 1, 2028.

Tags: Ukraine, subsidies, grain, prices, stocks