Farmers’ decisions will be influenced by profitability, which will depend on war risks, the speed of demining fields and weather conditions. The situation with crops in the western and central regions will be more stable, which will allow farmers to have higher profits. Such a situation is a sign of the fragmentation of the domestic market in Ukraine.
Ukrainian farmers will make a decision on the next sowing in the spring – Sergey Feofilov
Usually, farmers plan sowing areas and spring field work already in the fall, but this year the decision will have to be made right before sowing, which is associated with a high level of uncertainty among farmers.
This opinion was expressed by the general director of UkrAgroConsult, Sergey Feofilov, during the IGC webinar “Facilitating the reintegration of the Black Sea region into the global grains market”.
Sergey Feofilov, General Director of UkrAgroConsult
According to the expert, Ukrainian farmers will give preference to sowing crops that are cheaper to produce, but more profitable – oilseeds, pulses and buckwheat.
Sergey Feofilov notes that farmers sell oilseeds immediately after harvesting in order to have funds to buy everything necessary for the next sowing operations.
“But due to the sharp decline in grain prices in the domestic market, farmers’ profits have decreased significantly. Previously, farmers could cover their costs by selling grain on the domestic market, but after the disruption of logistics chains, this became impossible. It should be taken into account that 80% of production costs are financed by farmers independently from their profits,” says Sergey Feofilov.
According to the calculations of the UkrAgroConsult company, the agricultural sector has some state support, but agricultural producers actually need 4-5 times more funds than those provided by banks and the government.
In general, forecasts for grain production in Ukraine in 2023 will largely depend on price behavior. One of the pricing factors in the domestic market is unprecedentedly high grain stocks. The impact of the fact that the Ukrainian market is completely cut off from global price trends is also felt.
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